5 ways to save Payroll Costs

Don’t do it –  

For anyone needing help and advice on any aspect of performance on a PeopleSoft Oracle Database, I highly recommend David Kurtz.  One of the principles Dave espouses is (I forget who the source is now) that the single best way to reduce complexity and improve performance is not to do something.   

In other words, rather than spend stacks of time and cash creating some hideously complex edifice to carry out calculations in support of a highly complicated payment or deduction – always consider not doing it at all by changing the business process. 

Complex payments/deductions 

The suppliers of many systems trumpet (with justification) that they can address the most labyrinthine of calculations.   

This reminds me of being a young man and marvelling how many car insurance companies advertised they were keen to take on young drivers, even with fast cars.  I thought this was wonderful because everyone had been telling me it would be hard to get insurance.  What I had missed was that the reason all these outfits were so eager was the huge amounts they wanted to charge me. 

Even if you think you can configure the system pretty easily – don’t underestimate the amount of administration that you might need around complex payments and deductions – this may involve the Employee, Manager and HR and Payroll – all of it is non-productive admin. 

Don’t report/interface for others 

Don’t do stuff for other parts of the business at your time/expense 

I’ve lost count of the amount of times Payroll departments have had their implementation project hijacked (usually by finance).  Sometimes another business area sees a payroll project as a good way to get some of the things they’d like but don’t have the budget for. 

Up to a point of course, Payroll has a responsibility to support the rest of the business, but when this begins to extend beyond what’s reasonably expected in order to pay people, questions need to be asked about who is paying and who has a business case. 

  

Don’t automate 

The temptation is to try and automate laborious processes - but wait! If the code/config is costly and the justification dubious, you are just creating something else you need to document and maintain that is costing you, not saving you, even if the Payroll folks are happy because they've dodged some boring work.

Don’t offer 

Don’t offer to split net pay between multiple accounts for payees if you don't have to - again it's an overhead in admin you don't need.  Many people have online banking these days so they can manage their complex affairs on their own time.

  

Write it down 

Document payment rules so you can be consistent and avoid costly litigation.