The rise of payroll professionals?

As HR recruiters, we’ve recently seen a huge spike in demand for Payroll Talent. Over the years we’ve seen the landscape for payroll professionals change considerably – from companies traditionally having their own dedicated payroll professional, to many moving to an outsourced function. Now it seems we are seeing many businesses reverting to their own dedicated resource. Ant Coen, Principal Consultant in our London office investigates the changes and speaks to Wendy Drinkwater, a freelance payroll professional, and the former Head of People Payments (Talent and Payroll) at ITV to get her views.

Why is HR regarded more highly?

When polled, 67% of respondents felt that HR is valued in higher regard than payroll in a business, with only 1 in 4 feeling this wasn’t the case. Earning money to make a living is the primary reason and motivation why employees do their jobs. It’s therefore easy to imagine what would happen to a company that failed to deliver payroll accurately and on time. Yet, despite its importance, Payroll has always been seen as a poor relative of the HR function, and it still seems to be the case today.

“The results are spot on as traditionally HR has always worn that crown,” says Wendy. “As a Head of Payroll, I have reported into both HR and Finance teams and it’s fair to say Payroll is not at the Hollywood end of the show. We know we’re not considered sexy or exciting compared to other departments but as a business-critical function you will find us getting our hands dirty at the coal face. Being the poor relation, we end up sitting in either HR or Finance or the isolated orphan somewhere in between the two. This I believe is where the notion that organisations have a higher value for HR stems because nobody wanted to take responsibility for us. Even when sited in either, we were not really classed as one of their own so there was no one to champion us.”

Over the last few weeks, we have noticed a common theme where new Payroll Manager roles are consistently paying significantly less than HR Manager or HRBP roles. Personally, I haven’t seen much of a difference in salary for a number of payroll positions over the last 5 years.

So why is Payroll talent in such high demand?

66% of professionals surveyed feel this trend is due to the HR & Payroll functions becoming more aligned. Over two-thirds agreed that both from a time and cost perspective, it is more beneficial to have an in-house payroll team. We are seeing a number of businesses taking payroll back in-house from an outsourced provider.

The information payroll holds about its employees and associated costs is important to any business; however, it is usually ignored in favour of HR data. The latter, unless part of an integrated payroll and HR system, is usually the area most out of date. The data for strategic decision-making should come from your payroll professionals; they can provide data on salaries, cost centres, employer pension and National Insurance, etc

More importantly, payroll has moved on from just being about ‘wages’ and the remit is expanding to something more aligned to ‘remuneration’, taking into account benefits, people analytics and the wider employee experience. As businesses aim to become more employee-centric and more profitable after a period of rapid change and transformation throughout the pandemic, payroll skills have been forced to adapt and progress in response. Today’s payroll job descriptions have become more strategic and analytical, and less process driven.

In addition, as organisations strive to achieve improvements in payroll efficiency, global compliance, systems, employee wellness, and data analytics, companies are demanding more from their payroll operations.

Recruiting and retaining good payroll professionals

From a salary perspective, roles within payroll always seem difficult to recruit as everybody tends to know everybody else’s salary. Therefore, businesses need to go external to recruit and end up paying below market rate to stay in line with current team members – a tough job for anyone. Bringing in a team member on a higher salary will create internal issues; any Head of Payroll must be constantly benchmarking in order to retain their team, as if they don’t then they run the risk of losing colleagues to someone who is.

As a specialist HR agency, Macmillan Davies can work with you to bring in specialist payroll talent, who can not only get the fundamentals right but also access someone who can really add commercial value to your business.

Payroll appreciation

Payroll is still very much an unsung profession – we should, but we don’t sit there and praise payroll for getting our salary correct, however, we do let them know how unhappy we are when there is an error, and this is something Wendy has seen first hand: “In my 41 years in payroll, I’ve rarely heard ‘thank you for paying me’ from the 98% who are paid correctly but a certain pandemic brought on a bullrush. There’s not a lot of good came out of that dreadful period however it played a huge part in our recent rise to fame. Our sterling efforts didn’t go unnoticed, and it quite rightly raised our profile in a positive light. Our value is now better recognised but we deserved it long before March 2020.”

Whilst it is still difficult to compare payroll to HR because HR focuses a lot on culture and engagement and payroll is more black and white – but let’s take a moment to appreciate payroll professionals, as we all know what not being paid correctly would do for culture and engagement in a business!

Upcoming events

We have a series of roundtables and webinars coming up on hot HR topics, give us a follow-on LinkedIn or contact Ant Coen to be kept updated on the dates for our next event.

Get in touch

Should you wish to have a confidential chat with Ant Coen to discuss the current HR market and where we can help with inclusive recruitment or your search for work/recruiting into your team, please contact him directly at acoen@mdhr.co.uk

To ensure you don’t miss any updates from Macmillan Davies and to hear about our latest events click here to sign up to subscribe to our updates.