The most important part of Human Resources isn’t talent management or talent acquisition. It doesn’t matter if you hire for culture or competency. And nobody cares about your learning management systems or your diversity and inclusion programs.
The most important part of Human Resources is your payroll department.
A very bold statement, that goes directly to the heart of a problem at many HR departments of the organisations. So concentrated in developing their latest Talent Management programme, they have forgotten the basics of personnel management, the administrative stuff that actually makes your employee work for your company. Being able to pay your employee on time, without errors, and with the right amounts is not rocket science (despite the efforts that basically any country around the world does in making its payroll regulations as complex as possible). But it involves a lot of technical knowledge, not just limited to a calculation spreadsheet, or to a payroll software, but also linked to key elements such as national contracts, benefits, social security, employee relations, labor law etc.
Interestingly enough, despite the attention that still many companies do at the “financials” around payroll (with endless budgeting around detailed payroll data), the focus is really on the more “noble” side of HR. Which meant that in many countries the professionalism itself around Payroll is getting poorer. If you are lucky enough, you organisation may have a payroll manager coming from a generation where Payroll was still important. But how good is your organisation in transferring those skills to the next generation? Plus, how many people around re really keen in doing their career in payroll?
We have been so shortsighted in making sure that administrative activities related to personnel were labelled as antique, useless, time consuming, inefficient… that todays is completely non attractive for a young person entering the world of HR. Not even the recent fashion around “vintage” can really help us. The only solution seems to outsource this completely towards the outside… but the issue is that service firms in this areas are also being challenged by the same difficulties. And they may not really have the interest (or the tools) to make sure you never get issues from your payroll processes.
I believe it is really critical for organisations to focus on what is really needed here: sound competencies and simplified processes to manage payroll. No company can afford errors in this area. After all, you can invest all what you want in your talent management programmes, but if people don’t get their correct pay-slip on time, you’ll get trouble!