30% of organisations are struggling with a loss of payroll capacity due to COVID-19 pressure

Almost a third (30%) of organisations have lost payroll capacity due to pressure caused by the COVID-19 (coronavirus) outbreak, according to a new survey of decision makers conducted by Zellis.

Citing limited team sizes and remote working challenges, nearly half (44%) said they are not confident about their organisation’s ability to run its payroll function if staff members are directly affected by COVID-19.  The vast majority (85%) said their organisation employs fewer than ten payroll staff members, while 15% said these employees do not have access to the infrastructure and resources needed to work at full capacity from home.

Managing short-term change was also highlighted as a major challenge, as 40% said that they are concerned about the complexity of adopting emergency government measures such as the UK’s Coronavirus Job Retention Scheme (or Ireland’s Temporary Wage Subsidy Scheme) and changes to sick pay.

When asked how their organisation is responding to COVID-19 pressure, nearly two-thirds (64%) said they have either changed their payroll performance targets or deprioritised other work in order to focus on key tasks. Additionally, 15% said that they are running last month’s payroll as a contingency measure. However, this could cause issues as payroll values change over time, especially as a result of the need to process sick pay and reduced pay for furloughed workers.

A third (32%) agreed that the COVID-19 outbreak will have some form of long-term impact on how their organisation runs its payroll and HR operations.  Nearly four in ten (39%) said their organisation will develop stronger business continuity plans to prepare for any future incidents, while a quarter (27%) will focus on accelerating the adoption of automation to reduce its dependency on manual work.

John Petter, CEO, Zellis, commented:

“In these unprecedented times of major workforce disruption, it’s clear just how integral the payroll function is within any organisation. It plays an essential role in supporting the wellbeing of staff members, especially those who are ill, looking after loved ones, or furloughed. In managing complex and time-sensitive changes under significant pressure – sometimes without all of the right resources to hand – payroll teams could be considered unsung heroes during this extremely difficult period.

“The designation of payroll staff as key workers will have helped to ease the pressure to some extent, but it isn’t a substitute for proper business continuity plans. At Zellis, we have already experienced a lot of demand for additional payroll support, especially regarding the government’s furlough scheme, and are doing everything we can to help.”

Commenting on behalf of The Chartered Institute of Payroll Professionals (CIPP), Vickie Graham, Business Development Director, said:

“It’s positive to see that 32% of respondents believe the coronavirus outbreak will have some form of long-term impact on their payroll and HR operations.  It’s likely that this impact will include more flexible working arrangements, moving payroll to the cloud, and enabling a greater work-life balance.  The CIPP would also like to see an increase in succession planning and business continuity plans for payroll, so that those working within payroll departments are not as impacted should something like this happen again in the future.

“I think that we can all agree that payroll professionals have become unsung heroes of the hour, working tirelessly and relentlessly to keep the UK paid. The CIPP will be lobbying government to recognise this work and the profession during, and as we move out of this pandemic, to ensure that payroll professionals are given the recognition that they deserve.”