Payroll migration can be an exciting time for HR as well as business leaders. Whether it is due to a system upgrade to an external payroll provider, data server consolidation or HR process integration, migration of payroll to a newer and advanced technology platform certainly helps to drive payroll processing efficiency.
However, payroll migration is easier said than done. It is a complex and time-consuming process. A single-country payroll migration can take up a lot of time and requires a lot of involvement from multiple teams. For global-country payroll migrations, the complexity increases even further. It then becomes crucial to have a robust payroll migration plan in place as this will decide whether you make or break the payroll migration to a new payroll platform.
Here is a step-by-step guide to ensure implementation success of your payroll migration.
1. Have a proactive plan
As Benjamin Franklin famously said, “If you fail to plan, you are planning to fail”. In order for your payroll migration to be successful, you will need to start planning early. Identify who should be involved in this payroll migration exercise and inform them early. Communicate to each staff on their role in the payroll migration exercise and help them to understand the schedule and key milestones.
2. Verify and update employee data
Before starting on the payroll migration process, you will first need to ensure that payroll data is accounted for and up-to-date. This includes verifying employees’ details and ensuring that payroll and employee data is comprehensive and consistent. The last thing that you want is for incorrect employee data, resulting in inaccurate payroll calculations on your new payroll platform.
If your existing payroll software has a bulk data upload function, you can utilise the function to update your employee and payroll data prior to the data extraction. Alternatively, you may export your payroll data into an excel template for manual update. However, the latter is typically not recommended as it tends to incur a higher chance of data entry errors.
3. Cleanse outdated data
Changing of payroll systems is also the ideal time to review the information held. If you have been using your existing payroll software for over 20 years, you may be holding two decades worth of payroll data. However, do you really need all that information? This is when you have to decide which information you need moving forward.
In Singapore, employers will need to retain employees’ payroll records for a certain period of time in accordance with the Employment Act. For existing employees, employment records of the last two years must be kept, while for ex-employees, employment records of their most recent two years must be kept for up to a year.
Once you have decided which payroll information is vital, ensure that you backup your data before running the data-cleanse. If your HR and payroll systems are stand-alone, it is imperative to ensure that they are in sync for the data-cleanse in order for it to be successful.
4. Lift and shift data
The biggest part of any data migration process is the actual lifting and shifting of the data from the legacy platform to the new payroll software. Once you have validated your data and cleansed inaccurate and outdated information, it is time to transfer your data over to the new payroll software. Majority of the time, your payroll software vendor will assist with this process. The data is typically stored on a cloud-based platform so as to minimise server storage space. It also facilitates easy retrieval of information and enhanced data security.
5. Test your new system
Before your new payroll software goes live, you will need to run a series of tests to verify the accuracy of payroll calculations and re-validate the data. These tests should compare the data within the new payroll system against your legacy system, such as payroll history, employee data or even timesheet checking. Testing helps to uncover any potential software errors before you go live, and it also gives you the opportunity to verify that your data is clean and accurate.
Typically, the payroll team will be required to validate the accuracy of the payroll data while the payroll software vendor will be responsible for beta-testing the new platform. As part of the payroll migration exercise, you may also need to identify some employees to participate in the testing exercise and to provide feedback on any potential improvements. Once your entire payroll software is tested and approved by your key stakeholders, then your payroll software is ready to go live.
6. Conduct training sessions
Once your new payroll software is live and open for employees to use, the next course of action is to hold training sessions so that employees can orientate themselves on the new payroll software. This could include re-training your payroll staff on how to navigate the new payroll software more efficiently and ensuring accurate calculation of payroll moving forward.
Similarly, if your new payroll software is integrated with other HR functions such as employee self-service portal, you will also need to train employees on how to access the portal and retrieve key payroll information such as their online payslips or tax forms. Conducting live training sessions is also a great opportunity for your employees to ask queries and for you to gather feedback on the software functionalities.
The key objectives of a successful payroll data migration is accurate and complete data. It is crucial to verify that all payroll calculations during your testing and go-live are accurate. At the same time, you will need to aim for your payroll to be reconciled on the new payroll software and remove any outdated and inaccurate data. With a robust payroll migration plan, proper communication, and pre-live testing, this will help you to achieve a successful payroll migration exercise.