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Seven Ways COVID-19 Will Impact Payroll

One of the most important functions of any business is payroll. Employees need the assurance that they will be paid on a consistent basis without having to worry about delays. Timely payroll impacts every aspect of a business, from employees’ morale to the financial stability of the organisation.In unprecedented times such as the COVID-19 pandemic, payroll operations become even more critical. While other business functions may have stopped momentarily, it is clear that payroll continues to be the essential business function that keeps employees and the organisation going. If payroll operations stop, the ripple effect is clear – employees are not motivated, the organisation’s financial stability is compromised, key talents leave and productivity levels drop.

In extraordinary times, be it a pandemic, terrorist attack or natural disaster, business leaders find themselves testing the resilience of their business continuity plans. Payroll is no different. There are many ways in which an unforeseen situation, such as a COVID-19 outbreak, can impact whether employees get paid on time, correctly, or even at all. As business leaders navigate the uncertainty and aftereffects arising from the COVID-19 pandemic, there are a number of payroll issues that business leaders need to overcome and plan for in the near future.

Who forms the payroll organisation? 

The first key consideration is to identify the core payroll team. Who is responsible for managing and executing payroll processes? How should responsibilities be delegated within the team? For some organisations the payroll organisation is made up of internal employees. Other organisations may rely on third-party payroll providers. Be it internal or external payroll organisation, the key imperative is to ensure that the team is familiar with the payroll business continuity plans.

Are there available staff? 

The COVID-19 pandemic resulted in lockdowns across most countries and mandated quarantine for those infected with the coronavirus or identified as close contacts. This would have likely impacted staff’s availability to be physically present to execute payroll tasks. Business leaders need to be able to plan for such scenarios and ensure that there are available employees to take on additional tasks during the interim period. This means upskilling and retraining employees as part of the business contingency plan.

Work from home arrangements 

As countries gradually move into the endemic phase, hybrid work arrangements are likely to stay. This means relooking at payroll operational workflows to ensure that payroll operations can continue to run smoothly regardless of whether employees are physically present in the office or not. The biggest consideration that business leaders need to be mindful about is data confidentiality. Setting up robust data privacy controls as well as  ensuring that employees are well-equipped to manage payroll operations remotely is critical to ensuring the continuity of payroll in unprecedented times.

IT and payroll infrastructure 

The pandemic has no doubt tested the resilience of organisations’ IT infrastructure. As businesses moved to work-from-home arrangements, this meant that IT applications and software had to be reconfigured to adapt to external vulnerabilities. Can payroll data be securely accessed outside of the organisation without any potential risks or data breaches? Would there be any delays to the payroll schedule while key IT and payroll infrastructure are being set up? Ensuring that there are robust data protocols in place while ensuring an adaptable and agile IT and payroll infrastructure can help organisations adapt quickly and seamlessly in the event of an outbreak.

Are there physical processes? 

Unforeseen situations can also hamper payroll workflows particularly if there are physical payroll processes. To account for this, business leaders should review their payroll workflows periodically to identify opportunities for digitisation or automation. What type of physical processes exist in the current payroll value chain? Are there any aspects that can be digitised such as implementing digital signatures or switching from physical employee p-files to digital employee records? Digitisation of these administrative or physical processes can help to maintain the continuity of payroll operations in the event of unprecedented situations. 

Access to payroll data 

Managing payroll access is of utmost importance in any situation. Who should have access to payroll data? What level of access should each member of the payroll organisation have? How should the accesses be managed? It is imperative to ensure that payroll accesses are well-managed to minimise fraudulent activities or data breaches. Ideally, only one or a small number of payroll employees, typically the payroll manager, should have full access to payroll data. Each payroll member should only have partial access to specific types of payroll data depending on their scope of responsibilities.

How should salaries be disbursed?

The next big question in the event of another COVID-19 outbreak is salary disbursement. As payroll moves to one that is a mix of remote and physical operations, are there additional layers of controls before salaries can be disbursed to employees? Payroll teams need to factor any potential delays or additional processing time in their payroll schedules. After all, in uncertain times, timely and accurate salary disbursement can be a huge boost to employees’ morale.

Business continuity plans for the payroll function is a business imperative, particularly during pandemics such as the COVID-19 outbreak. These highlighted areas are only the tip of the iceberg. Business leaders and the payroll team need to reassess their payroll systems, workflows and policies on a periodic basis to ensure relevancy. At the same time, there needs to be standard operating procedures in place to account for various situations. Deep diving into specific payroll  issues within the organisation and developing solutions targeted at identified pain points can help the organisation to function effectively and emerge resilient through the COVID-19 pandemic.


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