The argument about whether payroll should sit with HR or Finance seems to be as old as the hills but a recent press release and blog response made me think.

NorthgateArinso recently signed a deal with Pizza Hut (in the UK) to provide a hosted payroll solution for its 13,000 weekly paid employees and 2,000 monthly paid employees on a monthly one.  The service includes online payslips and employee and manager self service and was heralded in a press release, announcing the deal, as being a service which will “ease pressure on HR”.

The press release elicited the following reaction from one blogger;
“… is Payroll really a HR issue? I would imagine that it is nothing other than a distraction from the core HR Function. Surely Payroll is an Accounting Function …

After all Wages/Salaries are simply a payment for the supply of services to the company. Wouldn’t HR be better off focusing on Employee Development rather than dealing with errors in the payroll.”

The blogger seems to be suggesting that payroll is just a mechanistic process which ensures that employees get paid for the work they have done.  Is it?  If it were as simple as suggested then NorthgateArinso would save a fortune in staff costs – we employ payroll professionals but how much easier and cheaper would it be to employ “clerks”?

At the risk of upsetting payroll professionals everywhere I would venture to suggest that payroll IS a mechanistic process BUT it is a mechanistic process which requires highly trained staff capable of analysing and understanding the complexities involved in getting the data in to the mechanistic process in the first place.  To view payroll as just being “simply a payment” is somewhat naïve and would suggest that the blogger has never tried to process a payroll.

As a non-payroller myself, but involved in the management of the NorthgateArinso outsource services I appreciate the complexities that governments (whichever colour) have added to the payroll function.  So “just paying” someone requires an understanding of pensions, maternity pay, paternity pay, sick pay and much much more. 

Also bring flexible benefits and salary sacrifice in to the mix and this makes payroll look more and more like a subset of HR rather than Finance.  When a payroller has to seek advice about maternity pay, for example, it strikes me that in that position I would be happier getting advice from an HR professional rather than an Accountant!  

So, should payroll sit within the Finance or HR community?  Does it really matter so long as the job gets down well and everyone gets paid accurately and on time?  From an employers point of view I suspect that it doesn’t really matter but from an employees point of view I believe that it does for the following reason.  Generally the HR department looks after all aspects of people strategies and policies including recruitment; on-boarding; training; development; reward; exit.  Why would one not include payment in that list?