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Payroll vs HR: How to Work Better Together

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HR Insights for ProfessionalsThe latest thought leadership for HR pros

Wednesday, April 22, 2020

Both payroll and HR departments need to work closely together to deliver the best results for the businesses, so what measures can you put in place to improve collaboration between these teams?

Article 4 Minutes

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Payroll and HR are two very closely linked business departments, but it's not uncommon for members of these teams to have little contact with one another and to work in very different ways.

In some businesses, payroll is seen as a purely financial function that's all about deadlines, compliance, and accuracy, while HR is thought to be more concerned with applying soft skills in dealing with people.

While these perceptions aren't necessarily inaccurate, they could contribute to the idea that these departments are entirely distinct from one another, which might generate problems for the business.

Divisions between HR and payroll could result in communication breakdowns and insufficient sharing of information, which could lead to staff paychecks and remuneration mistakes. The resulting impact on the employee experience could be difficult to recover from.

Bringing these departments closer together could also lead to wider cost and efficiency benefits across the business.

So, considering the advantages of collaboration and the risks of division, what actions can you take to break down barriers and get payroll and HR working better together?

1. Outline the problem

It's possible that members of your payroll and HR teams are going about their day-to-day work quite happily, without giving much heed to the problems that could arise from the gaps between their respective departments.

Payroll and HR staff who are accustomed to operating in a certain way might not be aware that silo-based working can have a number of negative effects.

It's important, therefore, for department heads to explain why these two functions should be collaborating more closely and what team members have to gain from this.

Offering practical, relatable examples of how reducing the divisions between payroll and HR will help team members do their jobs and reach higher standards will make it much easier to get people onboard.

2. Clearly define roles and responsibilities

There are some clear distinctions between the HR and payroll departments, but there are also areas where their functions overlap, such as the approval and enactment of salary increases.

Therefore, it's important to be clear about which responsibilities are allocated to which team. This helps to avoid the confusion and wasted resources that can result from people dedicating their time to overlapping jobs.

Poor delegation of responsibilities can also have an even more problematic end result: critical tasks not getting done because it's unclear who's supposed to do them.

Managers need to come up with well-defined workflows, methods, and structures that ensure all members of both teams fully understand what's expected of them and how their work complements that of the other department.

This supports efficiency and minimizes the risk of issues that could harm the business and sour interdepartmental relations.

3. Emphasize communication

Like many corporate processes and elements of business, collaboration between HR and payroll depends on healthy communication.

Many companies could benefit from introducing processes that facilitate and encourage communication between these two vital areas.

One way to do this is by scheduling regular meetings that allow team members to check in with one another, ask questions and give updates on their current work and priorities.

Keeping lines of communication open in this way helps ensure that key objectives concerning both HR and payroll aren't being overlooked. It also strengthens relationships and helps people get to know each other, which is conducive to positive workplace relationships and staff satisfaction.

4. Strengthen mutual understanding

A common reason for business departments to feel divided from one another - even if they work in very similar areas - is lack of understanding.

Payroll professionals may have more to learn about the importance of soft skills in HR, for example, while members of the HR department could benefit from gaining further insights into the exact function of payroll. After all, payroll involves a lot more than simply inputting numbers and sending out payslips.

Encouraging cross-departmental communication can help improve understanding, but you could see even greater benefits from dedicated initiatives such as giving people opportunities to spend time working in other departments.

This allows staff to get a frontline perspective on another team's work while encouraging a broader appreciation of the various functions that make the business run smoothly.

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