Payroll professionals play major role in economy

‘HR should be particularly interested in working with payroll colleagues who are empowered to take on new strategic roles’

Payroll professionals play major role in economy

Payroll professionals do so much more than payroll. To better understand their impressive contributions, the Canadian Payroll Association (CPA) partnered with PwC to gain further insights. Peter Tzanetakis, president of the CPA, discusses the findings:

  • Why did you set out to study the economic impact of payroll professionals?

“The Canadian Payroll Association represents over 40,000 payroll professionals and works with employers, payroll service and software providers, and governments to make payroll legislation and administration more efficient and effective.

Unfortunately, the work of payroll professionals often happens ‘behind the scenes,’ obscuring their many valuable contributions and the complexity of their jobs.

That’s why, throughout 2020, the association has worked with PricewaterhouseCoopers (PwC) Canada to conduct a comprehensive study, the results of which bring payroll into focus through a series of three reports:

  • What were your key takeaways from the study?

“Payroll is essential to Canada and its economy. The Economic Impact of Payroll Professionals in Canada confirms that payroll professionals play a major role in the Canadian economy both directly and indirectly. Directly, payroll accounts for almost 84,000 jobs across Canada and $8.6 billion in GDP. Indirectly, payroll improves productivity, data collection, governance, and the employee experience — which are all critical elements for business success in Canada.

“COVID-19 is an excellent example of when payroll professionals can have a significant impact. So many new programs, like the Canada Emergency Response Benefit (CERB) and Canada Emergency Wage Subsidy (CEWS), were rolled out in a short time, and payroll professionals were responsible for responding to those requirements.

“As just one example, innumerable Records of Employment needed to be produced so that terminated employees could receive government benefits in a timely manner.”

  • How do payroll professionals support organizational productivity and efficiency? What are some of the benefits they bring that might surprise senior leaders?

“PwC Canada surveyed over 2,400 payroll professionals from across Canada and found that the top three productivity initiatives that payroll professionals are involved in are audit procedures, working cooperatively with HR and finance, and enhancing employee scheduling.

“Audit procedures are mandatory, and when they are not done correctly, can require significant time to correct errors and respond to issues. Effective audits, managed by knowledgeable payroll professionals, help to identify errors in payroll such as overpayments that can be significantly costly to employers.

“Facilitating cooperation between HR and finance departments, which payroll often sits between, can significantly reduce time spent on matters that affect multiple departments, such as termination agreements. Communication between these departments can also enable seamless data sharing to inform data-driven decision making.

“Employee scheduling, meanwhile, contributes to managing overtime payments and compliance obligations.

“These initiatives and others can have significant impacts on employers’ costs and efficiency.”

  • How do payroll professionals support the employee experience?

“In the face of growing global competition for talent, employers are increasingly focusing on employee experience as a differentiator to attract and retain the best and the brightest.

“Payroll professionals are uniquely positioned to affect the employee experience because they deal with one of the most sensitive aspects of work: compensation. But PwC Canada’s research reveals that’s not all they do. On a day-to-day basis, payroll professionals work on several activities that significantly affect the employee experience — fixing payroll errors, managing benefits, and providing guidance and insights on organizational policies.”

  • Do payroll professionals help improve the employee experience beyond simply eliminating payroll mistakes?

“Absolutely. Most employees can take for granted that their pay is error-free. As a result, eliminating errors doesn’t so much ‘improve the employee experience’ as it prevents the erosion of employee trust or engagement.

“When it comes to improving the employee experience, a crucial responsibility that most payroll professionals have is interfacing with employees from all parts of the organization. This communications work ranges from fielding ad-hoc employee inquiries to obtaining and responding to employee feedback. Through these interactions, payroll professionals can have a significant impact on the employee experience of individual employees.

“Payroll professionals are also central to providing employees with highly valued benefits and wellness programs. Beyond administering these programs, a sizable number are actively involved in strategic plan and policy design. According to PwC Canada’s survey, 41 per cent of professionals involved in benefits programs are moderately to highly involved in employee benefits programs and policies.”

  • What should HR and payroll professionals take from this study?

“This report underscores how essential payroll is to business success in Canada and the economy as a whole. It also reveals the strategic potential of payroll. By empowering professionals, businesses improve productivity and create a more positive employee experience — both of which can be differentiators that drive success. In the future, that value will only grow and evolve as technology transforms the workplace.

“HR professionals should be particularly interested in working with payroll colleagues who are empowered to take on new strategic roles. Through payroll-driven key performance indicators (KPIs), organizations can better understand their human capital and manage that vital resource more proactively than ever.”

Latest stories