More than three-quarters of employers have no succession plan in place
Despite challenges employers say they face recruiting and retaining skilled payroll professionals, more than three-quarters admit they do not have a succession plan for payroll staff, a new survey finds.
The survey, part of Hays Canada’s annual Payroll Salary Guide, found 78 per cent have no plan in place to develop qualified payroll professionals to fill critical positions within their organization.
"That number has been almost static for three years now," says Antony McElwee, director of sales and client relations at the recruitment firm.
The survey found 71 per cent of employers say there is a moderate to extreme shortage of skilled payroll professionals, with junior and middle management employees being the most difficult to find. One-third of employers report retention is a challenge.
Succession planning "enables you to plan long-term, to invest in the talent and training that will have the most future impact and to retain key employees through better career planning," says Hays Canada president Rowan O’Grady in the survey report.
Lack of planning is also at odds with employees’ career goals.
"In this year’s survey, 84 per cent of (payroll) people said they want to reach a management-level position," McElwee says. "And then, ironically, when we asked what (employers’) biggest retention issues were, number two was career progression at just over 35 per cent."
"There is a really big disconnect there between what employers are doing to ensure succession compared to what employees are looking for in their employer," McElwee says.
He notes that for some employers, a lack of resources may prevent them from developing a succession plan.
"I think in some companies, it is a lack of ability. If you are a smaller business and you have only got one person in payroll, I can understand how that would be a problem, but for larger employers, I am not entirely sure why they are not doing anything about it," he says.
"We see it as a trend across all industries and types of positions. It’s just interesting that in an area that has been skills short for such a long period of time, that companies aren’t doing something about it," McElwee adds.
While he admits succession planning can be more difficult in challenging economic environments, McElwee adds "developing a succession plan is a pretty low cost thing to do and it can be done on a departmental level. It doesn’t need to involve your entire organization."
Recruitment, retention
Beyond succession planning, the survey identified issues employers face when trying to recruit and retain payroll staff. When it comes to recruiting, the biggest challenge for employers is finding a candidate with the right personality fit, according to 31 per cent of employers.
Other challenges included finding a candidate with: payroll credentials (17 per cent); specific system knowledge (16 per cent); compliance knowledge (15 per cent); experience in the employer’s industry (14 per cent); and multi-jurisdictional/international experience (seven per cent).
For retaining staff, the number one challenge was salary, with close to 40 per cent of employers identifying it as an issue. Closely following salary was career progression. Other challenges included a competitive market for top candidates, employer culture/reputation and non-monetary rewards.
The survey found fewer than 50 per cent of payroll professionals think their employer pays them at or above market level. Thirty per cent think their compensation package is not competitive with market rate and 22 per cent say they do not know how their salary compares.
McElwee says while employers should have concerns about the number of payroll employees who do not feel they are paid a competitive rate, there are other things organizations can do.
"The reality is... there is only one person that can pay the most and that goalpost is constantly moving. I think the thing to take out of that is that it’s a skills-short area and if you’re not paying the best in the market, there are other things you can do to keep them happy," he says.
Benefit preferences
Employers should ensure the benefits they offer align with what employees want. The survey found the top benefits are pension/registered retirement savings plan (RRSP) contributions/matching, health and dental plans and flexible work hours.
"Believe it or not, only 25 per cent of companies actually offer all three of those things. That’s been consistent across the years," says McElwee.
While 96 per cent of employers surveyed have health and dental plans, only two-thirds offer pension/RRSP contributions and just half provide flexible work hours.
"Those three things and a succession plan would go a long way to improving a company’s retention and attraction rates when it comes to payroll," says McElwee.
While some employers may not want or cannot afford the cost of pension/RRSP contributions, McElwee says flexible work hours can make a big difference while costing an employer very little to implement.
"If employers think strategically about it, they can probably offer things like compressed workweeks or early start/early finish, or late start/late finish, those types of things. They are very important to people these days when they’ve got a dual-income family with childcare pick-ups and drop-offs. If you can make the life of your employees easier, you will be much more likely to retain them."
Salary rates
Hays’ salary guide sets out the minimum, maximum and typical salaries for various payroll jobs across Canada. For instance, it says that a payroll and benefits specialist with three to five years’ experience typically earns between $55,000 and $59,999 a year. A payroll manger with three to five years’ experience earns an average of $70,000 to $79,999 a year.
Hays says about 47 per cent of payroll employees can expect pay increases of up to three per cent this year, while 23 per cent will not receive a raise. In 2015, only 15 per cent of employer respondents predicted they would not raise salaries, but by the time the year ended, the actual number was 23 per cent.
McElwee says Alberta is driving this change due to the drop in oil and gas prices.
"There were 41 per cent of respondents who saw absolutely no salary increases in Alberta last year. That is the big change. Alberta has probably been the engine driving increases across the country for the last however many years. That’s obviously not happening now."
He adds "B.C. and Ontario still came through with pretty strong numbers and saw strong demand in terms of salaries and the increases that are predicted for the next 12 months."
McElwee suggests think beyond their pay rate.
"Given there is such a big disconnect between the three benefits payrollers are really looking for and what employers are offering, perhaps when they are negotiating, if things like flexible work options are important to them, perhaps that’s more important than a raise," he says.
Whether salary or career advancement is the main driver, McElwee recommends all payroll employees become certified as Payroll Compliance Practitioners or Certified Payroll Managers with the Canadian Payroll Association. While the lack of employer succession planning presents a challenge, certification will help them advance.
"We have proven over the last three years that having the payroll certification or the payroll manager certification can help you earn up to 20 per cent more and... as you want to progress your career, that goes from a desirable skill qualification to have to an essential one. Organizations really need to know that the senior people on their payroll teams are qualified to do the job. That’s an absolutely key requirement," says McElwee.
He also recommends gaining experience with systems implementations and complex payroll environments, such as unionized workers, employees in multiple Canadian jurisdictions and international payroll.
"(This) will really help you to progress through your career because you will understand how to fix the bigger problems for companies," says McElwee.
