Role of payroll professionals becoming increasingly complicated
The payroll industry has undergone dramatic change, much to the benefit of payroll professionals who have seen their stock rise and job opportunities expand.
However, as the industry evolves to meet changing market needs that make the function of payroll more complicated, stress points are surfacing that could lead to a skills shortage.
There’s a shift to find payroll candidates with varied experience for medium-sized business and specialists for larger organizations, according to the Canadian Payroll Salary Guide, based on a survey of more than 2,000 Canadian payroll professionals done by Hays Canada in partnership with the Canadian Payroll Association (CPA).
How did we get here? Growth in this sector has climbed steadily in recent years. Advances in IT have democratized access to new markets, creating more medium-sized companies in the process. As a result, payment and benefit packages have become more nuanced. Where hourly rates once ruled as the de facto payment scheme, salaries, retirement savings plan (RSP) contributions and stock options became the new norm. Employers expected an existing payroll employee to add to her skills and manage the new regime.
There was also a considerable increase in foreign direct investment in Canadian resource-based companies, turning already large employers into very large organizations that operate across Canada and in international markets.
For these companies, payroll needs became complicated. Unionized environments, multi-jurisdictional payment and compliance knowledge rose as important areas of expertise. The payroll function became increasingly fragmented and, as a result, specialists were brought in.
Today’s payroll professional is a reflection of the demands of a modern workforce and its payment and benefit package expectations. At one moment, the role requires managing payroll in British Columbia while, the next, it requires creating a termination package for someone in Ontario.
Provinces have different rules to govern severance and distinct statutory holidays; then, stock options, paid leave and hourly wages must be taken into consideration. The 21st-century payroll industry as a group is far more diverse in skills than previous generations.
It’s estimated Canada’s 1.5 million employers rely on payroll practitioners for the timely and accurate payment of $860
billion in wages and benefits, $268 billion in statutory remittances to the federal and provincial governments, and $94 billion in health and retirement benefits, according to the CPA. There are also more than 190 federal and provincial regulatory requirements to juggle.
This trend will continue. Niche industry and multijurisdictional or international experience, as well as specific systems knowledge of PeopleSoft, SAP or cloud-based platforms, are in demand, according to the Payroll Salary Guide. And even after those criteria are met, employers place tremendous value on personality fit — the most frequently identified recruitment challenge. Employers also cite considerable gaps at the entry level and mid-management level for payroll practitioners.
Despite the fact that a rather stable payroll industry exists, we’re seeing the beginnings of a squeeze resulting from employers asking more from the current pool of talent, and an industry that must work harder to attract the next generation of professionals. This is how a skills shortage sets in.
Finding the right talent
While hiring levels are projected to slow for 2014, according to the Hays/CPA survey, that doesn’t mean a large exodus of payroll staff — the vast majority of employers (83 per cent) expect payroll staffing levels to remain the same and 12 per cent expect to increase their payroll headcount.
As an industry, more must be done to communicate the exciting challenges and opportunities for career growth in payroll. The role is becoming increasingly complicated. There are opportunities to grow skills at medium-sized companies or to specialize at large ones.
But it doesn’t end there. A career in payroll can lead to a career as a CFO — 12 per cent started their careers in payroll, according to a Hays survey of just more than 100 Canadian CFOs.
Also, salaries in this industry are good. A payroll co-ordinator with one to three years of experience typically earns between $40,000 and $50,000 per year, while a payroll manager with five to 10 years of experience typically earns between $70,000 and $80,000 — at the high end, it can be as much as $150,000.
Salaries are higher for practitioners who are certified by the CPA, especially for supervisory roles. Certification is a good idea anyway as employers overwhelmingly favour candidates with certification, especially since the financial crisis. This requirement will only become more important.
While the payroll industry has already undergone significant change, it must continue to evolve if it is going to address the challenges of an increasingly complicated business environment. Otherwise, it will suffer the fate of many industries across Canada, where skills shortages are pandemic.
Antony McElwee is senior manager of accounting and finance at Hays Canada in Calgary. For more information, visit www.hays.ca.