When management wants to know how changes will affect staffing costs, or staff expenses, the Payroll department is their “go-to” for these answers. We are trusted to give accurate information, so they know they can rely on our reports, projections and opinions to make decisions. Decisions which could have far-reaching consequences for the company. Therefore a great responsibility rests on us to provide accurate historical reports ( usually a print out from Payroll) or even to offer a projection. And on these management will base their decisions. This is Payroll’s chance to shine, to make their mark…and be sure to get it right!
When asked for a projection, it’s Payroll’s opportunity to be centre-stage. You may be asked to “run the numbers, maybe run 5 different scenarios, with 3 different minimum wage options. We would like to see how it all works out.” 
What if we introduced a pension fund…. What would it cost at 5% ,7% or 9%?
What if the government increases the minimum wage? To R 4500 or R 5000 or R5500?
Could we survive?
What if we gave everyone an extra day of leave…. what would it cost?
The payroll department are the “go-to people” to answer all the” what if” questions.
We do the forecasting and scenario planning. We take the data from the payroll and manipulate, and number crunch, before presenting management with a couple of scenarios to work with. If we are respected, we may even be asked to venture an opinion as to what we think the best option is.
How to live up to this responsibility
Make sure you have a payroll system that can extract data in a format that you can use. It is great when you can get the report in excel, and then work from there. If the payroll software can do the analysis and “what if” planning, even better.
Make sure your payroll data is up to date, and that you are working in the right month.
Make sure the software can provide you with the right base information so that you do the projections using the correct data.
Test your understanding of what is required. Stop, plan and then act.
Test the data before the “what if” analysis begins. Make sure you have taken into account all the variables.
Test the final conclusions for reasonableness.
Present the results in an easy-to-understand format. For instance, graphs work well. Perhaps consider a “bottom line” summary, then one can dig down if necessary.
And what to do if you are not asked…?
BE PROACTIVE! Analyse your Payroll, and look for trends. Look out for possible savings. Watch the news, so that you are up-to-date with new legislation. Do reports and present them to management, even before they ask.
Do a monthly analysis of what’s happening that could impact your payroll. Then include these in your monthly reports. Maybe add a small “Heads up” section.
For example, consider the changes in retirement funding in this country. How will it impact your payroll? Will you communicate to management the change in taxation? How will the payslip look now, since the provident fund contribution is no longer taxable?
There is a huge responsibility for us in these “ What if” scenarios. But also a huge opportunity to enhance the reputation of your payroll department. Grab them with both hands!
