Paying the right amount, on time, is important to maintain staff satisfaction and productivity. For most NFPs, salary costs are a significant proportion of the budget, making payroll services more important than for organisations that have smaller payrolls.
On average, organisations that we work with spend 0.3% of their total organisational expenditure on payroll services.
What we have learnt
Payroll size or complexity influence cost and quality - Payroll complexity relates to the number of casual and roster pays and the number of pays across multiple awards – factors which most NFPs are unable to control. Organisations that have new, dispersed, and shift-workers require greater coordination, are less suited to electronic systems and thus, require more manual entry. This results in greater data entry per minutes, higher chances of human error and payroll costs
Outsourcing payroll services should be assessed cautiously on both cost and quality – Some NFPs that outsource their payroll services experience drops in quality and breakdowns in communication with other back-of-house functions (e.g. HR and Finance)
Integrating payroll with other functions can prove challenging - Many NFPs grapple on ongoing basis with how to integrate their payroll systems with closely aligned functions such as HR and Finance.
How to deliver more efficient and effective payroll services
Implement automated features - Automation can occur within existing (or new) payroll systems (e.g. automating rostering or timesheets). Pilot your system first to address any obvious issues and provide training to staff to improve the uptake and consistent use of automated features.