Reshaping the Role of the Payroll Specialist
Learn how organizations can attract and retain top talent by transforming the payroll specialist role into a strategically focused position.
Traditionally, a payroll specialist manages all aspects of an organization's payroll to ensure employees are paid accurately and on time. However, the responsibilities of today's payroll specialists extend beyond ensuring timely and accurate employee payments.
Despite the importance of this role, it seems fewer and fewer people are drawn to it. The ADP Research Institute recently presented data at an executive strategy summit showing that payroll specialists tend to be older — more than 70% are above age 40 — but that Gen Z and millennials seem to be avoiding it, with most spending less than three years in the role. The majority (54%) of payroll specialists are considering switching jobs this year.
To keep up with waning interest in the role, organizations can reshape what being a payroll specialist means by placing a bigger emphasis on overall strategy, boosting appreciation for the role by providing clear career progression paths and using technology to increase efficiency.
This, in turn, may help attract and retain top talent, as well as appeal to a younger and more diverse workforce.
The employee experience of a payroll specialist
Depending on the company and industry, a payroll specialist's typical workday can vary, but it usually entails repetitive and cyclical tasks, such as overseeing the employee compensation process, managing tax filing and routinely preparing related reports in a deadline-driven environment. This can be quite stressful, particularly during peak times like month-end or year-end. You may address this by instating sophisticated payroll solutions that offer strong analytics and reporting features, enabling your specialists to produce thorough reports quickly and make data-informed decisions.
Payroll processing often involves repetitive work, including calculating wages, taxes and deductions. Automated payroll software can help lessen these tasks and save time. Additionally, automation reduces the possibility of human error. Remember that mistakes in payroll processing may have serious consequences. According to the IRS, companies faced penalties of nearly $7 billion in 2021 due to payroll errors.
Payroll specialists communicate with various departments, such as HR, finance and IT, to obtain required data, address problems and ensure accurate payroll processing. Payroll practitioners also frequently handle queries from employees regarding their pay, benefits, deductions and other payroll-related matters. Implementing an employee self-service portal allows people to view their pay stubs, tax forms and personal information on their own, which can reduce the administrative burden on payroll professionals and allow more time to focus on strategic activities. Employers can even implement an employee experience feedback strategy to help combat potential turnover.
Why younger people are unlikely to stay in the job
According to the Gartner for HR Leaders Report 2022, research shows that younger people may be less inclined to accept a position as a payroll specialist. And even if they do, they are unlikely to stay in the position for very long. In fact, only 6 percent of 20- to 30-year-olds are currently in the role and are likely to quit before their three-year work anniversary.
The data, provided by insights from Indeed.com, the U.S. Department of Labor and ZIPPIA Careers, also shows that more than 70 percent of payroll practitioners are over 40 years of age.
This may be due to the perception that payroll role tasks are administrative rather than creative, which may not align with younger professionals seeking diverse job responsibilities. This perception could discourage those who are looking to make a significant impact early in their careers from accepting a job as a payroll specialist.
Younger generations may also have skills and interests that align more closely with other areas, such as data analytics or project management, and might view payroll as a stepping stone to these other fields.
Organizations can address these challenges by showing opportunities for clear career progression paths within payroll and related fields, as well as opportunities for skill development and continuous learning. It's also important to emphasize the strategic importance of the payroll function and implement advanced payroll technologies to make the role more dynamic.
To help ensure a supportive and engaging work environment, offer employee mentorship opportunities to help payroll candidates see a more defined career trajectory.
Making the role more strategically focused
A payroll specialist can take on a more dynamic role within your organization by expanding their focus beyond routine payroll tasks to include broader organizational goals and initiatives. A way to achieve this includes leveraging payroll data to provide insights into workforce trends, such as overtime patterns, turnover rates and salary benchmarks. This information can help support your business with strategic planning and decision-making.
Other areas to diversify focus include risk management responsibilities by having your payroll specialists proactively stay up to date on changes in labor laws, tax regulations and compliance requirements. Additionally, you can ask them to identify opportunities to streamline processes.
To increase efficiency and accuracy, this may entail automating manual processes, optimizing workflows or implementing new technology. Make sure managers, employees and HR personnel receive payroll-related training. This can improve the general understanding of payroll processes and ensure better compliance and accuracy throughout your organization.
By assuming these strategic roles, payroll specialists can position themselves as important contributors to your business's overall performance and, at the same time, enhance their career prospects and professional satisfaction.
Need help finding the perfect solution for your business? ADP offers payroll and HR solutions, from basic payroll to HR management, tax and compliance, outsourcing, Human Resources Information Systems (HRIS) and more.
