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There's a lot that goes into paying people on time and I’m certain that it's not something your company, or any company for that matter, would dare to risk! Paying people on time every time is not a skill so easily learned, nor something that everyone possesses. And if those skills lie in just one person, you could be in some real trouble.

Avoid a payroll catastrophe by asking yourself these questions:

  1. How many payroll officer/s do you have?
  2. Do you know if your company is prone to suffer from key-person risk?
  3. Is your payroll process dependent on one person?
  4. Are any of your other staff trained to process payroll, run critical payroll reports, pay taxes, and report to ATO?

How to Avoid Key-Person Risk

As a remuneration and benefits manager, HR manager, or CHRO responsible for remunerating and rewarding people, here are a few things you want to make sure you have in place:

  1. Get your payroll officer/manager to document everything they know. By documenting everything they know about processing payroll, the order of performing payroll tasks, payroll checklists, reporting requirements, and their stakeholder interaction maps, you're one step closer to avoiding key-person risk in your payroll department. Seem excessive? Well, you’ll thank me when the payroll officer falls ill, leaves unexpectedly, or needs time-off during payroll!
  2. Understand the pay periods and timelines, especially noting cutoff periods for data submission and updates, leave processing, determining leave liabilities, allowances, periods for opening and closing self–service systems, banking timings, and related funds release processes. Every person who knows, and hopefully masters, these details instantly becomes invaluable.
  3. If you haven’t already, upskill someone internally to be a payroll backup. Now that you’ve got everything documented, it is as simple as organizing a training regime. With another person in the department who knows the entire process, you lower your key-person risk to almost zero.
  4. Talk to your payroll system/service provider; they will most likely offer a payroll business continuity and disaster recovery service. Conduct a cost-benefit analysis to subscribe to such a service vs. training someone internally vs. other options. These services are offered at both % of payrolled employees as well as fixed cost models. If you already outsource your payroll, make sure you ask them about their business continuity and disaster recovery processes.
  5. Lastly, remember that the complexity of the backup solution will depend on the number of people you pay. The greater the number, the higher degree of risk and hence the higher requirements for a backup and disaster recovery process. So you will want to look into solutions that will allow you to get more done for more people to allow you to stay on time.

Related Read: 10 Best Employer Of Record (EOR) To Consider For HR Outsourcing [2023]

Online Payroll Software

If having the work done manually is too costly, there are payroll software solutions that will get the job done. We also have two helpful lists of the 10 Best Online Payroll Software and the 10 Best Payroll Software Reviewed and Compared you can explore to find the best match for your company's size, needs, and any specific features you might be looking for.

But what if your business isn't quite as big but still has the same concerning issues? Read our guide on How To Manage Payroll For Small Business.

Need expert help selecting the right tool?

We’ve joined up with to give all our readers (yes, you!) access to Crozdesk’s software advisors. Just use the form below to share your needs, and they will contact you at no cost or commitment. You will then be matched and connected to a shortlist of vendors that best fit your company, and you can access exclusive software discounts!

Need More Help?

As always, for any advice on payroll process documentation, mapping of payroll processes, or discussing how to go about setting backup and disaster recovery processes please feel free to leave your comments below. Better yet, join our people and culture community.

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By Tim Reitsma

Tim is the co-founder and General Manager of People Managing People, an online publication focused on building a better world of work. He is experienced with people & culture, leadership, business strategy and operations with a focus on building great teams who are excited about their craft and their organization. With over 15 years of leadership experience, Tim has always been guided by his core values: faith, family, curiosity, and fun. He is a coach, mentor, speaker, advisor, and an active volunteer in his community. Tim loves spending time outdoors with his wife and two kids as well as mountain biking in the north shore mountains.

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