Payroll in times of Crisis - Building a Payroll Continuity Plan (PCP) for your business
Do you have a Business Continuity Plan for your payroll?
Recent events in the industry have served as a reminder on the importance that needs to be placed on developing and maintaining a continuity plan for your payroll (a ‘PCP’ if you will) for your business and to ensure that you, your vendors, and your service providers understand what is required for payroll in a crisis.
A PCP should be more than “we will just process our last bank file again” (which is rarely the best or most viable option) and it should cover a variety of scenarios and timelines. How you respond to a scenario a week out from your pay day can be different to how you respond to the same scenario if it happens the day before your pay day. Likewise, loosing access to one or more of your solutions for a couple of hours can result in a different strategy than loosing access for days or weeks.
A PCP is different to your IT Departments Disaster Recover Plan however they should be connected and understood by both areas for where they intersect. It should be a part of your broader Business Continuity Plan (BCP). If you don’t currently have a BCP for your business (you probably should talk to someone about that) you don’t have to wait to start developing the PCP component.
How you respond to a scenario a week out from your pay day can be different to how you respond to the same scenario if it happens the day before your pay day.
Your PCP should cover a variety of situations that could happen and should have a range of different options and plans identified for those different situations as they may develop over time, and you should be planning ahead and know at what point each of your options become unviable as the situation progresses.
Below we have included some areas and example scenarios to get you thinking about things to include in your PCP, but they are by no means exhaustive. We would expect there would be many other scenarios that could apply to you or your workplace, and that not all workplaces have the same potential scenarios or possible options available to them, so you need to make sure that you are thinking about this as it applies to YOUR business
People – what happens if you lose access to your payroll team, or any other key people within your payroll process such as site admins that may send you timesheets, finance staff who approve payments in your bank. Are there people with the relevant expertise, knowledge and access to be able to support the team if needed?
Locations/ Physical – what happens if you cannot access your work location? This could be because of something happening to your actual premises, or access could be restricted for other reasons (road closures due to weather, travel restrictions).
Hardware – what happens if you lose access to key hardware such as laptops or desktop computers, printers, scanners – again, you may need to think beyond your payroll team for other key areas.
Software – this is not just your payroll solution, if you rely on other systems and software such as 3rd party timesheet systems, emails, integration software, document management systems, 3rd party HR or Recruitment solutions, super clearing software…. there is so much more than you may realise that you rely on when you really start thinking about it.
Infrastructure – this is where all your data and connections sit (for example Servers). This may be on one of your sites, or it may be hosted somewhere else (often referred to an being on the cloud). In most businesses there is a mixture of both. Again, it is not just your payroll solution that you need to think about, what if you lose access to your files and folders? Or your integration connections are disrupted? The email or print servers may be what’s impacted?
Who needs to fix it?
It may not always be up to payroll to fix and resolve the core issues (this is where your IT Disaster Recovery Plan or your broader business continuity may come in) but it is important for payroll to understand what is happening, and to be able to stay informed of the progress so that they can adapt to the situation as it unfolds.
When you have a hosted solution or there is a 3rd party service provider in the mix then it becomes critical for those vendors and service providers to make sure that you stay informed of the cause and the progress of the resolution so that your business has the information needed to respond appropriately as the situation unfolds.
A communication strategy needs to be clear and concise and be designed for managing the issues in a crisis situation where stress response is already high.
That’s Communication!
Your PCP should include a communication strategy. A communication strategy needs to be clear and concise and be designed for managing the issues in a crisis situation where stress response is already high.
Some things to think about with a communication strategy:
In the middle of a crisis, it is important to ensure that you have a plan of who communicates with who – a central point of contact is vital to limit the chaos
Setting a schedule of updates between the central points of contact can help keep things in order. Depending on the severity and volatility of the incident, this could be as frequently as every hour, but more commonly twice daily (start of day and end of day) plus major changes in situation.
The staff that need to be “doing the fixing” need to be kept free of interruptions and disruption. They need to be able to focus on what they need to do and know that information that they need will come from a single source as they need it.
The central point of contact for payroll should be responsible to speaking with other central contacts (such as IT or the vendor) to ensure that the communication remains consistent. This will help those teams stay focused as well.
You need to review it!
Your PCP shouldn’t just sit on the shelf collecting dust. You should practice (or at least walk through) your PCP and update the plan to suit the changing IT and Business environments that are inevitable to happen over time.
Think you are safe? That it can’t happen to you?
If you think that you are safe, and that these things would never happen to you, think again. Things happen regularly, whether on small or large scales, and can be caused by lots of different events.
Here are a few things that have happened recently that could happen to any business at any time. They are far from exhaustive.
Corporate system breach with Frontier Software which resulted in approx. 330 hosted clients losing access to their payroll systems for up to 4 days (2021)
Queensland floods cut off many city-based businesses from staff (2011)
Website Domain host GoDaddy who had a major security breach risking the stability of thousands of domain accounts (2021)
Oh, and a small thing called a Pandemic that continues to be an ongoing risk for all businesses… (2020-????)
In my payroll management career I have experienced many events that did or had the potential to disrupt the payroll delivery, from bomb threat evacuations, to major power outages, to mass walk outs of staff and strike actions. It really can happen to any business.
Gemma McDonnell-Mossop
Director | Independent Payroll Consultant
Payroll Edge Consulting are all about helping businesses do payroll better.
If you think your business needs help preparing a robust plan for your payroll then contact us at info@payrolledge.com.au to book a free initial consultation to see how we could help your business.
Because… that’s how we payroll…
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