John Petter, CEO Zellis
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Is COVID-19 HR's opportunity to build back better?

29th Jun 2020
John Petter, CEO Zellis
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The current COVID-19 (coronavirus) crisis has affected us all in different ways. But whatever our commercial differences, our industry is united by a common goal – to safeguard the wellbeing of colleagues within our organisations.

For this reason, I believe our ‘people professionals’ should be recognised unsung heroes. While perhaps not as visible in the public eye, they have played a hugely significant role in responding to workforce disruption unlike anything the majority of us have seen before. I was delighted when payroll staff were recognised by the government as key workers.

All of a sudden, HR teams have been faced with unprecedented challenges such as rapidly enabling remote working, ensure safe social distancing in factories and warehouses, and minimising the impact of isolation on workplace culture and morale. If administering furlough schemes has been difficult, the next phase of the crisis promises to be harder still, as when the scheme is withdrawn companies will face difficult choices around redundancies and pay reductions.

Of all the parts of HR, payroll has arguably been hit the hardest. At Zellis, we conducted a survey of large organisations across the UK and Ireland, with nearly a third (30%) reporting a loss of capacity in their payroll function as a result of the crisis. Payroll teams told us that sickness and absence disproportionally affected the small teams they work in, whilst remote access to workplace systems wasn’t always easy. All of this occurred at a time when they were trying to calculate the impact of the government schemes on peoples’ pay.

Seeing the opportunity in crisis

In Chinese, the word ‘crisis’ is formed of two characters. One meaning ‘danger’, and the other meaning ‘opportunity’.

I think this is a valuable way of looking at the current situation. We’re already seeing clear signs of how payroll, HR, and the employee experience as a whole will be transformed - in a positive way - as a result of the crisis. Organisations will need to focus new investment in key areas to improve their resilience, while trends that were already very much in motion will be accelerated.

Here are three specific areas for organisations to focus on.

Improving the employee experience for remote workers

Organisations that haven’t already normalised remote and flexible working will undoubtedly want to do so. But what does this mean in practice? Whereas in the past the physical workplace environment had an outsize influence on company culture, I believe that now the digital employee experience will assume this predominant role.

As remote working becomes the ‘new normal’, having access to quality tools to support collaboration, communication, and productivity will become more important than ever. From an HR point of view, this means the administration that is so important to correctly managing employee records and pay will gravitate further towards self-service delivered through apps as a mobile experience. Moreover, companies will have to address the wellbeing risks from prolonged isolation – and there will almost certainly be an explosion of interest in apps to promote company values and improve morale.

Creating resilience in your payroll and HR operations

In addition to addressing the employee experience, organisations will need to build resilience in their operations, in the event that the current crisis is protracted or similar events occur in the future.

Payroll is one of the vital organs of any organisation – company health and indeed survival relies on everything being accurate, and payments happening on time, every time. However, the current crisis saw many organisations come close to the brink. Almost half the firms in our survey (44%) said they weren’t confident about their ability to keep payroll operations running correctly during the peak of the lockdown. This underscores the importance of strong business continuity planning, including employing third-party support where absences in small teams put business continuity at risk. In fact, nearly 40% of organisations told us this is an area they will focus on moving forward.

More generally, the crisis will likely hasten the rapidly growing trend towards adoption of cloud-based technology. Maintaining on-premise infrastructure was challenging for many firms during lockdown – and companies struggled with the cost and speed of VPN solutions. Almost 20% of payroll and HR professionals struggled to get access to their essential IT while working from home.

It’s no accident that the share prices of major cloud companies have surged in recent months. Cloud-based solutions offer organisations greater flexibility to scale their operations up or down as needed – and this may be especially useful during times of instability. Plus, with stronger opportunities to automate routine tasks in the cloud, HR teams can take back valuable time to focus on addressing complex issues, such as employee engagement and wellbeing. Some organisations will also be attracted by the additional benefits offered by cloud hosting, such as enhanced security and environmental credentials.

Staying ahead of the curve on regulatory change

We’ve already seen just how dramatically the crisis has shaken up the traditional ‘terms and conditions’ of employment, particularly with the introduction of measures such as the Coronavirus Job Retention Scheme in the UK and the Temporary Wage Subsidy Scheme in the Ireland. The sheer complexity of government guidance means that organisations run a higher risk of getting it wrong.

One of the key features of the crisis has been the predominance of national governments in leading the response. Companies that make airy claims of ‘global’ payroll have been caught napping by this – leaving their customers to struggle with Excel to ensure accuracy in payments and claims. On the contrary, where the legislation has been incorporated into software, firms have been able to respond and claim faster, and with more confidence. The lesson here is that payroll remains a national business, and customers should really test the credentials of suppliers when it comes to automating national legislation.  It would be wise to assume that future phases of the crisis will necessitate more government action. Therefore organisations should, as far as possible, act now to prepare.

The COVID-19 crisis will force change in many areas out of necessity. Firms that fail to respond won’t thrive - and may not even make it through. But we shouldn’t just look at it from this perspective. This moment represents an inflection point to accelerate real transformation – to enable a digital employee experience, to make a move to the cloud, and for firms to equip themselves for growth in the recovery that will follow.

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