What is the value of global payroll data to the employer?
It is the most regularly updated, consistent and insightful data about your company’s employees.
- How can this data be used in order to increase the efficiency of your company?
- Can the employer leverage the payroll data in order to get to know its employees inside out?
- Will the payroll data analytics place payroll management at a more strategic position within the company management?
Data analytics with a human touch
In the recent years, multinational companies moved payroll from finance departments to human resources departments, redefining payroll as a people focus discipline rather than pure numbers. Global HR service providers agree that more and more employers are looking for payroll professionals with analytical skill sets that could take payroll to another strategic level where employees’ performance improvement can be precisely measured, analyzed and enhanced systematically, and can apply within a centralized unified system throughout countries and regions.
CEO of Datassist Payroll Services, Umut Ozbagci adds that “Payroll analytics also covers that the input and output data for payroll are handled with other corporate specs and employee data. When viewed from this aspect, the integration of local payroll management technologies and global HRM/HCM systems is the hottest agenda of Future Payroll.
As Datassist Payroll Services, we connect our own payroll-centric SaaS solution Dakika.com.tr with global systems such as SuccessFactors, SAP, Peoplesoft or Workday with strong integrations. Thus, you always have the technological infrastructure necessary for the payroll analytics.”
With data analytics comes benchmarking: what’s the average wage in this company’s Accounting department in Turkey? What about in Europe? Globally? What’s the highest pay in the world? What is the gender gap in salaries in the US? In Europe? Which country has the highest gap? All this data will be paired with the socio-economic factors, unique to that country and larger region.
Every company will look at the data from a different angle based on their overall business and HR goals.
Starting with a few general benchmarks (agreed upon by global HR platforms) can help companies identify their own set of benchmarks when analyzing their own payroll data.
- Labor cost comparison – Total cost of specific roles in certain countries (a detailed breakdown of salary, tax and side benefits). This gives the global or regional company a better sense of the true cost of its payroll in a comparative manner. This comparison can be a major factor in global expansion decisions where new team’s labor costs are taken into account.
- Compensation data – compensation or salary plus bonus can be used as a benchmark to attract and retain a certain talent.
- Overtime – in which countries and roles there is an overtime pay, what’s the cost per hour, and how does it compare from one country to another? Business decisions lie in effective workforce planning and work efficiency in order to prevent overtime in high overtime regions.
- Labor trends – what’s the average length of employment? By age, gender? Country breakdown? What’s the succession plan? If the turnover is very high, what’s the talent retention strategy? Why do people leave? How can the company invest in its people to work for longer periods?
Data analytics can help HR professionals figure out bad hires or mismatches within the recruitment process that results in early job terminations. If a certain position doesn’t get filled easily or gets filled but no employee lasts, non quantitative factors such as workload, difficult department or boss, should be looked into.
All in all, payroll numbers point out where the problem is and it is the HR department’s job to reveal the real problem behind the obvious one, with a people oriented approach.
In this new day and age of doing business, the new language is technology empowered by data. Companies that can make sense of their own data will be sustainable, departments that lead the way will gain strategic advantage.
It is time for HR to take lead with payroll analytics!
Ela EROZAN GÜRSEL