For many organisations in Australia, wages and staff entitlements is the biggest costs to doing business; yet many organisations struggle to maintain data that accurately captures the fundamental figures that underpins labour costs; such as number of employees, employee classification, hours worked, allowances and loading.
Accurate labour cost data not only enables an employer to obtain a fulsome picture of business performance, efficiently roster staff and reliably forecast labour costs, but also wage data is never more crucial given the scrutiny that employers are currently facing to ensure that they have not been underpaying their workers.
When an underpayment of employee entitlements has been identified, the magnitude of seemingly minor payroll input errors and data deficiencies, can represent major hurdles on the path to a successful backpay remediation outcome.
In performing remediation programs of all sizes, we have identified common challenges faced by organisations in obtaining and relying on employee data. These most common barriers can limit the accuracy and reliability of wage recalculations arising from:
- Inaccurately captured time and attendance records, e.g. clock on / clock off times.
- Inconsistent and non-contemporaneous employee records, e.g. same employee having two different employee payroll IDs.
- Discrepancies between enterprise agreement and award provisions and legal interpretations, resulting in incorrect classifications and mapping of employee roles and positions to corresponding instruments.
- Historical changes or upgrades to payroll systems and processes with varying standards and legacy formats.
- Insufficient linkage of payroll data sources, such as roster, time and attendance, payslips, deductions, causing time and attendance records to not be reconcilable to payroll records.
- Payroll adjustments and retrospective changes without documentation of why back-payments may have been made.
- Reliance on analogue, non-machine-readable records, such as handwritten roster sheets, travel reimbursements, signed annotations and comments made to records.
A review of payroll data through means of sample or analysis to identify issues such as the above, will enable organisations to remediate more efficiently and economically, by getting on top of the hurdles to a successful remediation. In addition, and on a more positive note, only then can organisations unlock the full potential of their data and gain additional insights to drive organisational efficiency and performance.