London Black Cab Taxi drivers must pass “The Knowledge” test before they become licensed to work. This requires them to have full recall of a network of up to 25,000 streets in a six-mile radius from Charing Cross, a course that typically takes three years to master and requires constant updating for diversions, new traffic signage and ever growing restrictions on the timing and usage of vehicles in central London. If that sounds daunting enough it doesn’t even begin to stack up against what the average payroll department must deal with around the globe. Payroll is governed by primary legislation covering taxation and social security contributions, with detailed procedure covered by regulations, and additional law covering diverse issues such as court order garnishments, national statistical returns and related employment rules. In many jurisdictions in the world that will run to potentially thousands of pages of detailed, heavy, technical information which the payroll specialist will need to absorb and keep up to date.
Because governments change political direction, and nothing stands still in life, one of the key challenges facing our profession is just how we keep on top these changes, additions and repeals to payroll relevant law. It’s just as important to stop following a practice once it has been removed from the statute book as it is to follow new or amended rules. Learning in any job should be viewed as a life-long requirement, and even the most experienced payroll professional will need to plan to keep up to date.
The primary way of achieving this will be through reading – and a lot of it. Let’s do the math, as an example the UK’s Finance Act 2016 had 662 pages of text. If it takes three minutes to read and absorb each page of dry technical language that Act alone will take 33 hours to read. How many jobs in today’s economy allow the luxury of spending a week absorbing this key legislation? We may well rely on bulleted summaries provided by the specialist accounting or payroll training companies, but they will still take time to read, evaluate and produce an accurate synopsis of how this will impact our business.
Continuing Professional Development (CPD) must therefore be one of the primary expectations of anyone working in our profession. Professional payroll bodies such as the APA, CPA, IPASS and CIPP provide an excellent product range of short training courses as well as many formal payroll qualifications. There are also many reputable payroll and HR training companies providing dedicated training to our industry – the very best of which will be governed by external certification arrangements which guarantee the training given meets universally recognized standards. It’s likely that your hiring strategy now actively gives preference to those with formal industry qualifications. But how to keep all of that hard earned (and expensive) knowledge up to date? And what’s it going to cost to do so?
Let’s face it, there is often a struggle in winning funds for external training courses. While the aforementioned can be great options, (which as well as providing knowledge also provide networking opportunities with fellow professionals), the budget will simply not be there on every occasion to facilitate this. But as we’ve noted one of the main pressures to consider is the volume of reading required, and to read one requires time. This is something we can provide without having to compete for funds from the training budget.
Training Development Account
More employers are now recognizing this issue and starting to adopt the concept of a Training Development Account (TDA). The idea of the account is that it makes time available within the normal working week for updating professional knowledge. One idea adopted by a large employer when implementing a pay freeze, was to introduce Training Development Accounts to all employees. This allowed all employees regardless of seniority a commitment to provide up to five days a year of “time” to be used on personal development and training. The idea was launched at the same time as the pay freeze to provide some compensation for the disappointment of seeing salaries stagnate. It was a way of demonstrating that while the company couldn’t offer a salary increase, it did care about the long-term career aspirations of its staff and wanted to offer a material sign that the company still valued the efforts of the workforce.
The idea of a staff budget of time for training purposes needn’t be limited to sugaring the pill when announcing bad news. The tool is an effective one in ensuring that people have the time and space to do all that reading that we have identified. Rather than awarding a total of days, the most effective budgets will award a sum of hours to be spent over a set period.
Divide the budget into key areas for your business linked to each team member role – legislation, software skills, customer service issues, taxpayer education or strategic planning. And where key set piece activities occur on a known date, ensure that a part of the time budget is earmarked to cover this, and set a due by date to ensure any new knowledge is acquired promptly.
A typical budget may well acknowledge that we should all spend at least a week a year updating knowledge and skills. Consider the following example for Lucy, an EMEA Payroll Manager responsible for running multi-country payrolls covering five countries, and awarded a budget of 40 hours:
|TDA Area||Time Allowance|
|Review of annual government budget in five countries||10 hours|
|Social Security||3 hours|
|Software upgrades (2 a year) review||4 hours|
|Monthly Revenue Authority news review||12 hours|
|Taxation review of expatriate employees||3 hours|
|Internal best practice learning||4 hours|
|What's out there review||4 hours|
Time & Freedom
For the system to work well, Lucy must have the time and freedom to undertake the indicative hours of study as part of her normal working day. There should be no sense that this is not “work” – it clearly is and the time set aside for it should be ear-marked as a task that should not be disturbed. Think of the modern office environment today, and how frequently you get interrupted during the working day, often for no good reason. Now think back to school days – we certainly don’t allow a procession of visitors to disturb class there throughout the day!
Of course, that doesn’t mean that Lucy should just disappear for forty hours. It is very important that the time spent learning is documented and that employees be regularly challenged to demonstrate how much time they have spent of their budget, and what they have learned as a result. The recording could allow time to accrue in units of 15 minutes, so that bite size learning can take place if required. One way to ensure that employee’s buy in to this idea is to make an accounting for the time budget part of the annual performance appraisal. Being able to prove an effective use of the budget, and to also demonstrate that the knowledge has been effectively gained and used should be rewarded through an appraisal system. On the other hand, failing to spend the entire budget by putting too little time in to training should be viewed negatively.
Mentorship: The Perfect Blend
As well as empowering people to learn on their own, you should also consider the opportunities for learning from colleagues. Most office teams have a blend of age and experience within them. Learning from more experienced colleagues is one of the best ways of absorbing the culture of a business, and will also ensure that the history of why a task or process is performed. Knowing the background to why something has been done in a certain way can be very useful when the time comes to either drop or change that practice. Having an informal buddy system is great in helping integrate new team members, where they are paired up with an established colleague.
For a more formal approach why not also consider adopting a mentoring strategy? We can all think back over the course of a career and remember key people who gave sound advice and acted as an impartial sounding board for our ideas. The best mentoring arrangements provide the student with expert advice and guidance. The relationship gives the mentee the opportunity to discuss projects or concepts that they are unfamiliar with, to test their ideas and add to their current knowledge levels.
The mentor will critically analyze their work, challenge some of their assumptions and peer-review written work. The relationship between the mentee and mentor should be confidential. Nothing should be reported back to the mentee’s line manager, as it should be used to test and discuss any ideas freely. As well as providing vital help and support to nurture rising talent, the mentoring relationship can also provide a very satisfying career experience for the mentor. Offering to facilitate a formal exchange system to match mentees and mentors will provide an opportunity for those wise payroll heads to pass on valuable knowledge and skills.
As an example of how mentoring can benefit your team, one of the perennial debates of our industry is the placing of the payroll department within an organization – is it an HR function or does it sit within Finance? A mentor with years of experience in the profession has probably witnessed the department change placement more than once. They can talk knowledgeably about the impact of the changes in the past and provide perspective to a mentee who is contemplating introducing a move.
Finally, don’t forget the power of the “Donut Friday” approach. Having a regular networking event, timed to coincide with a natural break in the working day is a cheap and effective way to share knowledge within a department. You could incorporate an element of “Show and Tell” into the proceedings. One idea is to share the responsibility for monitoring the regular news feed from the relevant tax authorities as part of the budget of updating time across the team, and as the team munch on Donuts/Scones/healthy fruit the designated team member for that week gives a short summary of the latest news.
Further payroll process automation and the introduction of intelligent robotics signals that we could be in for a wave of job losses within the profession over the next decade. But history also teaches us that the introduction of modern technology often leads to the creation of jobs that we simply don’t anticipate today. One thing is clear – those jobs will require employees to have excellent technical industry knowledge, and you can help prepare your team for the big changes ahead now by committing more time for training. It needn’t cost the earth as we have demonstrated, and will contribute to improving employee engagement in the workplace. A win-win for everyone!