Lessons not learned from payroll shared services mishaps

by Stephanie Zillman23 Apr 2012

The Ambulance Employees Association is the latest organisation to voice their frustration at continued payroll errors, and has threatened industrial action unless the faults are quickly rectified.

Ambulance officers were paid a day late last week because of a problem in the South Australian Government's shared services unit. According to union official Phil Palmer, pay mishaps have been a weekly occurrence since the South Australian government switched to the system of shared services in 2009. “It's widespread and it's significant and it's disadvantaging people. To say they're annoyed about it would probably be an understatement,” Palmer said.

SA Finance Minister Michael O'Brien responded to the claims and said he will ensure the process gets back on track. “If the resourcing is inadequate, [then] we find additional resourcing,” he said.

Typically human error is the cause of the majority of payroll mishaps, but the added pressure created by scaling down payroll departments may be increasing the scope for error. “We’re finding that people [in payroll] are being asked on a regular basis to pick up other roles,” Craig Osborne of Sage MicrOpay said. When people in the payroll area aren’t sufficiently focused or skilled, the situation is ripe for costly mistakes to occur, Osborne added.

Most payroll mistakes generally occur as a result of:

  • a lack of understanding of the correct awards, allowances and employment conditions
  • too many tasks being added to payroll responsibilities
  • administrative errors – both entering information incorrectly and/or being given incorrect information

While there are a range of factors that can create problems, payroll software cannot be completely ‘idiot proof’, and payroll teams must be given the right tools to do their job, including adequate training and support. “At the moment many businesses may have more pressing priorities, and it becomes more that they react [to problems], rather than they plan to avoid them,” Osborne commented.

HR’s role in minimising the risk

If handled internally, HR needs to keep right on top of the payroll software used, assess whether it’s reliable, up-to-date and efficient, and whether newer products that can remove more human error risk factors are available.

Additionally HR should:

  • provide adequate training and administrative support wherever possible
  • focus on the talent pipeline: payroll requires specialist knowledge, and succession planning is vital
  • promote awareness of departmental workloads


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