In one of Singapore’s MNCs many years back, I remembered the MD saying that the payroll executive position suffers from high attrition – reason being the job was so stressful that the payroll exec would quit rather than to face another month of payroll processing (especially the delays that will raise howls within the employees).

There are many options to alleviate the pain of payroll processing.

Step 1: Get an affordable Payroll Software

While very much a moot point, the emphasis is on Total Cost of Ownership (TCO) rather than just upfront costs. TCO involves annual maintenance, actual data entry and actual payroll processing time. Besides the software R&D, we place emphasis on post-sale support, offering email/phone/updates to our clients. We note however, some SMEs desire to change payroll software every 2 or 3 years. The desire to change however, is due to a new payroll officer who would rather use his most preferred software over the current software.

Step 2: Decide if you want to outsource or insource?

While insourcing is relatively new to the payroll world – after all, payroll is confidential and a touchy subject; getting your software vendor as a hired gun to run/process payroll at the critical part of the month, is a smart way to allay stress for your payroll exec. Payroll outsource has been going on for a long time, your part-time accountant is one example of outsourced payroll. Some SMEs decide to rein in the outsourcer because of inflexibility and perceived control issues. (Take note we are not taking sides in this argument).

Step 3: Decide if you want all your subsidiaries to use the same payroll software

What this means is really cost-saving; instead of buying several types of softwares, or several licenses of the same software; just buy one software that caters to holding companies and subsidiaries. Besides the benefit of applying last minute CPF and IRAS changes across the board, your additional benefit are personnel details – your staff can easily transfer from company A to company B while retaining their employment history.

Step 4: Cloud or not cloud?

Why not outsource the entire IT infrastructure? Most SMEs may not have a dedicated IT person, especially for the server range. Why not engage your friendly neighbourhood IT vendor to host the payroll software and payroll data? Our studies show that 98% of SMEs have severe reservations about placing payroll information on the cloud (companies fear leakage of salary info will cause anarchy - employees comparing salaries among peers). Being SMEs, using VPN is not an option either (too much IT to worry about). I guess we have to wait out the cloud war or until the government enacts relevant incentives to boost take-up rate.  

Step 5: To HR or to not HR?

What this means cryptically is – since you have personnel data and payroll data, do you want to extend the software to include management of annual leave (and other assorted leaves)? Or do you want to extend to management of claims (transport, expense, medical, etc.)? Which are usually reimbursed through salaries. Or you can extend the software to esoteric HRMS-type of functions, such as Training Management (which course they went to, how much it cost, etc.), or Performance Appraisal. Or is this too much for SMEs? Perhaps we should just stop at payroll?

Contributed by Foo Chi Hian, Sales & Marketing Manager, Creative Software.