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Payroll and HR Interaction

To ensure they can comply with their duties, we recommend employers consider in good time:
  • Their HR position (e.g. employment & non-employee contracts, employee data accuracy, employee benefits policies, new joiner processes, staff communications, etc); 
  • Any Pensions issues (e.g. impact on existing pensions arrangements & their members, whether to use an existing scheme or is there a requirement for a new scheme for automatic enrolment, etc); 
  • Any Payroll issues (e.g. different payroll systems, pay cycles, payroll cut-offs, payroll data accuracy, refunds, contribution calculations, processes which span tax years, etc); 
  • Potential Information Technology (IT) issues: (e.g. reliability & networking issues, data standards to allow different software/systems to work together, possible upgrades in hardware and/or software, security etc); 
  • Possible Procurement issues: (e.g. any plans to buy new or upgrade current IT systems/software or pensions schemes or upgrade/change existing systems/software, etc); 
  • The Financial issues: (e.g. forecasting and budgeting for any impact on costs associated with additional pension contributions, setting up and managing the auto enrolment process etc).
Employers should make sure they involve the right people in their own organisation, their professional advisers (accountant, financial adviser, external HR, payroll bureau etc) and in all their suppliers (or potential suppliers).

It is inevitable that in practice, employers will almost certainly need to employ some software automation to support and manage their auto enrolment environment. For larger employers, this may be kept in house within their own IT department, but for the vast majority of small to medium enterprises (SME’s) selecting an ‘out of the box’ solution from a proprietary supplier is perhaps the more viable option.

Therefore, all employers regardless of size or budget should first ask of themselves the following questions:
    • Do you intend to use payroll software to assess your workers?
    • Can your payroll provider provide this assessment on your product & version?
    • Or would you need to upgrade your payroll system to do this?
    • Or, are you going to appoint another supplier to carry out the assessments (e.g. pension scheme provider or other non-payroll / middleware provider)? Will all of the software do what it needs to do?
    • How will all the staff communications be managed, prepared and dispatched (e.g. instead of paper can an electronic solution provide accurate and speedy output perhaps via ‘mail merge’ software tools, email, the internet)?
    • If additional software is required, is this installed onto internal systems (if so, can existing IT / computer systems cope) or if accessed via a web based portal, is it secure and reliable?
    • Where is data stored (e.g. on an integrated HR/payroll system or separately)?
    • How accurate and up to date is the employers employee data (e.g. NI, address, etc)? How will these systems work together – what data standards do they support?
    • Talk to your existing providers and any possible new suppliers about this, well in advance of your staging date.
The TPR have been most useful in this area and have published a Planning Timeline. Follow this link to access this, then give some thought to your own situation.