For mid-size companies, it's especially important to have a succession plan in your payroll department to avoid lapses in business operations.
In many companies, succession planning only focuses on the C-suite. But it’s important to consider succession within payroll as well.
For mid-size companies, a single departure can disrupt pay continuity, compliance, and employee trust. Building a talent pipeline before you think you need it should be part of every business leader’s strategy.
Why payroll succession planning matters
In mid-size companies, payroll is often handled by a small, specialised team with little to no slack for unexpected staffing events. Succession plans aren’t just about emergencies—they also help you spot rising talent, diversify your team, and provide career progression, which improves retention.
If your team struggles when a payroll associate goes on medical leave or on annual leave, that’s a sign that your coverage is too thin. What is your plan if an employee moves on to another company? Are any retirements on the horizon?
The cost of replacing an employee, which can be more than half of their annual salary, isn’t the only risk. Disrupted payroll coverage can cause late payments, incur compliance fines and hurt the company’s reputation.
Payroll leaders need to consider worst case scenarios and future staffing needs before those events ever happen. Developing a clear succession plan, and keeping an eye on recruitment and retention, ensures stability of payroll and protects the company.
Building a payroll talent pipeline
A payroll leader should review key skills and responsibilities for current and future payroll roles on an ongoing basis, noting any gaps or opportunities for advancement.
You should create development plans for all junior payroll team members—building talent within the company is great for morale. Offering to pay for continuing education or payroll qualifications builds skills and fosters loyalty. Building relationships with local business education providers can also be a fruitful way to hire entry-level payroll associates.
Building a network of qualified payroll specialists on LinkedIn can help you fill a position quickly. When you go through the hiring process, it can be smart to connect with people who didn’t make the final cut to follow their career development and stay in touch. Likewise, LinkedIn groups aimed at payroll professionals are a great place to ask for referrals.
Consider engaging a contractor to help cover gaps on the payroll team. As part of its global payroll offering, activpayroll provide interim staffing support for businesses looking to fill a key business function in payroll.
Payroll continuity as an ongoing strategy
Your payroll succession plan should align with overall HR planning and business continuity plans. These living documents should be regularly reviewed and updated, with service providers and IT teams involved in troubleshooting.
Don’t forget to include scenario planning in your continuity strategy. As a payroll leader, you should continuously consider how changes in payroll legislation, technology, or company structure could affect your staffing needs.
Involving leadership early in the planning stages can help bring to the forefront the importance and complexity of ensuring payroll continuity. Payroll tends to run silently in the background until there’s a hiccup that everyone notices. A little foresight now can prevent a lot of headaches later.