Linq HR
Human Resources Career and Vendor Selection

The Top 5 items to Consider before Moving to a Cloud-based Payroll

16.02.21 02:54 PM By Linq HR

The need for digital transformation inside organisations is more important than ever and Human Resources Departments and Managers are facing new challenges to scale up their support function efficiencies. 


Managing Payroll is a crucial part of Human Resources or Finance, and traditional methods of managing it are no longer enough. Organisations are seeking automated processes, less human errors, and more employee focused solutions that work across their entire organisation.


Many cloud-based Payroll solutions (Payroll SaaS) are available today, proposing a range of services to small and large organisations. Migrating from your local Payroll system to a SaaS solution needs careful preparation for it to be smooth and reduce impact on your business activities. 


To help you choose the best solution fitting your business needs, we have listed the 5 Top items to consider before moving to a cloud-based Payroll solution. 


1. Personal data security

The first thing to consider is data security. Payroll contains highly sensitive information for business as well as employee's personal data. With the implementation of GDPR12 across Europe, organisations, even if not based in Europe, will most likely have to make sure that their solutions are GDPR compliant. For example: in Australia, the Privacy Act34, which matches closely GDPR will guide you through the requirements that your Payroll solution must meet.


Data encryption5 is also an important feature to be considered in cloud-based Payroll systems.  By nowadays standard, all online services propose encrypted data transfer through SSL/TLS  certificates. However, having a solution that encrypts sensitive data at rest (data that are stored) is a great advantage and might as well be mandatory depending on your local legislation.


2. Business size

As there are many cloud-based Payroll solutions available in the market, identifying the one which matches your business's size is key for a cost-optimised solution. For example, small businesses under 50 employees might find a solution that charges on a per employee basis to be more cost effective.


3. Integration

Having a cloud based payroll system that integrates to your actual HR systems is important to consider. For that to be possible, make sure the Payroll SaaS proposes API6 (Application Programming Interface) . The API will allow your team to interconnect your HR Software to the Payroll SaaS, allowing automated transactions and data flow updates. This section should be discussed with your IT teams or a systems expert so  they can analyse the feasibility of integration and estimate all associated costs.


4. Multi-currency support

For regional or global organisations, having a cloud-based Payroll system supporting multi-currency7 is crucial. It will help you with tax management, understanding labour costs, and international pay slips. 


5. Data import, backup and restoration

If you already have a local Payroll system, migrating to the cloud will require moving or reinputting data on the new system. Having a Payroll SaaS that allows import of existing data will be a time-saver and cost-effective solution, especially for  organisations with large numbers of employees. Dealing with a high volume of sensitive and critical data, having a cloud-based Payroll system with a backup and restoration system is highly recommended. Even though Payroll SaaS help automate and reduce errors, you might still encounter human errors while inputting or manipulating data.  Doing regular backups - which can be automated in some systems - will help you deal with the errors mentioned above and maintain confidence and credibility in the payroll system.


Conclusion

Combining the above items, you should now be a step closer to finding a cloud-based Payroll solution fitting your business needs while taking into account several technical aspects for your HR digital transformation. Remember to check each and every employees data within the new SaaS solution before going live.


References
https://en.wikipedia.org/wiki/General_Data_Protection_Regulation

https://gdpr.report/news/2017/11/08/hr-payroll-five-steps-gdpr-compliance/

https://www.oaic.gov.au/privacy/the-privacy-act/

https://www.termsfeed.com/blog/gdpr-vs-australian-privacy-principles/

https://gdpr-info.eu/issues/encryption/

https://www.getapp.com/hr-employee-management-software/payroll/f/api/

https://www.getapp.com/hr-employee-management-software/a/xcd/