Advice

Fixer: Should I be held to account for my spending?

21 Feb 2019 By PM Editorial

I'm worried that running our payroll as profit and loss will force me to get rid of people

Our CEO thinks it would be a good idea for HR to take on the payroll as a profit and loss (P&L) account. It means I would have to show how investment in different HR programmes provided financial benefit to the business. I see the upside of being given this responsibility but I am worried it will also mean I will be under pressure to cut costs by getting rid of people whenever possible. I also don’t believe this is normal practice. Should I push back or embrace the opportunity?

It isn’t necessarily a ‘normal’ idea, but I have heard of it happening – and if I were you, I’d be looking at this as an opportunity. What you’re being offered is a great way to start delivering advanced people analytics that offer huge value to the business, and to increase your own standing into the bargain. 

I don’t know exactly how your CEO proposes the P&L aspects of this will work, but it certainly doesn’t have to be about cutting staff. And what I do know is that when you see how people interact with payroll, you start uncovering all sort of fascinating insights.

For example, do certain parts of the business regularly have to resubmit their payroll figures? When you start to analyse it, you’ll often find it’s an early warning sign of underlying underperformance. Or perhaps there are pay discrepancies among high performers that point to retention or capability issues in certain areas?

There are quick wins if you are looking to cut costs, by taking a proper overview of how many systems you are running and how they work together. And a dedicated analytics function can show you how to redeploy staff and structure the organisation more efficiently without necessarily reducing headcount.

Most of all, however, if you do push back on the opportunity, you’re going to raise questions about HR’s ambition and risk looking defensive. Establish exactly what you’re getting into and how success will be measured, then go for it. 

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