Human Resources Vs Payroll: Where The Two Functions Overlap

Posted by: KHTS Articles in News Articles November 19, 2021 - 9:00 am 0 1,706 Views

While human resources take care of employee relations, payroll deals with compensating employees. Both departments play their distinct roles in an organization, but they also share functions that are necessary to the success of any business, such as timekeeping.

What’s the Function of Human Resources?

Human resources handle the human side of the business by managing people and bringing the best out of them. The main responsibility of HR is to hire new employees, which involves attracting, interviewing, training, and developing prospective hires into more fullied workers.

After onboarding employees, their roles switch to that of a cheerleader. They help motivate employees, listen to their concerns, and coach them through the employer’s policies. HR also handles compensation packages, which can include bonuses, salary increments, and holidays. Utilizing effective payroll systems list can significantly streamline the process of managing compensation and ensure accurate payments to employees.

What’s the Function of Payroll?

Payroll ensures that employees are paid on time in the correct amount. Their primary function involves reconciling and balancing payroll data and reporting and depositing taxes. Without payroll, businesses would have a difficult time understanding what they owe to the IRS.

The whole organization depends on payroll to take care of wage deductions, verifying the reliability data regarding pay, and record-keeping. Besides delivering paychecks, they help maintain compliance for the company with federal tax laws and employment paperwork.

Where HR and Payroll Overlap

HR and payroll departments often come together to exchange information, whether it’s by using a payroll register to discuss employee raises or collaborating to discuss pay for training.

Human resources and payroll must collaborate with each other to complete specific tasks. Some of the most common shared functions include bonus payments, timekeeping, salary increases, recruitment, firing or lay-offs, benefits deductions, and vacation leaves.

HR and payroll are privy to confidential information, such as employee data, social security numbers, home addresses, and finances. Since everything passes through HR first, they have to deliver the information they receive quickly, so payroll can conduct their duties.

At the same time, both departments need to work together to ensure sensitive information doesn’t fall into the wrong hands, making them the first and last line of defense for companies.

4 Key Ways to Better the HR/Payroll Relationship

Although HR and payroll benefit from each other, both departments can suffer when they become unaware of their goals. Here’s how HR and payroll can come together seamlessly.

1. Define Role Scope and Separation

At some organizations, HR and payroll often work separately. However, both departments need a clear understanding of how each of their roles cooperates with each other. Create a process map that outlines how these departments should interact and what to do if there’s a problem.

2. Setting Data Expectations

Human resources collect employee data, which is then fed to payroll. At the same time, payroll can provide insight to HR for the company’s benefit, like pay equity. Both departments should establish a set of data standards to streamline auditing and reduce collection errors.

3. Sharing Key Performance Indicators (KPIs)

While it’s true both departments have different frontline goals, in the end, their objective is the same: to optimize the employee experience. One way to do this is by sharing KPIs. For example, HR can fix payroll errors by expressing the importance of proper timekeeping.

4. Using One Solution for Both HR and Payroll

To avoid silos in your company, create one solution for both departments instead of separate management protocols. You can’t strengthen the partnership between HR and payroll without identifying an end solution that handles both departments under one technological solution.

Human resources and payroll collaboration isn’t just beneficial to the operations of your company; it’s actually essential. To create a more accurate, efficient process that minimizes administrative efforts, build a strong partnership between both departments.