Managing gender transition in the workplace

Managing gender transition in the workplace: Creating an enabling environment to mitigate the risk of discrimination and harassment

Even though the South African constitution is regarded as one of the most progressive in the world, LGBTQI (lesbian, gay, bisexual, questioning, and intersex) employees continue to experience discrimination and harassment. Ian McAlister, General Manager of CRS Technologies, examines how an organisation can create an enabling environment to mitigate the risk of this happening.

“Globally, there is increasing awareness around LGBTQI issues. Unfortunately, when discussions focus on the workplace, things take a decidedly muted turn. Despite the protection afforded by the constitution, those in the LGBTQI community continue to be passed over for promotion, have their work duties limited to avoid any client-facing engagements, and are openly ridiculed by their colleagues,” says McAlister.

A lack of understanding or acceptance from colleagues could result in negative changes

The issues become more complex when companies have transgender employees who either just ‘came out’ or are in the process of making a transition. For example, what must be done if a transitioning male employee wants to use the female bathroom? Many of the female employees might object, leaving the person in a difficult position.

While disclosure reduces the stress of hiding one’s gender identity and enables the employee to develop more genuine relationships with colleagues, clients, and superiors, there are some risks associated with this.

A lack of understanding or acceptance from colleagues could result in negative changes in self-confidence. Relationships in the office could become tense and the employee may even become the focus of office gossip. Additionally, transphobia, harassment, discrimination, violence, and dismissals continue to take place, even though all are illegal.

“If an organisation wants to build a more inclusive environment, there are certain aspects to be mindful of when it comes to LGBTQI employees,” says McAlister. “These steps are designed to protect all employees and create a more enabling culture inside the business which will result in a more productive and effective organisation.”

Business has a responsibility to ensure that workplaces are safe and supportive

Fundamentally, every business has a responsibility to ensure that workplaces are safe and supportive of LGBTQI employees. When it comes to developing policies and procedures, adopting LGBTQI inclusion as an overriding principle is a good start, but is just one part of the process.

Companies must assess their existing level of inclusion, review current policies and disciplinary processes for those discriminating against others, and evaluate any gaps between the polices and what is practised inside the organisation.

“Respecting the privacy of employees, regardless of their sexual orientation, should be a guiding principle. Additionally, the policies focused on inclusivity (when it comes to bathroom use and dress codes) should be published on the corporate intranet and at strategic locations around the office. In this way, people can educate themselves and become more aware of the complexities of the issues at hand.”

Furthermore, employers can identify potential activities that can bring staff together for discussions around these policies and procedures. This could be used as instructional sessions that are focused on building a culture of inclusivity.

“The modern work environment is definitely a more empowering one than in the past. However, ongoing education and communication must be key drivers to ensure all employees are adequately taken care of. When people start feeling misunderstood or uncomfortable in the workplace because of their gender, this must be addressed immediately to avoid any negative impact on the people and ultimately, the business,” McAlister concludes.

Watch the webinar here:  https://youtu.be/lzz8WI8GAI0

Ghost employees could cost you your business

Payroll fraud: he occurrence of Ghost employees could cost you your business

The occurrence of ghost employees on a company’s payroll system ranks as the most difficult type of payroll fraud to detect, particularly in larger companies where no proper controls exist. Over time, this can pose a serious threat to the organisation’s profitability and sustainability, declares CRS Technologies general manager Ian McAlister.

“A ghost employee is a fictitious person on the company payroll who does not actually work for the organisation,” he explains. “It could be someone who left the company or passed away, or even a fictitious person with a fake ID number but valid bank account into which a salary is paid each month. The holder of the bank account is usually the perpetrator of the ghost employee fraud.

“Another example is when a real employee appears twice on the payroll. This is done by using a different ID number to create a clone of someone. The employee’s salary is then split between the two identities but only one identity receives a tax certificate, enabling the perpetrator to declare less than what he/she actually earns to the tax collecting authority.”

Automated payroll solution that will reduce opportunities for creating ghost employees

It goes without saying that failure to detect ghost employees can result in considerable financial loss over time. Consequently, McAlister says companies should seriously consider implementing a robust automated payroll solution that will reduce opportunities for creating ghost employees.

“The payroll solution should feature ID number verification so that if someone tries to enter a ghost employee on the system, it will immediately reject the ID number as invalid. The CRS solution, for example, incorporates ID numbers which are attached to each employee. Each number is unique and cannot be duplicated. This means that an employee cannot appear twice on the same system.”

Audit and risk management policies that facilitate the development of controls to aid in the prevention and detection of any type of payroll fraud are also extremely important, McAlister continues. He recommends carrying out audits at least once a quarter to ensure that the number of employees on the payroll actually exist and equal the number of people employed.

“Perform frequent spot audits to check that employees’ earnings, allowances and other remuneration additions are correct and in accordance with their employment contracts.  Any changes to an employee’s earnings must be approved by a senior manager and not the payroll administrator. If possible, a multiple-party approval process should be followed to mitigate collusion. It is also advisable to run comparison reports between various payroll periods. Any  variance of more than a predefined percentage occurs should raise a red flag.”

All the perpetrator has to do is sit back and collect the payments

McAlister points out that ghost employee fraud does not have to be perpetrated by the person who controls the entire payroll system. “Mostly it is done by the individual who authorises payroll payments or controls the addition or deletion of employees from the system. Once the ghost is created, payments are generated to the ghost without the need for additional action or review by the payroll team. All the perpetrator has to do is sit back and collect the payments.

“This being said, an indication that some type of payroll fraud is being committed could be when the payroll manager or administrator always arrives early and leaves late, and never goes on holiday or takes sick leave. Being away from the office will force them to give their work over to someone else, who may discover their crime.”

For businesses that cannot afford the luxury of an internal audit department, McAlister recommends entrusting their payroll to a third-party professional. “CRS’s outsourced payroll services includes multiple levels of accountability where different people manage different payroll duties. Fraudulent activity is further prevented by rigorous internal controls.”

Payroll is often a business’s biggest expense. Organisations need to understand the potential devastation ghost employees and other types of payroll fraud can cause and take the necessary steps to safeguard against it,” McAlister concludes.

Company Culture trumps technology

Technology has made our lives easier, but still company culture trumps technology

There is no arguing the fact that technology has made our lives easier. It has also resulted in organisations being able to deliver more innovative solutions in the workplace to provide for a more compelling environment. Nicol Myburgh, Head of the HR Business Unit at CRS Technologies, cautions that this should not happen to the detriment of the company culture.

Technology in the workplace can create many temptations among employees. Social media is a perfect example where employees spend most of their time on their favourite networking platforms instead of working. Even more concerning is how prevalent viewing pornographic material has become in the workplace,” he says.

Myburgh believes there is a growing trend among companies to focus on technology innovation and neglect the human element.

“This is happening more today than ever before and can be partly ascribed to an increasingly intensive and regulated labour environment. Employers want to move away from staff and acquire tech-driven solutions to replace people, all in a move to alleviate having to deal with issues created by unions, employee complaints, and poor performance.”

Local examples are plentiful, but it is especially in the banking sector where this becomes apparent as leading banks look to close branches in favour of investments in digital banking solutions. It all comes down to the bottom-line – technology is cheaper to maintain than the people driving it.

Return to culture

So, how can companies still reinforce their culture without relying on technology, tools and mobile apps?

“It must always be remembered that the company culture is the personality of a company and is determined by the people who work there,” says Myburgh.

“Without it, a business cannot be expected to have employee engagement and growth potential. Moreover, management needs to be aware of how technological innovation has impacted on changes taking place in the company culture. Much of this revolves around the way people do things. For example, the office hours of a traditional business used to be from 08:00 to 17:00 but embracing a mobile workforce has resulted in more people working off site, thereby fundamentally changing the culture of the organisation.”

Technology does provide benefits and opportunities, but it should always be driven by putting the people first. Staff events and team-building activities are excellent ways to promote interaction and reinforce the company culture.

Maintaining focus

Technology and applications are just tools – a means to an end. Organisations can do more to ensure their focus remains people-centric.

“This is where company culture comes in. It revolves around making the environment a pleasant place in which to work. The technological tools merely facilitate companies being geared towards their people. Some individuals want to interact with their colleagues face-to-face, while others prefer to use an app. It all depends on the person’s perception of what it means to be people-focused. Technology can therefore be used to give voice to the individual needs of employees instead of simply being a one-size-fits-all approach,” Myburgh concludes.

Nicol Myburgh

Nicol Myburgh, Head of the HR Business Unit at CRS Technologies

Retrenchments not an opportunity to eliminate dead wood – avoid these retrenchment mistakes

With the unemployment rate of economically active South Africans reaching 27.6% in the first quarter of this year and media reports filled with job cuts across industry sectors, companies need to be cognisant of any potential retrenchment mistakes to avoid, says Nicol Myburgh, Head of the HR Business Unit at CRS Technologies.

“It is interesting to note that the word retrenchment has no legal definition in the country. The process is documented in Section 189 of the Labour Relations Act and is consequently referred to as a Section 189 dismissal or operational requirement dismissal.

Process to get rid of non-performing or ‘problem’ employees

According to Myburgh, employees can be dismissed for misconduct, incapacity (either medical or poor performance), or operational requirements (retrenchment). Each one of these follows a vastly different procedure.

In the case of retrenchment, many employers use this process to get rid of non-performing or so-called ‘problem’ employees. Often, they do not even appropriately consult with the individuals they plan to retrench.

“There is a difference between consulting with and telling people they will be retrenched,” Myburgh explains. “The former is a discussion that intends to reach consensus to deliver value for both parties. While not quite a negotiation, it comes close to it. This involves discussing in good faith the process, selection method, financial factors, termination, and so on with the affected employee.”

But what can be considered a fair retrenchment selection method?

The LIFO (last in, first out) principle is the most objective and involves choosing shorter serving employees for retrenchment before their longer serving colleagues, says Myburgh. “Another method is to create criteria for the selection, assign values to each one, measure staff accordingly and dismiss everyone who fails to meet the criteria. Of course, the problem with this process is that it is possible for employers to manipulate the criteria so that they can get rid of ‘problem’ employees. If this is raised, the onus is on the employer to prove this is not so.”

“Businesses must always keep in mind that retrenchment is not about the people but rather the positions. If the correct procedure is not followed, especially when unions are involved, it can cost organisations significantly more money in the long term.”

Discussing packages

When it comes to structuring retrenchment packages, decision-makers need to understand the human element and not blindly look at the numbers.

To this end, the legal minimum requirement for a retrenchment package is one week’s salary for every completed year of service. The Act is silent on partial years worked, but some companies pay out pro-rata for the partial year, while others completely disregard it. It is up to the employer to decide what it wants to do in this regard.

“On a more positive note, employers can consider offering voluntary retrenchment packages,” Myburgh points out. “Typically, these are usually higher than the legal minimum requirement and employees can choose to accept or reject the retrenchment offer. This can serve to smooth the retrenchment process which is often fraught with emotion, especially on the part of the employee being retrenched.”

Regardless of the process followed, retrenchments can have a negative impact on the staff who remain.

“Once retrenchments start, the trust employees have in the business is broken. Management must therefore be completely transparent regarding the future of the company, its structure and financial well-being. Employees should be constantly reassured about their future with the organisation,” he concludes.

Never underestimate the dangers of burnout

Why employers should never underestimate the dangers of burnout

Burnout is now officially recognised by the World Health Organisation (WHO) as a clinical syndrome, legitimising the physical and mental impact that overwork can have on employees. Nicol Myburgh, Head of the HR Business Unit at CRS Technologies, believes that companies should familiarise themselves with the symptoms of burnout to minimise the potential impact on employees and the business.

“In the fast-paced corporate environment, employees feel they must keep up or risk being overlooked for promotion or a salary increase. Even artisans are under immense pressure due to long hours, demanding customers, and the constant battle to make ends meet,” he says.

Adding further impetus to concerns around burnout is the fact that digital transformation is resulting in jobs becoming more specialised. This is putting even more pressure on people to get their work done as effectively as possible. And in South Africa, with retrenchments a constant fear in the current uncertain economic climate, employees are expected to take on more responsibilities with fewer human resources on hand.

Symptoms

According to WHO, burnout is characterised by three dimensions:

  • Feelings of energy depletion or exhaustion;
  • Increased mental distance from one’s job, or feelings of negativism or cynicism related to one’s job;
  • Reduced professional efficacy.

Burnout is the result of chronic workplace stress that is not successfully managed. Despite the recent classification, it is by no means a new phenomenon and people have been struggling to deal with it for as long as they have had jobs. However, thanks to the connected generation, the issues surrounding this clinical syndrome are now out in the open and decision makers can no longer ignore it.

Education vital

“Despite this, few industries take burnout seriously,” says Myburgh. “Often, it is only if a job relates directly to a person’s safety that managers treat burnout with the respect it deserves. In the corporate environment, employees are typically squeezed until every ounce of their energy is depleted.”

Consequently, education is critical.

“This can involve researching the impact burnout has on the business, running workshops and acknowledging the fact that it is a legitimate problem. People who suffer from burnout should never be told to ‘get over it’ or ‘snap out of it’. Instead, it needs to be managed properly and with consideration for the sufferer.”

Burnout can be viewed as a precursor to depression and if not taken seriously, can lead to other mental health issues that can also negatively impact performance at work.

Minimise burnout

There are several steps employers can take to minimise the risk of their staff suffering from burnout. This includes the obvious step to stop overworking them. Additionally, identify the signs before it is too late, be observant when managers engage with people, and offer counselling if required.

Employees can also do their bit to prevent themselves from burning out.

“People must feel that they are in an environment where it is safe to talk about the feelings they are experiencing,” says Myburgh. “They must be able to have a discussion with their line managers if they are feeling overworked or unable to cope with the demands of their jobs.

“People must also learn to maintain a better work life balance. Yes, the temptation to work from anywhere is there, but this can turn a nine-to-five job into a 24×7 position, which can lead to burnout. Participating in relaxing activities away from the workplace is vital and in extreme cases, burnout sufferers should consider removing themselves from the situation causing the burnout, if this is possible.

“These are difficult times for employees and employers alike. Competitiveness is at an all-time high, resulting in an ongoing pressure to constantly perform at optimum levels. But if the signs of burnout are not heeded, burnout could become seriously detrimental to employees’ general health and wellbeing,” Myburgh concludes.

Tax advisory service now available to CRS clients thanks to Tax Debt Compliance partnership

Gerhard LindeCRS Technologies has partnered with Tax Debt Compliance to bring a tax advisory service to its HR and payroll clients.

In the current economic climate many cash-strapped businesses find themselves unable to pay their outstanding tax debt to SARS. Some try to put the problem on hold by not submitting a tax return but, says Tax Debt Compliance director and tax debt negotiation specialist Gerhard Linde, not only are the penalties for this severe and the interest really high, it’s also illegal.

Pay the tax debt in instalments over an agreed period

Enter Tax Debt Compliance and its range of tax relief mechanisms. “We assess the businesses cash flow and make a deferment application to SARS on the owners’ behalf, on the terms they can afford,” Linde explains. “If approved, the deferment will enable the business to pay the tax debt in instalments over an agreed period.

“Alternatively, we will assess the situation and present SARS with an accurate representation of the business in the form of a compromise application. If approved, this will allow the business to settle the debt at a reduced amount.”

While Tax Debt Compliance cannot make any guarantees regarding terms and amounts agreed to with SARS, Linde gives the assurance that he and his team will always negotiate for the best terms. “We go out of our way to understand the business needs so that we can plan and execute strategies that are mutually beneficial both to the business and SARS.”

Ensuring compliance with South African tax legislation

Other services offered by Tax Debt Compliance to CRS clients include the performance of tax due diligences and the formulation of tax opinion letters.

“We conduct a tax health check on the business operations to identify any existing tax pitfalls, with a view to ensuring compliance with South African tax legislation.

“Additionally, we prepare tax opinion letters for businesses considering entering into complex transactions that could hold significant tax consequences. The purpose of the opinion letter is to point out the tax risks involved in the proposed transaction and give guidance on a particular direction to take.

New tax advisory service to our clients

“We are extremely excited to offer this new tax advisory service to our clients,” says CRS Technologies general manager Ian McAlister. “The team at Tax Debt Compliance have many years of experience in this field and to date boasts a 100 per cent success rate in which it has helped numerous clients to retain their assets and maintain their business operations.

“Business owners can now focus on running their business with the peace of mind that their tax issues are in the capable hands of Tax Debt Compliance.”

For more information, go to: CRS Tax Advisory Services by clicking here

 

CRS system offers risk-free talent administration with new employee engagement solution called Engage

Leading HR and human capital management specialist CRS Technologies has rolled out a new employee engagement solution, aptly named Engage, which offers risk-free talent administration and enables businesses to cultivate a rich, vibrant and interactive environment to inspire staff.

CRS Technologies maintains that in the digital economy and modern workplace, employee engagement is essential to boost productivity, reduce staff churn, improve customer satisfaction and enrich the company culture.

Citing Gallup research, which shows that only 15% of employees globally are engaged with their jobs, Ian McAlister, General Manager of CRS Technologies, says employee apathy is hurting business, and issues like the lack of recognition, little organisational transparency and a divide between senior management and the rest of staff represent ongoing challenges.

Risk-free talent administration

McAlister says risk-free talent administration, or that which enables the business to easily report and automatically reassess and reposition the HR function (with no risk to operations), has become the hallmark of progressive HR management and synonymous with advancing technically aware human capital management processing.

He adds, “It’s also about leveraging continuous and collaborative conversations with employees around shorter-term goals and identifying and resolving barriers to achieving goals, rather than simply ticking boxes about what makes a good employee. There is something to be said for organisations that are prepared to listen to their employees, relate to them, and develop strategic interventions that make them feel like an integral part of the business.”

McAlister continues: “Pioneering organisations are increasingly challenging the conventional role of performance management in the employee engagement space and seeking alternatives that serve to better inspire employees. It’s about turning the traditional staff appraisal on its head and coming up with more innovative ways of measuring performance. This is also where initiatives like employee wellness come in.”

To boost this wellness factor in the business and help companies encourage more ‘engaged’ staff, CRS Technologies has developed and introduced Engage to offer risk-free talent administration and management.

Engage solution incorporates several features

Engage incorporates several features designed to enhance this engagement, including strategic alignment of every employee, a central role library, dynamic grouping (outcomes across silos), flexible outcome measurements and dynamic reporting.

CRS Technologies says the advanced solution connects each employee’s job outcomes to the enterprise strategy drivers, and shares the impact of employees’ contribution on teams and the enterprise visually with every employee/team.

Enabling employees to contribute outcomes

Moreover, outcomes are assigned to roles managed from a central role library, and these roles are connected to employees. If roles are shared to a public library, these can be accessed by participating firms, and any outcomes from any role can be glued to any team (thus enabling employees to contribute outcomes to any grouping across silos).

The dynamic reporting feature means that reports can be easily configured to connect any outcome from any employee to any leader for any period.

For more information, contact us by clicking here

CRS migrating your hr and payroll processes to the cloud
Future of payroll and the cloud

While the cloud is fundamentally changing how organisations use data, when it comes to sensitive information such as HR and payroll, caution needs to be applied, this according to Ian McAlister, General Manager of HR (human resources) and payroll specialists CRS Technologies South Africa.

In 2018 Facebook suffered a breach that exposed the data of at least 50 million user accounts. Given the strict privacy laws of Europe, the company is facing fines of as much as $1.63 billion. Examples such as this and the Liberty Life breach in South Africa last year, where hackers gained access to the personal records of millions of clients, do little to assuage concerns that the cloud, for all its benefits, still has significant risks attached to it.

HR to IT spend needs to be managed

“Yes, the much-touted cost benefits of going the cloud route is not something to ignore. With corporate budgets under pressure, everything from HR to IT spend needs to be managed. And with cloud providers offering all these services in a hosted environment, companies can focus less on spending resources on hardware and software upgrades, and more on delivering strategic objectives.

The recent arrival of two multinational data centres in South Africa is also expected to significantly shake up how the cloud is approached, as well as the types of services delivered in the country.

“Fortunately, this focus means services providers will do everything in their power to mitigate the risks of data breaches and other availability concerns. These data centres are also expected to bring other international competitors into the South African market. Local servers mean faster response times and fewer delays in analysing data.”

The cloud route also provides companies with the ability to easily and cost-effectively scale up or down according to the needs of the business.

Migrating to the cloud, solutions are automatically updated

“Instead of purchasing additional servers or expanding an on-site data warehouse, the cloud provider has the required functionality to add capacity,” says McAlister. “For organisations that are growing quickly, being able to easily accommodate new employees as well as more seamlessly manage payroll and HR processes can make a considerable difference in the efficacy of operations.”

And when migrating to the cloud, solutions are automatically updated when new features become available. Companies therefore do not have to worry about patching or updating software.

“The cloud is going to change the business landscape even more over the coming months. But fundamentally it is still about keeping data safe, available, and online using dedicated resources tailored to the needs of the business.”

To read more about this topic, click here to download our free White Paper ‘Enhancing Payroll with the Cloud’.

Outsourcing HR can optimise human capital
Outsourcing HR can optimise human capital

Complex labour legislation is among the many reasons why more companies are choosing to outsource their human resource (HR) function to specialists while they focus on delivering on the core strategy.

Organisations of all sizes can benefit from going the outsourced route as it delivers good return on investment and reduces the risk of human capital.

Curbing cost and reducing risk

In fact, the main drivers of outsourced HR services are built around reducing the cost and risk of the following critical elements:

  • Recruiting unsuitable candidates;
  • Non-compliant employment contracts;
  • Remuneration and deductions calculation errors due to non-compliance;
  • Non-compliant policies and procedures;
  • Non-compliance with the Employment Equity Act (EEA) which can see fines starting at R1.5 million;
  • Flawed disciplinary processes and procedures; and
  • Issues relating to the staff exit process.

When is the right time to outsource?

  • As soon as possible.
    • Employment legislation governs the employer-employee lifecycle, so expert HR services are needed from the start;
  • When you are experiencing growth.
    • As the business grows, so the compliance requirements become more complex. Once the employee count exceeds 50, or annual turnover exceeds the threshold for the industry the company is operating in, it must start complying with the EEA;
  • Regaining core focus
    • It is essential for the business to leave the day-to-day HR issues to the professionals so it can focus on its strategic priorities.
Selecting outsourced services

For an SME, the most important services are the following:

  • Employment contracts;
  • Policies and procedures;
  • Remuneration/deductions;
  • Performance management;
  • Disciplinary procedures;
  • Retrenchment;
  • Employment equity; and
  • Workplace Skills Plan/Annual Training Report.

Procedurally, these can have a huge impact on the business if not done correctly.

Selecting a services provider
  • Expertise
    • Ensure the service provider is registered with the SABPP (SA Board for People Practices), the professional body for HR practitioners in South Africa, as well as the quality assurance body for HE learning provision;
  • Pricing
    • You get what you pay for. The services might be affordable, but this is usually an indication that they are not comprehensive. Many clients end up at the CCMA because they chose to use a cheaper outsourced HR service. Ultimately, this will cost your business more money in the long-run.
  • Reputation
    • Based on testimonials from other clients.
  • Cultural fit
    • The chosen HR service provider must be able to adapt to your needs. The best way to do this is to “become one of their employees” to provide the service. They must develop a one-on-one relationship with each client, underpinned by a personalised service. Agility is key – the ability to fit in with the client’s culture and systems.
Benefits for employers
  • Reduced risk, cost savings (fewer CCMA cases and fewer penalties); and
  • Return on investment (Skills Development Levy rebates).

Benefits for employees

  • Access to a professional and impartial opinion when faced with HR issues, e.g. a disciplinary hearing is chaired by a truly independent chairperson. This ensures that the hearing has a fair outcome and reduces the risk of the employee taking his/her case to the CCMA (which is also beneficial for the organisation).
Migrating your payroll to the cloud
Ever considered migrating your payroll to the cloud?

While the arrival of multinational data centres in South Africa has prompted more organisations to consider moving to the cloud, some are still hesitant to migrate their payroll to this environment. According to Ian McAlister, General Manager of CRS Technologies, the advantages far outweigh any concerns.

“When it comes to payroll, there are three main benefits to consider – scalability, efficiency, and strategic value. These are particularly relevant to private or hybrid cloud models which offer the most benefit to businesses in their transition to this environment.”

From a scalability perspective, the ability of the cloud to support fluctuating work loads ensures a business can grow easily without needing to invest in new infrastructure. Furthermore, companies can scale down their workload during non-peak times of the month and save on operational expenses in the process.

Because solutions and data on a private or hybrid cloud mean users have secure access to sensitive information wherever they have internet connectivity, accessing payroll solutions from there is an increasingly efficient way of doing business. Given how cloud-based platforms must comply with all regulatory requirements around data protection, businesses can focus on their core mandate while leaving the security to the professionals.

In terms of strategic value, using cloud-based payroll solutions not only streamlines work processes because the service providers manage the required infrastructure, it also better enables collaboration between departments and gives organisations a competitive advantage over those still encumbered by on-premise solutions.

“Tying all this together is the ability of private and hybrid cloud models to provide payroll departments with a customised environment that can suit the specific needs of the organisation. The service provider typically is also able to provide the business with add-ons via a partner network that can further enhance the data analysis capabilities of HR and payroll,” McAlister says.

Overcoming obstacles

Of course, this does not mean there are not challenges to navigate when migrating to the cloud.

“Decision-makers are still concerned about the availability and security of data stored in the cloud. With the complexities of the regulatory environment continually shifting the goalposts on how data needs to be protected, organisations must understand the implications of moving sensitive payroll data and the financial and reputational repercussions if this is compromised.”

After all, if customers (and employees) feel unsafe with their service provider (and how it stores records), they will move to a competitor or change companies.

With the likes of the Protection of Personal Information Act (POPIA) in South Africa and the General Data Protection Regulation (GDPR) in the Europe Union posing strict fines on companies not taking the required steps to protect data, businesses are under pressure to ensure they remain compliant. Considering the sensitivity of data associated with HR and payroll systems, having that compromised could significantly impact the business and its employees.

Industry shift

Despite these concerns, numerous international surveys with finance leaders and broader business audiences point to significant momentum building around cloud experimentation and adoption.

According to a global outsourcing survey conducted by Deloitte in 2018, 93% of companies said their organisations were adopting or considering the cloud. In a poll of nearly 3 000 finance and business leaders conducted during a Deloitte webcast, 41% said they had cloud technologies in place or were in the process of implementing. Another 16% said they were assessing cloud options. A further 48% of finance executives polled in the webcast said cloud technology would be critical to the performance of their finance organisation in two years’ time.

This is also reflective of the South African environment.

IDC research shows that 93% of local companies are developing cloud strategies and are either in the implementation phase or planning implementation soon. Furthermore, the IDC predicts that spending on public cloud services will nearly triple over the next five years, up from R4,29 billion in 2017 to R11,53 billion in 2022.

“Adding further impetus to this is that more multinational organisations plan to launch data centres in the country,” says McAlister. “This will address many of the regulatory concerns around where data is stored, as well as the speed of accessing information on servers.”

Partner-led

“Decision-makers must understand that the cloud, for all its benefits, is not a silver bullet that solves all payroll challenges. The organisation must first understand what it hopes to accomplish from the cloud. A business case must be developed, and the strategic deliverables aligned to the model best suited to the task at hand.”

From a payroll perspective, the sensitive nature of the data at hand and the critical importance of these departments for business growth, mean the ideal environments would be either a private cloud or a hybrid model. The public cloud is simply not secure enough for these vitally important data stores.

“Companies need to select a partner capable of delivering either a private or hybrid cloud offering, based on their specific requirements. This partner must have the best practice experience of operating in these environments and be able to assist with change management to educate users on how to get the most value out of their payroll applications in the cloud,” McAlister concludes.