The Practice Redesigning Modern
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What is Lean Payroll?
Lean Payroll turns traditional payroll processes on their head. It draws inspiration from Lean Manufacturing principles which aim to streamline processes and enables you to view payroll not as an isolated task but as a system that can be refined, improved, and made efficient.
In its simplest sense, it focuses on minimising errors and unnecessary steps in the payroll process to save time and resources.
The ultimate goal of Lean Payroll is to turn your payroll department from a cost centre into a strategic asset that can boost productivity, improve accuracy, and contribute to overall organisational success.
Read on to uncover everything you need to know about Lean Payroll practices, and the positive impact they can have in your organisation.
The productivity gap
In annual productivity in manufacturing
In annual productivity in the service sector
Manufacturing has embedded Lean practices for decades, as a result seeing a consistent 3% annual increase in productivity. This has led to manufacturing operations becoming 3.6 times more productive since 1990. In contrast, service sectors—such as payroll—have seen only a 1% annual rise in productivity, resulting in a more modest 1.5 times increase in overall efficiency over the same time period.
This discrepancy signals a need for a productivity overhaul in payroll processes, and Lean Payroll could be the catalyst for that change. With Lean, we’re not merely adhering to the status quo of payroll processes; we’re actively striving to optimise these processes, making them as efficient as possible so time can be better spent elsewhere.
Introducing the payroll bottleneck
To truly understand the need for Lean Payroll processes, first we have to introduce you to the payroll bottleneck—the biggest challenge faced in payroll processes today.
Essentially, the payroll bottleneck is a phase in the payroll cycle where you have to do large amounts of work, in a short time. It’s like a traffic jam where everything gets slow and crowded. This sudden surge in workload, often towards the end of the payroll cycle, results in operational congestion. The payroll team is forced to scramble to complete tasks, increasing the risk of errors and inefficiencies. This intensified pressure period, where tasks pile up and time runs thin, is what we refer to as the “payroll bottleneck.”
So, what does the payroll bottleneck look like in practice? Here are the traditional tasks in a payroll process, and how many of those have to fit within a short period of time:
What causes the payroll bottleneck?
Applying Lean pillars to payroll
While their roots may be firmly grounded in manufacturing, they hold immense potential for the complex landscape of payroll. Enter, Lean Payroll. Here’s how you can apply the Lean pillars to your payroll processes:
Lean Payroll in practice: decentralisation
The next big question you’re likely asking is, how can you possibly even out work, eliminate waste and reduce overburden? One of the answers lies in decentralising payroll responsibilities.
Instead of having a single centralised team managing all payroll activities, the responsibilities are distributed across different levels and departments of your organisation.
The primary focus of the payroll team shifts towards managing critical legal and accuracy aspects. Their expertise becomes invaluable in ensuring compliance with various regulations and maintaining the precision of payroll calculations. They serve as a point of reference for complex payroll matters and are responsible for maintaining a deep understanding of evolving payroll laws.
On the other hand, managers and department heads play an active role in the payroll process. They take charge of specific tasks such as inputting payroll data and updating employee details. This delegation not only empowers managers with a sense of ownership over their team’s payroll-related activities but also speeds up the process by eliminating unnecessary back-and-forths between different departments and the central payroll team.
By engaging managers and other stakeholders directly in the payroll process, your organisation benefits from improved accuracy and responsiveness. This approach fosters a culture of accountability, where managers are more attuned to the needs of their team members and the accurate documentation of their work hours and leaves.
The benefits of Lean Payroll
Everything you need to know about Lean Payroll
Walk through the entire concept with PSSG CTO, Seb Aspland—the mind behind Lean Payroll—covering everything from its roots up to a step-by-step guide for implementation. Packed with actionable guidance and thought leadership, it’s a guide not to be missed!
Practical steps for implementing Lean Payroll practices
Before you decentralise your payroll responsibilities, it’s important to review your payroll process and refine what you’d like the new process to become. Here are a series of steps for you to follow to help successfully implement Lean Payroll practices:
Lean Payroll at the Cintra Conference 2023
Catch Seb Aspland, PSSG CTO, discuss Lean Payroll at the 2023 Cintra Conference. Seb is obsessed with building great tech products that genuinely solve real-world problems. One of his biggest drivers is hearing how much customers love the products and knowing they’re somehow making a positive impact in the world. That desire to create a positive impact is where his passion for Lean Payroll was born.
What a Lean Payroll process really looks like
A diagram that once showed a complicated payroll process and an array of payroll bottlenecks, easily becomes a process that looks something like this once you’ve successfully implemented Lean Payroll practices:
Measuring the impact of Lean processes
The future of payroll with Lean practices
Modern, flexible, precise, agile.
The future of payroll in a lean environment could be profoundly different from what we see today. Two key concepts anchor a very futuristic vision, reflecting a shift in how modern payroll could be managed:
Operationalise Lean with technology
Technology should facilitate the newly defined process, not dictate it. It must be tailored to the specific needs and workflows of your organisation.
Culture and process come first: Technology’s real value comes into play after changes in culture, process, rules, and structure have been implemented. New technologies alone won’t fix underlying issues; they amplify the benefits of well-designed processes.
Start with understanding, then implement. What are you going to do? How will technology support it? Once clarity is reached, technology can be implemented to bolster the new process.
Your supportive partner
Transform how your payrollers work with managers
Cintra Groups gives your managers the power to own and enter payroll data for their teams, in real-time. With payrollers and managers working together in one centralised platform, there’s no more waiting for spreadsheets, no more invisible payroll data, and no more inconsistencies in process.
Turn your cost centre into a profit centre
Modernise how your organisation processes payroll by segmenting your organisation in Cintra Groups and delegating payroll responsibilities to your managers. Speed up and streamline your processes to save time, money and resource.
Lean Payroll in practice
5,890 hours saved annually
Arcus swapped their time-consuming, timesheet-based payroll process for Cintra Groups to pay their 4,500+ strong workforce and saved 15% of their managers resource annually.
50% of time saved on approvals
Olleco relied on manual payroll processes and spreadsheets to process payroll for their 700+ colleagues. By implementing Groups, they reduced time taken for manager approvals by 50%.
See Cintra Groups in action
Our payroll and HR experts are always on hand to discuss payroll challenges in your organisation. Because why settle for ordinary, outdated payroll processes?
Get in touch to see Cintra Groups in action and hear more about the incredible results that Groups users have seen.