Challenges for Payroll Functions

Learn how to manage payroll functions

An organization’s payroll function can be complicated and somewhat tricky to manage, requiring a multitude of skills and knowledge in various areas of administration, human resources, finance, technology, and management. A poorly managed payroll operation creates disruptions that significantly reduce employee morale and productivity. Challenges may occur even in well-operated payroll functions when special projects arise. Learning how to manage the daily payroll processing responsibilities along with projects is something everyone needs to know, especially as payroll departments are running leaner.

Factors Affecting the Payroll Department

The main factors affecting the payroll department are continually changing environments, using technology as an enabler, compliance issues, managing data and the related policies, and disparate internal payroll groups and processes.

The only sure thing in payroll is changing; tax law changes, employee population fluctuations, and deviations to business direction all affect payroll processes and legislation. There are thousands of payroll tax jurisdictions in the U.S. alone, and keeping up with the changes is a constant struggle. Organizations often have difficulty managing the employee data between multiple systems and agreeing on a set policy to manage their employee data. All these challenges are exacerbated by different payroll groups internally.

A team of knowledgeable and experienced payroll professionals is recommended to plan, implement, develop, and maintain your organization’s payroll processes, policies, staff, and technology.

Take the Next Step

As organizations are always changing through growth, acquisition, or new product introduction, existing payroll functions are, most times, inadequate to handle the change. While outsourced payroll services may differ across organizations, our payroll services fall into two categories: assessment and planning and implementation assistance.

Assessment and planning are the first step and pillars of the project needed to ensure all payroll challenges have been identified and understood. During this process, your provider should work closely with your internal team to conduct a full assessment of the four components of payroll: people or staffing, technologies in place, payroll processes, and internal policies. Once a comprehensive evaluation has been completed, the next step is to create an executive presentation highlighting the necessary steps to remedy any issues and share it with senior executives at your organization. Once the plan is approved, your payroll team will help implement the project.

Our team at Sikich is experienced in helping with process redesign work, technology implementation, and staff training or re-training. We also help organizations through the transitional period during staff, technology, or process changes. For more information, please reach out to our team.


This publication contains general information only and Sikich is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or any other professional advice or services. This publication is not a substitute for such professional advice or services, nor should you use it as a basis for any decision, action or omission that may affect you or your business. Before making any decision, taking any action or omitting an action that may affect you or your business, you should consult a qualified professional advisor. In addition, this publication may contain certain content generated by an artificial intelligence (AI) language model. You acknowledge that Sikich shall not be responsible for any loss sustained by you or any person who relies on this publication.

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