HCM and payroll change management guide

HCM (Human Capital Management) and payroll processes involve technological platforms and systems that revolve around managing an organization’s people and ensuring they are paid compliantly, accurately and on time. These processes affect many aspects of an organization’s operations, so the decision to change systems is not a small one.

Why change your HCM and payroll systems?

Organizations spend significant time and money to evaluate such a major change, and it often seems easier to stick with a current process that’s just good enough. But even though new changes come with risk, businesses that stick with old HCM and payroll solutions run the risk of inefficiencies that can become costly down the road.

Your business isn’t static, so operational processing should adapt to support changes over time. Change in HCM and payroll processes might be necessary for your business if you’re:

• Struggling with decentralized payroll data
• Relying on too many manual processes that lead to errors and late payments
• Looking for a scalable HCM and payroll solution

In this blog, we’ll outline four main steps you can take to get started if you’re considering changing your HCM and payroll systems.

Step 1: Consideration

Before beginning any HCM and payroll system change, first make sure your organization has fully taken stock of all the possible impacts. Here are examples of some of the checks to assess across your organization:

Data readiness

• Does your current payroll provider integrate with your HCM system?
• What payroll data exists in your HCM today?
• Is your organization’s structure uniform and loaded into your HCM already?

In-country provider status

• When do your current in-country provider contracts expire?
• How tight are the terms of the current contracts?
• Are you able to exit any contracts you might need to end?
• What special conditions are in the agreements?

Current staff

• How much expertise about payroll in different countries does your current payroll team have?
• What unique workflows have evolved that may not be part of the existing documented process?
• What is the new system's impact on processes and workflows for HR, payroll and finance teams?
• Will new hires or promotions need to take place for this process to be successful?

Step 2: Align with key stakeholders

Once you’ve prepared your data and infrastructure, you can turn your full attention to your people. A key part of this step is communication. The more you proactively communicate and actively solicit and incorporate feedback from stakeholders across the organization, the more they will be invested in the new HCM and payroll system’s success.

Understand your stakeholder dependency

The payroll process at your organization may include stakeholders from finance, treasury, IT, HR and other divisions. With so many people involved, it’s important to build a dependency map for every part of the process throughout the HCM and payroll change. Who are you going to rely on at each step? Who will be the point person for integrations, setting reminders for employees, or getting historical data?

Once you understand each dependency, it’s also important to map out the implications down the reporting line. Use your dependency map to tailor your messaging to stakeholders.

Explain the project function

Describe precisely what is changing and all parts affected. Not every department may be familiar with everything that an HCM and payroll system change entails. Be explicit about what is changing and speak the language of your audience.

Describe the benefits relevant to your audience

Some stakeholders just care about why a change is good for them. Understand the different needs and perspectives and communicate the value to each individual. This step is one of the most overlooked elements of change management communication plans. Explaining how an HCM and payroll change helps stakeholders directly goes a long way in securing buy-in. Below are some examples of how an HCM and payroll change benefits stakeholders in different departments.

Objector

Benefit

HR leadership

Routine reports will be less onerous to generate, which leads to smarter and faster decisions

Finance

Fewer hours involved in administering HR and a more streamlined process for expansion

HR team

Reduced error rates and faster processing times for each payroll cycle

IT/CISO

More secure handing of personally identifiable information

Legal

Reduced liability due to noncompliance

Confront objections head-on

Don’t hide from the uncomfortable conversations about the HCM and payroll change, especially the changes that are disrupting the status quo. Address them early and often. Listen to and welcome feedback, explain the reasons and plan, and explain again. Here are four main types of stakeholders that you’ll encounter and how to engage with them.

• Supporters: These folks have bought in and are ready to help with the HCM and payroll change. Use them to your advantage as evangelists who sell the change to their peers. These folks are essential to your cause.
• Fence-sitters: These folks are skeptical. They have seen HCM and payroll change attempts before. They buy into the reasoning, but they’re just not sure you can pull it off. You need to embrace them as well, but you will have to proactively pull them in. As a fence-sitter, they won’t initiate engagement, but if you work with them, they will become supporters.
• Active dissenters: These are the naysayers, and they make themselves known. They’re not happy about the HCM and payroll change, so they attempt to poke holes and are pessimistic because they’ve seen changes fail before. The good news is that it’s possible to change their minds. For the most part, you can persuade an active dissenter into a supporter by investing in them. Answer their questions patiently, multiple times. Win them over and they will become your most effective supporters.
• Passive dissenters: This is your most dangerous group. They are hard to convert because they are hard to find. They never show themselves as active dissenters. They will present themselves as fence-sitters or possibly fake supporters. Seldom are they great employees, and usually they need to be strong-armed into compliance.

Communication must be a two-way street. Identify gaps in your plan and solicit input from stakeholders to solve potential issues. Be sure to respond to every piece of feedback, because passive dissenters may use a lack of response as fuel and evidence of future project failure.

When responding to feedback, explain to stakeholders why something will or won’t be included and work with them to understand the logic of the decision. This helps to create buy-in for the HCM and payroll change.

Step 3: Cutover

As you get ready for implementation, it’s critical that all of your stakeholders are ready to support the transition to the new HCM and payroll systems.

Stakeholder preparation

• Train stakeholders on short-term workarounds from the expected implementation and pre-existing processes
• Reinforce your training through an internal communications campaign
• Print out procedure cards and distribute them to stakeholders to remind them of the essentials
• Administer certification tests
• Put up posters to remind folks of the cutover date

By now any resistance to change should have been converted or neutralized. If you still have active and passive dissenters to the new HCM and payroll systems, your organization may not be ready, and your cutover is at significant risk. For the smoothest transition, ensure that everyone is on board before moving forward. Otherwise, it’s likely you will have to add even more time and resources to the project.

Step 4: Post-launch

Now is the time for ongoing care and maintenance to ensure the newly implemented HCM and payroll processes run smoothly.

Keep the feedback loop open

The feedback loop is just as significant post-launch as it is in development. You probably didn’t get everything right out of the gate, and that’s okay. By putting in escalation procedures to respond to feedback on the new HCM and payroll processes, solutions can be found more quickly and efficiently.

Protect against rogue parallel processing and workarounds

When stakeholders stray from the defined operational process, remember that most just want to do a good job and don’t intend to undermine the project. However, the reasons don’t matter as much as your response. Be ready to manage the problem and steer stakeholders back:

• Keep an eye out for people reverting to old workflows and systems
• Proactively identify and address any issues with the new HCM and payroll process
• Conduct a post-implementation audit to gain a clear picture of the change’s impact

Overall, it’s helpful to keep stakeholders updated on the bigger picture of the HCM and payroll implementation. When the project succeeds, they should share in the victory for the organization.

Partner with HCM and payroll system experts

At Safeguard Pay, we manage, accelerate and scale payroll for organizations around the world. We deliver a unified client experience through a global community of local payroll experts, partners and an agile platform for accurate, compliant and timely pay with every cycle. Additionally, we’ve been a dedicated Workday partner for over ten years with experience implementing bi-directional, API-driven and certified Workday integrations. Learn more about our comprehensive solution, Payroll 360, and let’s get in touch to discuss your company’s specific HCM and payroll needs.