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Are You Prepared If Your Payroll Person Leaves?

What happens when your payroll person schedules a meeting with you – and it turns out that the purpose of the meeting is to announce that she or he is leaving your company for a better opportunity?

Ouch. It hurts and it makes your stress level simply skyrocket. But it happens. Losing a valuable team member in such a business-critical role can leave a devastating gap that needs to be filled quickly, but sensibly, for the ongoing success of your entire organization.

Smart Steps to Take

Now is the time to think about the situation thoroughly and professionally. Get through the initial emotion, then take a breath and prepare to move forward.

  • Stay calm. When an employee resigns, the worst thing you can do is lash out in response. Instead, remain calm and ask the person why they’re planning to leave. You don’t want to put them in an uncomfortable position, but you may be able to learn something that will help you craft a counteroffer, find another means of retaining the employee or hone the position or job description to improve retention of a new employee.
  • Put your emergency backup plan into place immediately. Hopefully you already have your processes documented and have another member of your staff cross trained in this area.  If not, this should be your top priority before your current person leaves with all that knowledge about how your unique business’s payroll is managed.  Clear your current employee’s workload so attention can focus on getting the backup person trained and procedures in writing.  Whether this backup person becomes the long-term solution, or they just fill in until a new person can be hired, those written procedures will be invaluable.
  • Find a way to fill the gap. Whether you plan to directly replace your departing payroll person or change someone else’s role internally, you have a significant gap to fill. Take time to evaluate the needs of the vacant role, compare them against your existing employees’ capabilities, and only then determine how the role should be defined, who should fill it, and when.
  • Communicate the news as soon as possible. Nip any rumors in the bud. It’s imperative to enable your departing employee to make the announcement soon. It’s equally important to be candid with your other team members. Be clear that the resignation is unwanted, but change is inevitable and you have a solid solution for the pending transition. Remind employees and managers of deadlines for requesting for pay/deduction changes and approving timesheets.  These will be even more important to honor in the coming weeks since payroll will take longer than normal to process.
  • Review your legal obligations. When an employee decides to leave your organization, you need to ensure compliance with all related employment laws. Legal compliance includes payment of all accrued wages, disbursement of any accrued benefits that must be paid upon termination, and provision of legal notices regarding such matters as COBRA insurance, unemployment and worker’s compensation notices. No one knows this better than a payroll pro.
  • Conduct an exit interview. This is an important step to not only gain insight into a person’s experience with your company, but also to complete necessary steps in tying up any loose ends and avoiding further problems down the line. Give your employee the chance to say what they hesitated to while they were working for you – and use this information to make improvements going forward.

Filling your payroll position – perhaps on a temporary basis at first, if you’re not prepared for an immediate full-time hire – and having an emergency backup plan in place, are smart business strategies for any company. HR Works can help on both counts. Even if such a situation is not already happening or imminent at your organization, contact us today so we can work with you to handle it effectively and successfully.

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HR Works, Inc., headquartered at 200 WillowBrook Office Park in Fairport (Rochester), New York, with an office in East Syracuse, is a human resource management outsourcing and consulting firm serving clients throughout the United States. HR Works provides scalable strategic human resource management and consulting services, including: affirmative action programs; benefits administration outsourcing; HRIS self-service technology; full-time, part-time and interim on-site HR managers; HR audits; legally reviewed employee handbooks and supervisor manuals; talent management and recruiting services; and training of managers and HR professionals.