It was a normal day, and everything seemed perfectly fine, until an unexpected system outage happened. Suddenly, the whole company’s systems were down, and all employees were left in shock – especially the payroll officers, system admins, and managers. It’s pay run day! This situation can be a nightmare for any HR/payroll department. However, it’s important to keep calm and focus on what you can control, not what you can’t. A Business Continuity Plan for payroll and other functions like contacting staff is akin to insurance – you hope that it won’t ever be required, but when it is, you’re glad that you have it. This blog will give some tips on how to create a payroll business continuity plan during system outages.  

Identify your critical processes. 

Before you start planning, identify the most critical processes in your payroll function. Focus on these areas first. Include payroll processing, tax payments, and filing, direct deposit processing, vacation, sick, and leave accruals, and other essential HR-related functions. Once you have identified these processes, you can start developing a Business Continuity Plan (BCP). 

Have backup systems and processes in place. 

Make sure you have backup systems and processes in place for your payroll processing. This includes having a second computer, backed-up information, and possibly an alternate location to work from. Cloud-based payroll systems are also a good option as they can be accessed from anywhere, but they are also no impervious to failure. Understand your cloud hosted vendor system Service Level Agreements to restore a service to see how your processes could be impacted.  

Whether your solutions are cloud hosted or local servers, ensuring that all your data is backed up regularly is essential. Having a data backup and recovery plan can make it easier to recover if you experience a system outage or data loss. Teams can be crossed trained in payroll processing to remove single points of failure and create redundancy. Processes should also be self-sustaining: If a role or responsibilities change, part of the change management should also include checking that BCP responsibilities and information have also been updated. Consider where operational and staffing changes could impact the clarity and assignment of roles and responsibilities during a BCP event. This should be factored into the maintenance of policies, procedures and supporting documentation like contact lists/call trees.  

Keep your employees informed. 

Amid a BCP event, it’s natural for your employees to experience feelings of anxiety and frustration. To ease their concerns, it’s crucial to maintain an open line of communication. Regularly update them through channels like email, SMS, or social media. Keep them in the loop about the latest developments and the ongoing efforts to resolve the issue. Additionally, offer reassurance that their pay will be processed as soon as possible. 

Achieving this level of communication hinges on having a well-maintained backup reference point of contacts. This entails routinely testing the contact information to ensure it remains current and accurate. Implementing something as basic as an emergency contact list and consistently testing it can significantly impact your business’s ability to maintain operations during disruptions. 

Develop a test plan. 

Now that you have identified the critical processes, communications plan, backup systems and processes, it’s important to test everything. Make sure your BCP works from a practical standpoint. Create test payroll data and test the backup systems and processes. Identify the gaps between BAU and the BCP then improve them. Regular review and testing will ensure that everyone is familiar with the BCP procedures and that they work flawlessly when needed. A hypothetical BCP will have gaps. It is critical to make sure the plan is practical but to have scheduled testing (i.e. 6 monthly or annually at least), along with conducting tests when there are significant changes and updates to the BCP. Waiting for a real BCP event and doing a live test is not the time to find out that there is something missing or incorrect, and that staff cannot be paid on time. Ensure your testing includes recovering from the BCP event as well.  

Learning from the experience. 

While an outage is certainly a stressful experience, it is also an opportunity to learn. Testing in advance minimises the risks associated with finding issues and gaps in payroll business continuity. Make sure you conduct a thorough review of any outage and identify the root causes of the problem. Document everything and use the knowledge gained to improve your payroll BCP and minimise the likelihood of failure.  

Planning for payroll business continuity is essential for any organisation. Having a reliable and tested backup system, identifying critical payroll processes and documenting them, having proper communication channels, conducting regular testing, and learning from previous outages are all essential steps in ensuring that your payroll function runs smoothly, and your employees are paid on time.  

So, remember to take a deep breath and keep calm – put these tips into action, and you’ll be supported with the right information to continue paying your people on time even when facing the unexpected business continuity event. Natural disaster, systems outages, staff absences are all manageable.  

Not sure where to start? 

At Payroll Experts Australia, we offer a range of services designed to help businesses ensure they are using the right systems for their needs and help develop a Business Continuity Plan so if the unexpected happens, you are covered. Our team of Payroll Experts will review your current payroll processes and provide recommendations on how to improve and ensure you have a backup in place. 

Businesses can email or call 1300 287 213 for free first-step advice on how to ensure your Payroll processes can safeguard your Payroll compliance. Follow us on LinkedIn or sign up here to receive our articles direct to your email inbox.