The document emphasizes the importance of having a payroll contingency plan to mitigate risks from potential disruptions such as employee absences or IT issues. It illustrates the consequences of inadequate planning with an example of a payroll error that resulted in significant financial loss and employee dissatisfaction. The piece also suggests that outsourcing payroll can help manage these challenges and ensure timely payments to employees.

1. Payroll Contingency Planning
ADP Insider
Payroll contingency planning: the key to
surviving a payroll disaster.
January 23, 2015 - by ADP Insider
Severe weather, an absent payroll employee or an
IT hiccup are all common enough occurrences.
All can have a profound impact on your business
without warning. Would your company survive?
As the financial well-being of your business is
reliant on it ‘opening its doors’ it is crucial to have
a contingency plan in place. Thankfully, exposing
your business to disaster simply because you
do not have an adequate contingency plan is
something that can easily be avoided.
Contingency plan and mitigating risk
Contingency planning isn’t just for major
disasters; it could be loss of data, legislative
changes and day-to-day errors that can occur.
It is important to regularly re-examine as your
business grows and changes. And be mindful that
your plan should be specific to your company’s
unique needs.
Paying staff is critical to all business. Failure to
do so on time due to an absent payroll employee
can not only leave you with an irate employee
but ultimately, according to studies, leads to
a decrease in business productivity. Take US
company Luzerne County’s payroll mistake
for example, $2.8 million of wages didn’t get
distributed over Thanksgiving, due to one
employee being absent. Not only was it a costly
mistake for the company that violated federal
labour law, employees were hit by bank fees for
drawing on insufficient funds – not great.
Technology is also a major factor in the day to day
running of business. The larger your business is,
the more IT infrastructure you will likely have in
place. While the successful running of systems
may lie with the IT manager, payroll professionals
need to have a contingency plan in place that
involves IT disaster recovery too.
• It is important to recognise where your data
is being stored.
• How secure is your storage facility, what
happens in case of fire or flood?
• Do you have backups?
Issues with your data systems can have
disastrous effects on payroll operations.
Implementing a contingency plan can help
eliminate the possibility of an IT disaster crippling
your business.
Outsourcing and contingency planning
Payroll is inherently complex, coupled with it
being imperative to get right, outsourcing to
experts can be an option for reducing the burden
of contingency planning – allowing you to focus
on your core business. Outsourcing can provide
protection against severe weather, an absent
payroll employee or even that IT hiccup and to
ensure your employees get paid correctly and on
time.
In the end, it is important to consider: if a disaster
strikes, can your business protect employees and
ensure the stability and continuity it requires?
For more information on Luzerne County’s payroll
mistake visit: http://bit.ly/193CuuY
See more at: www.adppayroll.com.au/adpinsider
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"It is important to regularly re-
examine as your business grows
and changes. And be mindful that
your plan should be specific to your
company’s unique needs."
ADP Insider