Ask management at almost any small or mid-sized company, “Who owns payroll at your organization?” and you’re bound to get answers all over the map.
In fact, in Namely’s recent research, we found that 34 percent of companies say that HR owns payroll; 25 percent say that finance owns payroll; 35 percent say a separate payroll department owns payroll; and 6 percent completely outsource payroll. Needless to say, there is no standard for where payroll should fall within a company.
According to Deloitte, however, “There has been a shift in the market on where Payroll reports. Organizations are moving Payroll from reporting to Finance to either reporting to HR or reporting to a shared service where a shared service could report to either HR or Finance.”
They report that as of 2020, 50 percent of companies responded that payroll now falls to the HR team. Deloitte also reported that on average, employees responsible for payroll spend only 27 percent of their monthly time actually running payroll. The rest of their time is split between reconciliation, audits, and controls (which would historically fall under the finance department) and answering employee questions (which would historically fall under the HR department).
So where should payroll fall at your company? Our guide will explore some considerations that can help you make the best decision.