Workarounds and buffers in the payroll cycle make it far less time-sensitive than most organizations think. Payroll is often automatically labeled as Tier 1 in BC/DR planning, and mistakenly given a higher priority than other truly time-sensitive services (e.g. customer-facing services).
Most organizations can tolerate a day of downtime and still execute an accurate payroll run, so high availability (HA) is not required. Furthermore, even if your normal payroll can’t be executed, there are workarounds to ensure at least base salaries are paid, limiting the impact.
Ensure you are clear on the following before assuming payroll can’t tolerate any downtime:
We’ll look at these issues from the perspective of a Financial Services organization, but the same concepts are true for most industries.
Document and review your payroll process to identify time-sensitive steps. Typically, the most time-sensitive step is the actual creation, review/approval, and submission of the payroll file. Clarify how much leeway you have. For example:
Similarly, consider other time-sensitive steps, such as submission of timesheets and payroll adjustments (e.g. salary changes, bonuses awarded). For example:
Every organization I’ve worked with has been able to identify a workaround, but it needs to be formalized, tested, and pre-approved to avoid delays and mistakes in executing those workarounds.
Work with your Finance team to identify what fits your requirements. Below are a few examples:
Workaround 1: Create and maintain a base payroll file as a stop-gap.
This ensures all staff receive at least their base pay. For part-time staff, use the average hours worked. Alternatively, allocate the upper-end of the range of hours worked by part-time staff to err on the side of overpayment.
Workaround 2: Modify base payroll file to get closer to an accurate payroll run.
This option works in conjunction with Workaround 1, but takes it a step further if possible depending on the nature of the outage. The goal here would be to resolve the most problematic issues to minimize goodwill impact with staff and reconciliation efforts for next payroll. For example, remove part-time staff who did not work that pay period.
Workaround 3: Instruct your bank (or payroll service provider) to re-run the same payroll file from the previous pay period.
This is the easiest option and ensures staff are paid a reasonable (if not accurate) salary, but is also potentially the most problematic as it does not allow for adjustments and variability week to week. Potential issues include:
For all of the above workarounds, be prepared to:
Payroll is a great example of why organizations need to conduct a business impact analysis (BIA) to determine criticality, rather than go by gut feel. Conduct a BIA to ensure payroll is properly ranked based on impact and time-sensitivity:
For payroll disruptions, the impact is indirect (e.g. staff are upset about delays in pay or inaccurate pay, and that can affect job performance; however, ask yourself if staff in your organization would actually walk out and risk their careers over a one-day pay delay). Furthermore, some downtime can be incurred before there is any impact, and that impact can be mitigated by implementing workarounds.
Don’t assume payroll is your highest priority for DR and business continuity. Yes, people need to be paid, but most payroll processes can tolerate downtime. Furthermore, workarounds can reduce payroll downtime risk without implementing an expensive HA solution.
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