Organisations that continue to use outdated HR and payroll systems and manual methods add unnecessary cost to their processes and put themselves at risk of data breaches, fines and reputational damage.

This is according to HR and payroll solution experts, Nicky Myburgh, Executive: HR & Payroll Solutions at BCX, and Heman Kassan, HR & Payroll Solutions lead at BCX.

Kassan says: “There are still businesses that are hesitant about moving from outdated HR and payroll solutions, despite the numerous benefits of migrating to advanced digital systems. Many of them know that their systems are outdated, time-consuming and costly, but making the switch can feel daunting.”  

BCX notes that managing payrolls manually costs a company between 1% and 8% of their payroll, while organisations that outsource their payroll spend up to 30% less on costs.

In many cases, delaying HR and payroll modernisation is due to fear of disruption, says Myburgh. “People tend to fear change. Because HR and payroll touches the lives of each and every employee, business leaders worry about downtime, migration headaches, compliance risks and staff pushback. The reality is they are often more afraid of the move than of the cost of standing still.”

The real risks of outdated systems

Running outdated systems bring with them very real risks of compliance penalties, downtime, payroll errors, and HR teams buried in admin. “Legacy systems aren’t safe – they’re risky and expensive to maintain,” Kassan says. 

In addition, manual payroll processing increases the risk of errors. Says Myburgh: “One wrong payslip erodes employee trust instantly. For the business, it can trigger fines, back-pay, and reputational damage.”

Unfounded migration fears  

Kassan and Myburgh note that many fears about migration are unfounded. 

“One of the big concerns for leaders is downtime, which they want to avoid at all costs. There are also concerns around compliance, data security and the costs of migration, particularly if a project doesn’t go according to plan,” Myburgh says.  

“In reality, you can do a migration or implementation of a new HR and payroll system without having any downtime at all, because the process is now so slick and efficient. The irony is that the older the system you’re running, the more prone you are to downtime.”

“Migration to more advanced systems also improves security and compliance, and can reduce costs,” she says.  

Getting migration right

Kassan and Myburgh emphasise that a seamless migration requires proper planning and an expert partner.

“The migration itself can be seen as a painful move, especially when moving from older systems,” says Myburgh. “But with the right approach and proper project methodology, it should be a smooth, seamless process. If you follow the proper methodologies and your data is cleaned up and ready, it should be an easy upload into the new system and you should have no downtime. 

“With dedicated migration teams and the proper methodologies, this part is easy. Once you’ve got your data migrated, your checking processes and parallel runs are much faster and easier too. The processes and structures you put in place for a migration or implementation are key to a successful migration.”

She adds: “It is also important that employees have a good experience when using a new HR and payroll system. To ensure that they do, they should be trained and proper change management should take place, so that they understand how the new system works. 

“Communication with employees should outline what they will see on their payslips and what the benefits of the new system are. With proper change management, there will be no employee disruption – a new system just changes the way they receive their information, giving them more rich functionality around their own information and how they access it.”

Enhancing compliance, derisking payroll

“Legislative compliance and data protection are top priorities for organisations today, making secure, cloud-based HR and payroll systems crucial, says Myburgh. “There is a big focus on employee data being confidential and the risks of leaks, so it’s very important that we secure that data.”

“With BCX cloud-based HR and payroll solutions, all data is kept very secure and compliant with POPI and GDPR. Another advantage of a cloud-based system is that changes in SARS requirements or legislation are automatically updated, so there is no need for organisations to upload any data manually. So, from a compliance perspective, there is no risk.”

Myburgh adds: “We also reduce the risk of missing data or incorrect payslips, because the system will automatically pick it up if anything is incorrect. Because the system is cloud-based, it offers a secure, scalable environment that always runs in real time and can be integrated into various other systems such as financial systems and human capital management systems. It’s also multi-country-compliant and future-proof.”

“BCX HR and payroll solutions take the pressure off of our clients and minimise business risk, freeing HR to focus on people instead of paperwork,” she says. 

Kassan concludes: “The risks associated with doing nothing are far greater than any perceived risks of migrating to an advanced cloud-based HR and payroll system. The good news is that, with the right partner, businesses can make the switch smoothly and unlock real business benefits and value.”

Nicky Myburgh and Heman Kassan discussed modernising HR and payroll systems in a recent BCX Connects podcast. To listen to the full podcast, go to https://www.bcx.co.za/bcx-connects.