Paymaster Magazine

Hat 6 – What if……..

It is great when management want answers about how changes will affect staff cost or staff expenses, that we are the “go to” people. We have the answers. We are trusted to give the right information. So often management rely on our reports, our projections, our opinions to make decisions that could have far reaching consequences for the costs within the company.  A great responsibility rests on us to provide good accurate historical reports (normally a print from payroll) but also when asked to perform a projection that is when we stand up and are counted. This is the time when Payroll make their mark. We do the projections and on those projections management base their decisions. We need to get it right.


Let’s ask payroll for a projection.  Those words quicken the heart rate, they bring focus and concentration – time for payroll to be centre stage. Time to blue sky possible scenarios and we as payroll will be asked to run the numbers. “Just run the numbers and while you are there just run 5 different scenarios with three different minimum wages. We would like to see how that all works out!”


What if we introduced a pension fund… What would it cost at 5% ,7% or 9%?

What if the government upped the minimum wage? R 4500 or R 5000 or R5500?

Would we survive?

What if we gave everyone an extra days leave…. Then what would it cost?


The payroll department are the “go to people” to answer all the” what if” questions.

We do the forecasting and scenario planning. We take the data from the payroll and manipulate, add and number crunch before presenting management with a couple of scenarios to work with.  If we are respected, we may even be asked to venture an opinion as to what the right thing to do is.


How do we make sure we live up to this responsibility?


  1. Make sure you have a payroll system that can extract data in a format that you can use. It is great when you can get the report in excel and then work from there. If the payroll software can do the analysis and what if planning, even better.
  2. Make sure your payroll data is up to date and that you are working in the right month.
  3. Make sure the software can provide you with the right base information so that you do the projections using the correct data.
  4. Test your understanding of what is required. Stop, plan and then act
  5. Test the data before the what if analysis begins. Make sure you have taken into account all the variables.
  6. Test the final conclusions for reasonableness.
  7. Present the results in an easy to understand format. Graphs work well. I love the concept of a bottom line summary with the ability to dig down, if I have to.


What to do if you are not asked:


  1. Be proactive. Analyse your payroll, look for trends, find the possible savings. Watch the news, see what is coming and do the reports and present them to management even before they ask.
  2. Do a monthly analysis of what is happening that may impact payroll. You can include these in your monthly reports. Even just a small head’s up section.


A great example will be the changes to the retirement funding legislation in South Africa.  How is it going to impact on your payroll? How will you communicate to management the change in taxation? What about the look of the payslip as the providence fund contribution is no longer taxable?


Grab these opportunities with both hands to enhance the reputation of your payroll department.


Adrian Baillie-Stewart

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