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Remuneration and Benefits vs. Payroll

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I have recently been to a number of presentations and discussions on education of the payroll practitioner. At most of these a question has been raised: “Are we not confusing the Remuneration and Benefits Specialist with the Payroll Practitioner?” At many of these discussions the question was adequately answered, yet at others the panel seemed confused and did not know how to answer. At one discussion, this took the topic totally off what was been discussed where the balance of the time, about 45 minutes, was taken up in a discussion around the Remuneration and Benefits Specialist and the Payroll Practitioner.

I am going to try and answer this question by:

  • Looking at the history of the two positions;
  • Considering the traditional difference between the two positions; and
  • Showing what is really happening in the marketplace today.

History

When it became necessary for companies to have a specialised paymaster, the role of the payroll practitioner was born. This position was purely responsible to ensure that the correct income was calculated and paid across to the employees. As business evolved as well as the statutory requirements this position started to become more involved. Businesses started to compete in trying to get the best employees and a “wage war” seemed to evolve. To prevent this, larger companies created a position where they would have a specialist monitor what was happening in the market place with wages and to watch that there would be parity in the company between employees’ wages.

Companies wanted to prevent employees of similar position and duties from earning at differing rates. These new specialists became what we know as the Remuneration and Benefits Specialist. Job grading was started to classify employees in certain brackets which would determine their earnings, responsibilities and skills. This saw the birth of grading norms like Pattersons, Hayes and Peromnes.

Difference

The Remuneration and Benefits Specialist became responsible for ensuring parity of earnings and benefits within the organisation as well as parity in the marketplace. These professionals would need to watch the market and ensure that the company remained within the wage brackets of the market. In addition this position is responsible for ensuring that the company benefits were the best that could be offered. The specialist will negotiate with fund companies on the best deals that are available for the company employee. The Remuneration and Benefits Specialist also ensures that the payroll budget was set and adhered to by the company management.

The Payroll Practitioner is to ensure that all employees and third parties are correctly paid after correctly calculating the income and deductions for an employee. This position ensures that all the company contributions and earnings are correctly recorded for both company and statutory requirements.

Current Trends

As payroll and remuneration and benefits have evolved, due to the increasing number of statutory requirements and complexities within companies, these two positions have grown closer together in their duties. Especially with the rise of the small and medium enterprises, these positions are now being performed by the same person. Due to this phenomenon, even larger corporates have merged these positions into one. Some companies have a payroll department which is spilt into a Payroll Manager, Payroll Administrator and Payroll clerks.

The Payroll Manager in these larger corporations is the Remuneration and Benefits Specialist and is sometimes still referred to as this. The Payroll Administrator is to ensure the compliance of the payroll and that it is correctly run. The clerks are those who do the capturing and checking of the input. In all cases these differing roles need to understand the way in which each other’s positions work. All need to be educated and know how to remain abreast of the continually changing laws and rules.

If we look at what I have discussed, then in my opinion, in today’s market, the Remuneration and Benefits Specialist and the Payroll Practitioner are very closely related. In many cases they are one and the same person. Therefore the education of the Payroll Practitioner is as important as ensuring that the Remuneration and Benefits Specialist is properly educated.

Deryn Venski
Training and Development Practitioner – LabourNet Payroll Solutions
Over 20 years’ experience at various levels of Payroll and Remuneration and Benefits.