HR and Payroll Migration: How to Change the System Without Missing Payday

Changing accounting software is unpleasant. Changing the payroll system is frightening: an error in a report is noticed by the auditor, an error in pay is noticed by everyone on the same day. Here is when it is time to replace an HR system, what actually moves, and how to run the migration so that nobody notices anything on payday.

The system that is never forgiven

Payroll has no right to be “almost correct”. An employee does not care that you are moving to a new platform. They need the amount on the card to match what they expected, and holiday pay to arrive before the holiday, not after.

That is why old payroll systems outlive everything else: if it works, don’t touch it. The trouble is that “works” slowly turns into “works as long as one person in the payroll office is not on leave”.

What the numbers say

A US survey by EY found errors in roughly 20% of payroll runs, with each input error costing a company $291 on average in time spent finding it, recalculating and explaining it to the employee.

UK-based MHR surveyed 251 HR and payroll managers at companies with a thousand or more employees. More than half of them, 52%, still use spreadsheets as part of the payroll process. And 27% admitted that in the past year they had paid people incorrectly or late between one and three times.

In a global UKG survey of more than 300 senior leaders, 38% put their annual losses from payroll inefficiency at between one and five million dollars. The main obstacles to fixing it were data accuracy (48%) and system integration (34%).

The conclusion is simple: payroll does not leak where it is calculated but at the seams, between timesheets, HR records, payroll and the bank. The more manual hand-offs, the more holes.

Six signs it is time to change the system

1. The vendor has ended support, or updates arrive more slowly than the law changes.
2. One person knows the calculation rules and there is no documentation.
3. A garden of spreadsheets has grown around the system: timesheets, bonuses and leave schedules live separately.
4. Rotational work, shift schedules or averaged working time are calculated by hand.
5. Employees walk to an office for a payslip or a certificate, and leave requests are written on paper.
6. A manager cannot get headcount, payroll cost and turnover for a department within a minute.

If three of the six apply, the system is no longer helping. It is holding you back.

What actually moves

It is not the software that moves. It is the data and the rules. Software can be installed in a day. The data took years to accumulate, and it hides everything that will surface on payday.

Eight groups of data to transfer and reconcile. Diagram by RBC Group.

• Organisation structure and positions, with their change history.
• Employee records: hires, transfers, terminations, contracts.
• Pay history: without it you cannot calculate average earnings for holiday and sick pay.
• Leave balances as of the cut-over date.
• Deductions: child support, court orders, company loans with outstanding balances.
• Schedules and timesheets: shifts, rotations, night and overtime hours.
• Year-to-date tax totals for every employee.
• Pay and deduction codes: the dictionary the whole calculation rests on.

Six steps of a migration

The migration sequence, from source audit to post-go-live support. Diagram by RBC Group.

1. Source audit. List every place where data about people and money lives: the core system, spreadsheets, access-control exports, the folder called “Bonuses_final”.
2. Data cleansing. Duplicates, contracts never closed, leavers with active deductions. Clean before you move: in a new system the mess does not disappear, it just becomes newer.
3. Pay code mapping. The same allowance has a different name and a different formula in each system. The mapping table is the key document of the project.
4. Trial loads. Two or three rehearsals of the transfer on a copy of the data, with timings and a list of discrepancies.
5. Parallel run. Both systems calculate the same payroll and the results are reconciled.
6. Cut-over and support. For the first months after go-live the project team stays next to the payroll office.

The parallel run: your main safety device

Trust, but verify. For at least two or three pay periods, payroll is calculated in both systems and reconciled for every employee and every pay code, to the cent.

Discrepancies come in three kinds. An error in the migrated data: fix and reload. A difference in rules: work out which rule is right. And the third, the most interesting: the new system is correct and the old one has been wrong for years. This turns up in almost every project, and it is better to learn about it yourself than from an inspector.

Five mistakes that derail a migration

1. The project was handed to IT. An HR system is about people and money. HR and payroll must own it; IT supports.
2. The mess was moved as is. A migration is a rare chance to simplify processes rather than rebuild old workarounds on a new platform.
3. The parallel run was cut short. One period instead of three, and the first non-standard case surfaces in production.
4. A poor cut-over date. Switching mid-year means carrying over year-to-date tax totals. It is easier to start in January, or at least at the start of a quarter.
5. People were forgotten. Payroll staff must be trained before go-live, and employees told in advance what the new payslip looks like and where to find it.

What the new system must be able to do

We develop RBC HCM Solutions, our own human capital management system for mid-size and large companies (earlier versions were known as HRB). When clients move to it from older platforms, they usually ask about six things:

• HR administration: organisation structure, positions, employee records, transfers, leave, business trips.
• Payroll: salaries, hourly pay, shift schedules, rotational work, allowances, deductions, child support, court orders, loans, taxes and mandatory contributions.
• Time and attendance: timesheets, night shifts, overtime, downtime.
• Document workflow: templates, approvals, change history, user audit trail.
• Employee self-service (ESS Portal): payslips, leave requests and certificates from a browser or a phone.
• Manager self-service: leave calendar, approvals and analytics for the department.

Questions and answers

How long does a payroll migration take?

It depends on headcount, schedule complexity and data quality. The transfer itself takes weeks; with the audit, cleansing and parallel run, a project usually takes several months.

When is the best time to switch?

At the start of the calendar year, so there are no part-year tax totals to carry over. If January is too far away, at the start of a quarter.

Do we need to migrate all the history?

Whatever affects calculations is mandatory: pay history for average earnings, leave balances, active deductions. The rest can stay in a read-only archive of the old system.

Can we skip the parallel run?

Technically yes. In practice it is a jump without a safety line: the first rotation, recalculation or court order will show that not everything was tested.

What is an ESS Portal?

An employee self-service portal: payslip, leave request, certificate and work schedule without a trip to the HR office. For HR it removes hundreds of routine requests a month.

Sources

• People Matters. One in five payroll payments contains errors (EY survey data)
• MHR. UK’s largest employers frequently pay their workforces incorrectly (Censuswide survey)
• People Matters. Payroll errors, inefficiencies leading to major financial losses for employers (UKG report)