The humble payslip: a treasure trove of data

A friend of mine recently moved home and the previous tenant hadn’t changed their address, which meant their mail was still being sent to her apartment. Most of the letters were non-descript, but one caught her eye. It was a familiar envelope with perforated edges; tear off the strips and a payslip would be revealed. My friend is a curious – well, nosey – sort of person and was very tempted to tear it open to see what was inside. All she really wanted to know was how much the previous tenant earned and how old he was.

Ethics and morals aside, she was on to something: payslips are a treasure trove of interesting information. Most companies opt for a digital version these, but they still contain the most basic – and yet, very useful – information. Usually, they are a statement of how much was earned, the tax that was paid and then any other deductions that were made. Most employees are interested in the net figure at the bottom and the money that will hit their account – or wallet. For companies, however, this data on all their employees can form the basis of a people analytics solution.

We often find that companies are keen to embark on a people analytics program, but they feel they don’t have enough, or the right, data to begin. They believe that they need to have a central HR system to start. And that once they have the data and system in place, they can begin with people analytics. It doesn’t have to be that way, however. If a company has a payroll system in place, then there is already a treasure trove of data that can be used.

The basic information on the payslip is a good starting point: contract type, age, gender, salary, location, role, department, job grade – all variables that can be analyzed. And when a payslip is created for a new employee, that would count as a new joiner, and when a payslip stops – that could be a leaver (although there are exceptions to this such as interns, or a business being sold). Also, if you have multiple payrolls, you can combine them to get a unified view of your organization. In other words, payroll data allows you to start with people analytics.

For example, you can segment headcount or labor costs data on all the attributes mentioned above. Another example is analyzing your turnover rates across business units, and also compare them by age, gender and so on. Companies can also track how long employees are staying in their positions on their salary, and also if there are gender disparities. And based on job titles, departments and locations, you can examine internal mobility. Or based on moves across job grades, you can see the number of promotions.

These are just some of the places where you can start. So with the payslip and payroll system, there is already plenty of data to embark on a people analytics journey.

And for those of you who are wondering what happened to the friend and the curiosity she faced at her door… She didn’t open the payslip, although it was very tempting.

Written by

Ralf Bovers

Head of Marketing

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