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Why payroll should always be prepared 

Payroll needs to be at the core of all business continuity plans. The mantra is: hope for the best, but prepare for the worst.

Few business functions are as critical as payroll. When disaster strikes, employees need their paychecks both to personally navigate the crisis and to help their organizations succeed. From the pandemic to political upheaval, the past few years have shown leaders they need to be thinking seriously about risk — and creating plans to keep their businesses running. 

Payroll is a crucial but often overlooked piece of any good continuity plan. A business continuity plan (BCP) should include contingencies for all potential threats affecting a business, from natural disasters to cyberattacks to pandemics. Approaches to disaster response and business resilience may vary from worksite to worksite, division to division and country to country. 

A BCP should be treated like a living document, one that is consistently updated for current business realities, and should be created with stakeholders, not in a silo. And it should be tested on a regular basis, with drills and dry runs. Regarding payroll, your BCP might need to include off-site data storage and backup vendors.

As technology evolves, your organization’s business needs and contingency plans will evolve. And your software vendors and other suppliers should be included in planning and testing your BCP. Any assets or data stored in the cloud or managed by third-party service providers should regularly receive independent security assessments. ADP has developed a Global Business Resiliency Program to establish a single, global framework that addresses how ADP manages and controls identified risks resulting from disasters and other significant business disruptions. 

BCPs can potentially help identify and mitigate fraud, according to the Journal of Accountancy. Fraud attempts, such as phishing attacks, fake vendors and price gouging, often increase in a crisis. In the first year of the pandemic, fraud complaints to the FBI increased by 69%, with losses exceeding $4.1 billion. BCPs should identify all of these common schemes and include plans to mitigate crisis-related fraud. 

Sharing the BCP within your organization is crucial to raising awareness of what to do in case the worst happens. A great plan won’t be much help during a disaster if no one knows where it lives. Many organizations create crisis response teams with representatives from relevant departments to condense all communications into one channel.

Seeing payroll organizations continuing to operate through any situation, like in Ukraine, should be a reminder to us all that, with the right preparations, payroll can survive any storm.

Grace Dobush

Based in Berlin, Grace Dobush is the editor of the ReThink Quarterly. She has written for publications including Fortune, Wired, Handelsblatt and Quartz.