Replacing HR and payroll
An operational organisation with field crews replacing its HR and payroll systems — where the hard part is the enterprise agreement, not the pay run.
A composite worked example, not a client. It is assembled from patterns that recur in operational organisations with a field workforce under an enterprise agreement, and from this library's model. No organisation is described, and every derived section is computed from the same model the rest of the site runs on.
Where it stands
Employee data lives in three places. The payroll system holds what it needs to pay people, a separate HR system holds the establishment, and the org chart that everyone actually uses is a spreadsheet maintained by one person.
The payroll system works, which is the problem. Its award and agreement rules were configured over a decade and modified in place, and nobody now holds a written statement of what they are. The instrument they were built from has been replaced twice since.
Time capture is split. Office staff use a form; field crews record hours on paper or in the works system, and somebody re-keys them before each pay. Allowances — on-call, standby, travel, higher duties — are the part most often corrected after payment.
Leave balances are carried forward rather than calculated. Long service leave in particular is a number nobody can reconstruct, because the service history behind it was migrated as a balance two systems ago.
Statutory reporting works but is fragile. Single Touch Payroll and superannuation submit successfully; the reconciliation behind them is manual and held by one person.
Why now
- —The vendor's support position on the current payroll version is the clock this is actually running against.
- —Nobody can state the current pay rules, which makes every enterprise agreement negotiation a technical risk rather than an industrial one.
- —Re-keying field hours each cycle is a recurring cost and the largest single source of pay correction.
- —Long service leave liability is an estimate, and the first person to challenge a payout will expose that.
- —Only the first of those is a reason to change it this year. The others are reasons to do it properly when you do.
What that scope actually implies
5 areas picked, 29 topics in scope across 6 modules
The streams these picks sit on cross into Security & Identity, Financial Accounting, Integration, PMO & Programme Governance. Nobody picked those, and the work still happens there.
The end-to-end it sits on
Hire-to-Retire
Human Capital Management
Time-to-Pay
Human Capital Management → Financial Accounting
Benefits & Compliance
Human Capital Management
Migrate-to-Steady-State
Data & Analytics → Integration
Plan-to-Cutover (Go-Live)
PMO & Programme Governance → Data & Analytics → Integration
Deliberately out of scope
Exclusions cause scope fights when they are assumed rather than written. Each one here has the reason attached.
Recruitment and onboarding
Deliberately later. It depends on the position structure this release establishes, and adding it now doubles the change load on the same HR team.
Learning, performance and talent
Out for this release, and the model flags them as dragged in by the hire-to-retire stream. That is worth reading as a warning rather than dismissing: if the new system ships with them switched on, people will start using them unsupported.
Finance
Out of scope, in scope as an interface. The payroll journal and the net pay file both land in finance, so not changing finance still means testing finance — twice, because a failed journal is a month that does not close and a failed pay file is a pay day that does not happen.
The works and rostering system
Stays. Field hours and rosters originate there, which makes that interface the difference between this programme removing the re-keying or preserving it.
The boundary
Every system the finance core exchanges data with, and what happens to that interface. An interface with no disposition is an interface somebody will discover during testing.
Payroll journal
Rebuild
Period journal, costed to cost centre, project and activity→Finance system
The costing dimensions the journal carries decide whether labour can be reported against work. Getting this at the wrong grain is how an organisation ends up unable to say what a job cost.
Net pay and deductions
Rebuild
ABA direct entry file→Banking platform
The bank's own testing window is outside the programme's control and sits on the critical path. Book it before the plan is baselined.
Superannuation contributions
Rebuild
Contribution data and payments→SuperStream gateway and funds
Late or failed contributions attract the superannuation guarantee charge, which is not tax deductible. This is not an interface to leave until integration testing.
Single Touch Payroll
Rebuild
Pay event, on or before each pay day→ATO
Phase 2 disaggregates gross into components, so the wage type design and the reporting design are the same decision.
Field hours and rosters
Rebuild
Approved time, roster patterns, allowances earned←Works and rostering system
The highest-value interface on the programme. Today this is re-keyed, and the re-keying is the largest source of pay correction. If it is carried rather than rebuilt, the business case loses most of its benefit.
Employee master to downstream systems
Rebuild
Starters, movers, leavers and position data→Identity, access and operational systems
The model drags security into scope for exactly this reason. Access that is not provisioned and revoked from the HR record accumulates, and mover is the case usually missed.
Workers compensation declarations
Rebuild
Declarable wages by jurisdiction and classification→Scheme insurer in each jurisdiction
Its own wage definition, per state. Build it as a mapping on the wage type, not as an annual reconstruction.
Portable long service scheme returns
Not decided
Service returns and levies→State portable scheme, where the industry is covered
Whether any part of this workforce is covered has not been settled. The obligation exists whether or not anyone has claimed, so it is a question to close before design rather than after.
Flows the model says straddle this boundary
Derived from the scope, not written here: hand-offs where one side is being changed and the other is not. Compare them against the boundary list above — anything present here and missing there is a gap.
Payroll journal←Payroll
General Ledger · per pay run · without it: Labour cost is missing from the period and the month cannot close.
Payroll journal→General Ledger
Payroll · per pay run · without it: Labour cost is missing from the period.
Net pay file→ABA
Payroll · per pay run · without it: Staff are not paid.
Opening balances and master data→General Ledger
Data Migration · at cutover · without it: The new ledger opens on numbers nobody can reconcile to the old one.
What this context does to a generic finance build
The enterprise agreement is the specification
Rebuilding pay rules from the old system copies a decade of undocumented modification into a new platform. They have to be rebuilt from the instrument — the current agreement and the award that underpins it — and the gap between the two is the single most valuable output of this programme. Expect that audit to find rules nobody can justify and rules nobody knew existed.
Allowances are where the effort is
On-call, standby, callout, travel, higher duties, and the interaction between them on a public holiday. The base rate is configured in an afternoon; the allowance interactions are weeks, and they are what people notice when they are wrong.
Payroll tax is eight obligations, not one
A state tax with its own threshold, rate and grouping rules in each jurisdiction, assessed separately in each. The taxable wage base rarely matches gross pay, so the mapping belongs on the wage type as a reportable classification rather than in a spreadsheet at lodgement.
Long service leave rests on service history
A state entitlement with a different accrual, qualifying period and pro-rata threshold in each jurisdiction, and in some industries a portable scheme where the entitlement follows the worker. It is calculated from continuous service, which is the data most likely to have been lost in a previous migration.
Workers compensation is its own wage definition
A different scheme with a different premium basis in every state, declared on a wage definition that matches neither payroll tax nor superannuation. The industry classification it is rated on is usually set once at registration and never revisited.
Federal obligations do not vary
Single Touch Payroll, the superannuation guarantee and the Fair Work modern award system are national. They are not the part that changes at a border, which is exactly why the state obligations above are the ones that get missed.
Public sector workforce reporting
Establishment, headcount, executive remuneration and workforce composition are reported externally on definitions set outside the organisation. The position structure has to support those definitions natively, or the reporting becomes another spreadsheet.
The order to do it in
The grouping is computed from the model's dependency edges. The goal and the exit condition for each release are a delivery judgement.
Establishment
Data Migration · Core HR
Core HR standing on an agreed organisation and position structure, with employee master data migrated and its ownership named, and cutover being rehearsed rather than written.
Done when Headcount and establishment reported from the system and agreed to the current external return, with service history verifiable for the longest-serving employees.
Time and entitlements
Benefits · Time & Attendance · Talent Acquisition · Learning & Development
Time capture live for both office and field, rosters and allowances interpreted from the agreement, and leave — long service included — accruing under the rule for where each employee works.
Done when A full cycle of field hours flowing from the works system with no re-keying, and long service leave recalculated from service history rather than carried as a balance.
Payroll
Payroll
Payroll live with statutory reporting, after parallel runs that agree, and hypercare covering the first end of financial year.
Done when Consecutive parallel runs agreeing to the cent on gross, net, tax, super and every allowance — with the differences that remain explained and accepted, not averaged away.
Then
4. Cutover & Go-Live
The dependency order puts 1 more phase after the narrated releases.
The model also flags Programme Governance as depended on but not included. Fine if it is staying as it is — a gap otherwise.
Decisions to settle
What do the pay rules actually say?
Everything. Rebuilding from the old system copies undocumented modification forward; rebuilding from the instrument means an audit that will find rules nobody can justify. One of those is a programme, the other is a migration.
By: Before configuration starts, and resourced as its own piece of work. · Award Interpretation
Is the establishment position-based or person-based?
It determines whether the structure survives people leaving, whether access can be provisioned from a position, and whether workforce reporting works without manual assembly.
By: Before core HR is configured. Changing it later re-levels everything beneath it. · Org and Position Management
Where does field time originate?
The works system, a new time system, or a form. This is the difference between removing the re-keying and preserving it, and it is most of the benefit in the business case.
By: With scope, because it decides whether operations is a stakeholder or a workstream. · Time and Attendance
Who owns the employee master?
One system has to be right about each attribute. Left undecided, HR and payroll diverge within a quarter and the reconciliation becomes permanent manual work.
By: Before the first interface is specified. · Core HR
How many parallel runs, and what makes one pass?
Parallel running is the gate, not a test. Criteria set in advance are the only thing that stops a run with unexplained variances being declared successful because the date is close.
By: At mobilisation, because it sets the length of the tail of the plan. · Payroll
Which jurisdictions do we employ in, and are any covered by a portable scheme?
Payroll tax, long service leave and workers compensation are all assessed per state. An employer over the line in three states has three of each, and a portable scheme adds levies whether or not leave is taken.
By: Before entitlement rules are configured. · Long Service Leave
Who runs the pays while the programme is running?
The people who know the rules are the people who pay everyone every fortnight. Without funded backfill, the programme runs on their evenings and the pay run is what slips.
By: Before mobilisation, with the budget. · Digital Transformation Readiness Checklist
Risks worth writing down
Pay rules are rebuilt from the old system rather than from the agreement.
So: A decade of undocumented modification is carried into the new platform, and the organisation still cannot state its own rules.
Instead: Fund the interpretation audit as a deliverable in its own right, against the current instrument, and treat every rule with no traceable basis as a decision rather than a fact.
Service history is migrated as balances.
So: Long service leave cannot be recalculated, audited or defended, and the first contested termination payout exposes it.
Instead: Migrate service, not balances. Verify continuous service for the longest-serving cohort before the first trial load, and reconcile the recalculated entitlement to the ledger provision.
Field allowances are discovered during parallel running.
So: The tail of the programme extends by months, and the first live pay run corrects people who are already unhappy about the change.
Instead: Work the allowance interactions early with the crews who earn them, using real rosters including public holidays and callouts, before the base pay rules are signed off.
Parallel running is treated as a test rather than a gate.
So: Go-live on a run with unexplained variances, and every variance becomes a live pay defect affecting a real person.
Instead: Set pass criteria before the first run, require consecutive passes, and make no-go a genuine option at the gate.
Talent, learning and performance arrive switched on but unsupported.
So: People start using modules nobody has designed, trained or resourced, and the data in them becomes something the organisation later has to trust.
Instead: Decide deliberately what is enabled at go-live. Out of scope has to mean switched off, not merely unmentioned.
Access is not provisioned from the HR record.
So: Starters wait, leavers keep their access, and movers accumulate the union of every role they have held — which is the audit finding.
Instead: Treat joiner, mover and leaver as one designed process across HR and security, with mover tested explicitly because it is the case usually missed.
Readiness
Current industrial instruments collected
gap
The current enterprise agreement, the underpinning award and any side letters, in one place, as the basis for interpretation.
Written statement of existing pay rules
gap
Almost never exists. Its absence is the largest single unknown on this type of programme, and discovering it during design is the expensive order.
Service history verifiable
gap
Continuous service dates for the longest-serving employees, evidenced rather than carried forward.
Organisation and position structure agreed
unknown
Agreed by the business, not reconstructed from the payroll system's cost centres.
Payroll team capacity released and backfilled
gap
They run the pays. Without funded backfill both the programme and the fortnightly cycle degrade at once.
Jurisdictions and scheme coverage confirmed
gap
Which states employ people, which portable schemes apply, and which workers compensation scheme and classification in each.
Field workforce engaged
unknown
The crews whose allowances and rosters are hardest to model are usually the last consulted and the first affected.
The artefacts this programme has to produce
Each one has a guide behind it. The library is the general case; this list is the order it is needed in.
Award and enterprise agreement interpretation rule set, traced to the instrumentPayroll and HR
Organisation and position structure designHR
Employee master data model, with ownership per attributeHR
Pay component catalogue, mapped to the ledger and to STP Phase 2Payroll
Field time and roster interface specificationPayroll and operations
Leave and long service leave rules per jurisdictionPayroll
Payroll tax registration, wage mapping and grouping positionPayroll and finance
Workers compensation declaration basis and classification reviewPayroll and risk
Superannuation and Single Touch Payroll reporting setupPayroll
Service history migration and reconciliation planPayroll and data
Parallel run plan, with pass criteria set in advancePayroll
Joiner, mover, leaver process with access triggersHR and technology
Change impact assessment, by role and including field crewsChange
Argue with it
The scope, the phase order and the straddling interfaces are all computed from the model. If a phase looks wrong, the dependency edge behind it is the thing to change — say so here.