Transitioning to a new payroll software can be a daunting challenge that many businesses encounter. We asked several experts, including a president and a developer to share their insights on avoiding common pitfalls. The article begins with advice on addressing the human element and concludes with strategies to avoid data errors, offering a total of nine valuable insights.
Read on to discover the lessons learned and expert advice for a changing your payroll software.
When it comes to digital transformation in payroll systems, the greatest challenge isn’t technical—it’s human. Michael Hurwitz, President and Co-Founder of Careers in Government, underscores this often-overlooked reality, drawing from his experience modernising a legacy platform to serve over 21 million public sector job seekers.
“The most common mistake is rushing the implementation without proper data validation and employee training,” Hurwitz explains. “Organizations often focus on the software transition but overlook the critical need for parallel testing and comprehensive staff preparation.”
During a major system upgrade, Hurwitz and his team took an approach many might consider tedious but essential: running old and new systems simultaneously for three months. This parallel testing period revealed critical data mapping issues that, if unnoticed, could have impacted hundreds of employees. “This upfront effort prevented major disruptions and ensured accurate payments throughout the transition,” he says.
For businesses considering a payroll overhaul, Hurwitz advises a measured approach:
“A successful payroll transition isn’t just about software,” Hurwitz concludes. “It’s about maintaining trust with your employees through uninterrupted, accurate payments.”
By prioritising these steps, organizations can navigate complex payroll transformations with minimal disruption while reinforcing employee confidence.
Transitioning to a new payroll system presents unique challenges, and one often-overlooked risk is cybersecurity. Steve Payerle, President of Next Level Technologies, warns that many businesses underestimate the dangers of transferring sensitive employee data without robust security measures.
“I’ve seen organisations face data breaches during transitions due to inadequate security protocols,” Payerle explains.
“To mitigate these risks, it’s crucial to conduct a comprehensive cybersecurity audit before and after implementing the new system" - Steve Payerle
Drawing from his own experience, Payerle highlights the importance of partnering with experts. “When we onboarded a new platform, we worked with a cybersecurity firm to run penetration tests, ensuring the data transfer was secure and compliant with industry standards. This proactive approach protected us from potential threats and maintained trust with our employees,” he says.
Payerle also emphasises the role of communication in smooth transitions. “We established a dedicated helpdesk team to address employee concerns and questions about the new payroll system. This greatly reduced confusion and errors.”
For a seamless and secure payroll system upgrade, Payerle recommends:
“Ensuring everyone understands the process and feels supported goes a long way in a smooth transition,” Payerle concludes. By combining strong security practices with open communication, businesses can safeguard sensitive data and build employee confidence during payroll transformations.
Compliance issues are a common and costly challenge when transitioning to a new payroll system. Gal Cohen, Business Development Leader and Field Area Manager at JDM Sliding Doors, highlights how small misalignments can quickly spiral into significant problems if overlooked.
“When we first upgraded our system, we assumed everything was set up correctly to meet regulations, but small misalignments became big headaches,” Cohen recalls. “The biggest issue was employee classifications not being mapped properly, which impacted payroll taxes and reporting. This led to notices from tax authorities, and we had to scramble to fix it.”
One critical oversight was the system’s failure to account for recent updates to local labour laws. “Overtime pay wasn’t calculated accurately for a specific group of employees,” Cohen explains. “We were non-compliant without realising it, and correcting the payments and adjusting filings took significant time and energy.”
To prevent similar issues, Cohen advises businesses to adopt a proactive and thorough approach:
Cohen shares that during parallel testing, his team uncovered discrepancies in overtime calculations that didn’t reflect recent legal updates. “Fixing these issues during testing saved us from penalties and unnecessary complications later on,” he notes.
For a smooth and compliant payroll system transition, Cohen emphasises preparation and vigilance. “Taking the time to address compliance issues upfront is an investment that pays off in avoiding costly disruptions and maintaining trust with employees and regulators alike.”
Transitioning to a new payroll system is often viewed as a back-end process focused on efficiency and cost savings, but its success hinges on effective change management for employees. Mike Kohn, Chief People Officer at Kevel, stresses the importance of addressing how these changes impact the broader employee population.
“After a change, employees need to take new steps to manage things related to their take-home pay—the primary reason they work,” - Mike Kohn
Kohn explains: “Addressing this upfront is a key aspect of the transition.”
Drawing from experience, Kohn outlines an effective communication strategy that includes:
“By the time we got to the rollout, it wasn’t all smooth,” Kohn admits. “But because employees understood the rationale for the change and felt we had their best interests at heart, they were able to successfully transition without significant headaches.”
Kohn emphasises that success always comes back to change management and recognising the people affected. “Thinking about the people on the other end ensures smoother transitions and builds trust,” he concludes.
For businesses undertaking similar upgrades, incorporating transparent communication and prioritising employee concerns is critical to ensuring a seamless and successful transition.
When implementing a new payroll system, integration with existing software is often touted as seamless—but reality can tell a different story. Tyler Hall, Developer at TROYPOINT, recalls a challenging experience where integration testing revealed unexpected compatibility issues between their old accounting software and the new payroll platform.
“These compatibility issues weren’t mentioned in any sales pitch,” Hall shares. “We ended up needing to write custom API scripts to bridge the gap, which added three weeks to our timeline and extra costs we hadn’t budgeted for.”
Hall’s key takeaway from this experience is clear: thorough integration testing is essential. “I always tell companies to test every single integration point with real data before committing to a new system, even if the vendor claims it’s plug-and-play,” he advises.
To avoid similar pitfalls, businesses should:
By taking these precautions, organisations can avoid costly delays and ensure their systems work harmoniously from day one. As Hall concludes, “Investing time upfront to test integrations can save significant headaches and unexpected expenses down the line.”
Switching to a new payroll system might seem straightforward on paper, but the reality is often far more complex. Rodney Warner, CEO and Founder of Connective Web Design, highlights how businesses frequently underestimate the time needed for employees to adapt.
“Even if the system is pretty straightforward, there’s always a learning curve,” Warner explains. “If people aren’t trained properly, you end up with mistakes, delays, and a lot of frustration.”
Warner shares how his team initially skipped a comprehensive training plan—a decision that quickly led to confusion and errors. “The solution was simple,” he says. “Invest in training right from the start and offer help as everyone gets the hang of things.”
Warner’s advice for ensuring a smoother transition includes:
“Taking the time to train everyone properly will save you a lot of headaches later,” Warner concludes. By focusing on thorough preparation and support, businesses can set their teams up for success with any new payroll system.
For businesses with departments operating on varied pay cycles—weekly, biweekly, or monthly—finding a payroll system that accommodates this flexibility is essential. Simon Brisk, Founder and SEO Strategist at Click Intelligence, reflects on the consequences of overlooking this critical detail.
“In one transition, the new system couldn’t handle multiple frequencies,” he recalls. “Departments accustomed to weekly pay faced significant delays, which impacted morale and productivity. Timing the change midyear also created compliance headaches.”
The lesson Brisk draws is clear: flexibility is non-negotiable. His approach to avoiding such disruptions includes researching payroll providers thoroughly, testing system compatibility, and asking detailed questions during the selection process.
“System flexibility isn’t just a bonus—it’s a necessity,” Brisk adds. A well-researched decision upfront prevents cascading issues, ensuring a smoother transition and sustained employee satisfaction.
When transitioning to a new payroll system, the complexities of data migration and integration are often underestimated, warns Geoff Sokol, Private Wealth Advisor at Grow Think Investment Management. Issues such as incomplete or improperly formatted employee information can lead to discrepancies in payroll runs, creating frustration for both employees and management.
Sokol recalls assisting with a particularly challenging migration. “The data from the old system didn’t map directly to the fields in the new system,” he explains. “This caused errors like incorrect tax withholdings and missing benefits data, delaying payroll processing for several cycles.”
The solution? A meticulous pre-migration audit. “Rushing the process or underestimating its complexity can cause major disruptions,” Sokol advises.
To streamline data migration, Sokol recommends:
By approaching data migration with care and preparation, businesses can avoid costly errors and maintain seamless payroll operations. “The key is to treat data migration as a critical part of the transition, not an afterthought,” Sokol concludes.
Transitioning to a new payroll system should be a clean slate, but data errors can quickly turn it into a nightmare. Gary Gray, CEO of CouponChief.com, underscores the importance of getting employee details—like tax information and pay rates—100% correct before handing over data to the new provider.
“Mistakes in payroll data can lead to all kinds of problems,” Gray warns.
“You need to make sure everything is accurate and up-to-date to eliminate room for error.” - Gary Gray
From his experience, timing plays a critical role. “Switching systems during a busy period only makes things more complicated,” Gray says. “Choosing a quieter time, when your HR team isn’t overloaded, will make the process much smoother.”
Equally vital is partnering with a provider that offers strong onboarding and ongoing support. “If issues pop up, having someone in your corner to help sort them out is invaluable,” Gray adds.
Gray’s key takeaways:
By addressing these factors, businesses can avoid the pitfalls of data errors and set the stage for a seamless payroll transition. “Preparation and timing make all the difference,” Gray concludes.
Changing to a new payroll system is no tiny undertaking, but with meticulous planning, extensive testing, and an almost obsessive focus on employee support, firms can push through. From ensuring data accuracy to addressing compliance and system flexibility, these leaders from our field highlight the importance of prep work. If you do the right work up front, they reassure, the system has a real chance to pay dividends on the other side of the changeover.
If you're looking for a solution that combines robust functionality with seamless onboarding support, consider ClockOn. With features designed to streamline payroll, rostering, and attendance, ClockOn ensures a smooth transition for your business. Contact us today to learn how we can help you manage your workforce with confidence.