4 Latest Payroll Trends That You Will Be Curious About
18 Mar 2021
In Ernst & Young’s (EY) annual global survey of CEOs, they have identified human capital management as the single greatest challenge for long-term business growth. In fact, payroll cost is one of the biggest fixed costs that organisations are able to control. Yet few organisations are able to take advantage of payroll data analysis to ensure that the investments they make into their human resources are smart ones, while ensuring that it aligns with their succession planning and long-term strategic business goals.
It is not surprising to find organisations working on outdated payroll systems. Recently, the Australian arm of UK cosmetic company Lush admitted to payroll lapses dated back to 2010, owing its staff up to AUD2 million due to outdated payroll software. A survey conducted by the American Payroll Association (APA) and Kronos also found that nearly half of the employers were not tracking key performance indicators in their payroll departments due to outdated manual processes and payroll systems. The survey results also showed that employers want digital payroll solutions that are intuitive, such as self-service options for employees, on-demand reporting and analytics, tracking of seasonal and freelance workers, and allowing other functions including senior management and finance to include payroll data in their own reports.
How well and quickly payroll can serve employees has a huge impact on the organisation’s engagement, branding, and productivity. An investment in HR technology, specifically payroll, can help to alleviate some of the common payroll challenges while enhancing the overall employer and employee experience.
Here are 4 payroll trends to look out for:
Automating payroll processes
Payroll function has traditionally been seen as a backend and administrative function. With technological advancements and the rise of digital solutions, digital tools and artificial intelligence solutions are gaining traction within the payroll function. According to EY 2019 Global Payroll Survey Report, more than 50% of organisations have stated that they have a cloud-based human capital management (HCM) platform in place. Close to half of organisations also plan to use artificial intelligence solutions and chatbots for payroll processing and interaction with employees. Leveraging on payroll digital tools can help to drive accuracy in terms of payroll calculations and keeping HR up to date in terms of regulatory changes. With payroll software being highly intuitive today, changes in payroll legislations or even payroll calculation errors are easily flagged out by the system, allowing payroll staff to quickly rectify any mistakes.
Enhance payroll accessibility and data integrity
Cloud-based payroll platform also means that payroll functions are not limited to the office or workplace. With the power of cloud-based payroll platform, this means that employee and payroll data can be securely stored on the cloud and easily accessible via a device that can be connected to the internet. This literally means being able to access and process payroll via laptops, tablets or even mobile phones. For small businesses within the F&B and retail industries, readily-accessible cloud-based payroll platform allows them to easily facilitate payroll processing for employees and contingent workers. Similarly, leveraging on cloud-based payroll platform allows organisations to integrate the various payroll stages into a single-access platform, from pre-payroll processing, payroll calculation through to salary disbursements and statutory filing. Besides making payroll more intuitive by enhancing accessibility, it also ensures a highly-secure data environment, which ensures that payroll data is not subjected to data leaks or fraudulent activities.
Focus on the employee experience
With the changing workforce demographics, and along with it the evolving mindsets of Millennials, payroll is taking an active role in driving a positive employee experience today. Organisations are beginning to view payroll as an integral component of the overall employee value proposition. And there are various payroll strategies in which organisations can take to enhance the overall experience. Based on EY’s 2019 Global Payroll Survey, they found that many organisations are considering implementing an inquiry management system to enhance employees’ ability to log and track their question to payroll and HR. Other tools which organisations are considering include shared mailbox, case management system, and call centre.
Another key area that organisations can focus on to enhance employee experience is the use of self-service functionality. Allowing employees to view, interact and perhaps “own” their HR and payroll data can significant boost the overall employee experience. Concurrently, this improves employer and manager ownership to ensure that data is accurately and timely entered and reflected within payroll systems for effective downstream impacts.
Predictive payroll for decision-making
With the extensive payroll data available, it is easy to leverage on this stet of readily-available data to forecast headcount and payroll expenses. For most organisations, a significant chunk of time is lost through data collation and verifying the accuracy of this data. Thanks to technological advancements, most payroll software such as Software-as-a-Service (SaaS) have in place a dashboard that will automatically chart historical payroll expenses, new hires and terminations. This helps payroll staff to analyse headcount and payroll trends, leveraging on these insights to facilitate strategic business decision-making around HR and payroll.