Feature insight - keeing the UK paid
In what ways do you see the function developing in the future? Will it become a whole new department as it moves closer or merges with HR and reward? JD: The advent of artificial intelligence sees payroll moving further into the technology space. Chat bots are already the norm for most large cloud-based systems and with HMRC ever-evolving systems and changes to legislation I can only see payroll becoming a larger remit for employers. There are often two schools of thought with regards to where payroll should sit, one being the HR function, the other being finance. I actually see it becoming more and more likely that it will sit on its own as more and more employers move to HCM systems. Payroll naturally then becomes closely linked with IT, finance, HR and BI [business information] teams due to the very nature of the product and the service that it has become. MJ: I think technology will draw them closer together and we’ll see HR and payroll operate much more symbiotically, allowing them to simplify critical business services such as payments and compliance. Sitting closer to HR will empower payroll professionals to enhance the way that they personalise the function. They will be able to create relevant, individualised interactions based on each employee’s situation and needs, enhancing their experience. Payroll teams will also have access to tools that will allow them to interact directly with employees and ensure their feedback is acted upon, making them far more aligned to the needs of the business and the people working within it. GK: Automation, artificial intelligence and other advanced technologies are streamlining processes throughout every profession, and payroll is no exception. Typically, payroll has been predominantly operational with most tasks being manual and repetitive. Yet, as technology advances and becomes more accessible for organisations, payroll may find itself in a position where they need to evolve to focus more on employee experience and the human, emotional element of work. Payroll professionals could see themselves more involved in workplace wellbeing, such as helping to improve mental health by supporting and educating employees about managing their finances. SP: The payroll function will become more
businesses has increased and organisations are increasing the use of benefit and reward packages. This has resulted in the payroll professional becoming an important factor in the financial planning of a business. The payroll function is required to undertake and deal with the complexities of compliance in addition to being able to manage and consult on good use of human resource planning that impacts pay and taxation. In what ways does the payroll function now operate strategically for the organisation? JD: Automation-driven payroll systems provide a vast repository of analytics allowing the business to make key decisions over best use of resource and expenditure and allowing thought processes to holistically grow and envisage the next step in strategic insights for expansion of the business. A good payroll system with the right reporting functionality, trained and used in the correct way, can provide a competitive advantage to any business. Payroll analytics can often predict trends in recruitment, resource gaps and even show career succession paths for key roles. GK: Payroll has made positive steps towards being able to offer strategic insight, but it still requires further skillsets to be able to fully operate as a strategic function for the organisation. If payroll is to align activities to assist with strategic decision making and performance improvement, data analysis skills will be required. It’s important that the profession adopts technology and automation tools to release staff from repetitive and manual operational tasks to develop the analytical skills for the future. JD: It’s imperative that any organisation looking to succeed in their chosen field has strong payroll representation on the board. Payroll is one of, if not the biggest, expenditures for a business and understanding the requirements for growth means that payroll must be represented. Payroll cannot function and give the business the .01% extra it often needs without buy-in for system enhancements and improvements. The payroll department will often have a wish list from clients of what they require and naturally will know Should payroll be represented on the board or c-suite?
first-hand what functionality is required. To omit payroll from the board would be a failing for most businesses. MJ: If the payroll function is not represented on the board then it should certainly have close relationships to those who are. By playing more of a strategic role, it can make it easier for business leaders to understand the total cost of ownership of the employee base, as well as helping employees to understand the total reward packages available to them. ...increasingly rely on data and analytics provided by payroll teams to inform how they structure, manage and engage employees GK: Interestingly 36.45% of respondents from the CIPP’s Future of Payroll Report said payroll was represented at board level. Now, whether this is directly as a payroll director or through HR and/or finance director roles still needs to be defined. If payroll wants to succeed at getting more representation at board level, as a separate function, then they need the time to focus on gaining the skills to be able to offer strategic insight from the wealth of information that is readily available at their fingertips. Unfortunately, gaining these skills isn’t the only barrier payroll faces, as most organisations need to change their mindset of what value the payroll department can bring and see that it is more than just a cost-centre. SP: Business and department leaders are going to increasingly rely on data and analytics provided by payroll teams to inform how they structure, manage and engage employees. Yet recognising that the payroll department holds this critical data and taking advantage of it are two very different matters. It is therefore essential that the payroll function is represented on the board or c-suite to ensure that the expertise of payroll is available for strategic decision making. Understanding the human cost is essential to ensuring the profitability and longevity of any business.
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| Professional in Payroll, Pensions and Reward |
Issue 53 | September 2019
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