TECHNOLOGY
The evolution of payroll professionals: where are we now and what’s in store?
John Pearce, senior vice president, global payroll at CloudPay, discusses the evolution of technology in the payroll space, and how it could be improved further
P ayroll professionals are the life- blood of businesses. Without them, staff won’t get paid, meaning work won’t be done and business operations fail. The function has existed as a crucial element of the day-to-day activity of a company for so long that it’s arguably often taken for granted. In fact, the term ‘payroll’ was first used back in the 1750’s. Slow technological progression Advances in technology have played a role in the evolution of payroll and the requirements of the people working in the profession. Automation and software have streamlined many of the repetitive tasks, but I would argue that payroll processing hasn’t kept pace with digital transformation in business generally. Migration to the cloud has been slow, despite the revolution in software and tech capabilities. The same applies to how payroll payments are made. Treasury functions are still reliant on legacy infrastructure and the complex banking system, with little digitisation in the way transactions are made and employees receive their wages. The innovative tech movement: pay on demand and pay to card Despite payroll’s slow tech progression, we’re starting to see a move to innovative technology that’s more akin to a consumer digital experience. Pay on demand and pay to card give employees more control of managing their own cashflow, allowing them to instantly access their earned wages when they need them, via a mobile app. In a sense, it’s allowing employees to use their earned wages as a ‘digital ATM’.
This trend has picked up pace during the current skills crisis that’s facing the UK. For payroll teams, this shift has led to a new thought process in how the outputs of the function are used by the business, namely how payroll can be used as a talent attraction and retention tool. Giving staff the ability to draw down a portion of their wages before the official payday is deemed as a significant employee benefit, particularly during a cost-of-living crisis. Professionals in the sector are, as a result, having to think beyond the usual systematic processes, to include what impact payroll has on staff beyond day-to-day expectations. This move to pay on demand is certainly something that’s caused some disruption. Interestingly, we’re battling with a misconception across the profession that this development will create more work for already over- burdened payroll teams when, in fact, the use of mobile technology and new instant payment methods reduce workloads. Payroll globalisation Globalisation and a move to ‘borderless’ business operations have also shaped new Giving staff the ability to draw down a portion of their wages before the official payday is deemed as a significant employee benefit
requirements for payroll professionals. In one sense, the pandemic opened up borders for organisations. Mandated remote working shifted views on the need to have staff physically in an office and, subsequently, more employers looked internationally for talent. This has created a new challenge for payroll professionals. Businesses need to have a global payroll system that unifies their data, processes and teams. For many organisations, this will necessitate a move from fixed information technology infrastructure in multiple countries to a cloud-based global software model that will scale with business expansion. Evaluation metrics Payroll evaluation metrics have also begun to evolve from the standard service level agreement and we expect to see this continue as a key trend in the immediate future. In fact, in our own Payroll Efficiency Index Report , we took a look at the metrics that really matter: first time approvals, data input issues, calendar length, supplemental runs and issues per 1,000 payslips. When these data points are analysed together with the impact of talent availability and the level of software maturity in a given country, we can gain a clearer picture of where there’s room for improvement. Payroll professionals have already begun moving to greater efficiency analysis as the function’s responsibilities and capabilities have changed. The sector has come a long way, but technological change has been slow to date, with the pandemic prompting the sector to play catch up. In order to provide truly modern solutions, we need a fast pace of change. n
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| Professional in Payroll, Pensions and Reward |
Issue 84 | October 2022
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