CIPP FUTURE OF PAYROLL REPORT 2019
International payrolls This year’s data reported that the payroll function continues to include international payrolling in its role; this equated to 26% which was up from 21% from last year. Amazingly, this covered over 70 countries ranging from Canada to New Zealand, but the assumption is that it’s probably a lot more than just 70 . This is a very specialist area and fraught with risks and issues if not executed correctly; are you promoting the fact that you do this with your stakeholders and if not, you should be? Also, how good is your set-up and control around this area; one to consider if you are not already? Outsourced versus in-house The survey this year was very similar to the results that were returned last year. The overwhelming majority ( 72% ) are still being operated completely in-house. The remaining elements were split by either partially outsourced (partially managed) ( 22% ) and completely outsourced (fully managed.)
It appears that even companies around the world who are increasingly cost conscious still value the ability of having their payroll performed by in-house professionals.
Last year the survey stated:
“WITH UK PAYROLL TRAINING BOTH ACCESSIBLE AND FREQUENT, THERE IS MORE CONFIDENCE AND KNOWLEDGE WITHIN THE INDUSTRY TO SUPPORT ORGANISATIONS OPERATING THEIR PAYROLL IN- HOUSE”
Furthermore, the report stated:
“TECHNOLOGICAL ADVANCEMENTS THROUGH CLOUD COMPUTING HAVE ALSO MADE RUNNING PAYROLL IN-HOUSE MORE EFFICIENT.”
Is this correct or has payroll become something you just don’t touch unless it’s broken? Yes, technology has made things more efficient but has it really? We asked respondents how effective technology enables them to be compared with how effective they want to be, 50% of respondents stated that their technology makes them less effective. This could be for a number of reasons, some of which can be explored within the software and technology section of this report.
Furthermore, we will also look at systems and software as the trends for 2019 and onward will be all about digital transformation i.e. adopting emerging technology faster.
Human resources or finance? Whilst there is still a divide on the above question, there has been a slight change in the picture from last year’s return. Finance ( 45% ) still appears to be the main place where payroll resides compared to last year where it was 64% ! However, it appears that there is a new player on the block which is the standalone payroll department ( 16% ) with the remainder sitting in HR.
The CIPP is recommending that payroll is a standalone department within a business, which works closely with both HR and finance. Reasons for this include:
1. Controls - inherently today most of the employee data comes from HR and invariably the payment comes from or is sanctioned by finance. It would make absolute sense to ensure that there are control points between the three functions to reduce payroll fraud (UK Fraud Bill for 2017 estimated at £17 Billion with ghost employees being the main point of failure.)
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