56 | INNOVATION
Technology and data: unlocking the payroll of the future
systems using spreadsheets, journals are manipulated by hand and controls depend on individual effort, rather than system design. That approach is expensive and, more importantly, risky. Integration and automation as foundations, not enhancements Our starting point with any client is always the same: there should be zero manual intervention or manipulation of data in the payroll process, beyond the keying of payroll inputs into the client’s human capital management system. Everything after that should be an integration- based solution, which requires no human hands, just human eyes over review and approval. This begins with integration. Payroll needs to connect seamlessly with human resources (HR) platforms, finance systems and banking infrastructure. When payroll data flows automatically from HR systems, payroll journals post directly into enterprise resource planning platforms and payments are executed via secure integrations with banks, manual intervention is all but eradicated. The impact of this is significant: l fewer errors and exceptions
l better collaboration between payroll, HR and finance. Importantly, this approach also makes global payroll consistent. Clients benefit from common standards and controls, even where local requirements differ. The benefit to payroll people Too often, the benefits on the wellbeing of an organisation’s payroll people of true global payroll technology and process are overlooked. We still exist in a world where it’s accepted (often even expected) that payroll team members will plan holidays around payroll cycles, and even then, will take laptops to ‘just keep an eye on things’ and ‘do a quick approval at the right time’. When technology is treated as the core of the operating model, rather than various bolt-ons to manual processes, the impact is staggering. Global standardisation and consistency deliver the opportunity for learning, development and for (international) colleagues to cover for one another. Precious time out of the office, finally means ‘out of the office and not working’. At the same time, the risk of ‘single point failure’ in times of unplanned absence (it’s true, even payroll people get sick sometimes!), is massively reduced.
Mike Loydon
Global Payroll Services Leader, PwC
I n the first article in this series, we explored how increasing workforce regulation is raising the stakes for payroll and placing greater emphasis on accuracy, governance and control. In the second, I reflected on how the role of payroll has evolved over the last 20 years, from a largely transactional function to one that sits at the centre of the organisation’s relationship with its workforce. This third article builds on those themes and looks forward. It focusses on the roles technology and data play in enabling what many now refer to as the payroll of the future: payroll that’s resilient, integrated, insight-led and capable of supporting increasingly complex global workforce models. The starting point: getting the basics right, every time For all the discussion about digital transformation and advanced analytics, the fundamentals of payroll haven’t changed. People must be paid accurately and on time. When that doesn’t happen, trust is lost very quickly, with employees, regulators and senior stakeholders alike. What has changed is the level of complexity pay teams are expected to manage. Globalisation, new employment models, increased regulatory scrutiny and more demanding reporting expectations have stretched traditional payroll solutions to their limits. The end goals might be the same, but the journey to get there is, and needs to be, very different. One of the realities we see consistently is that many payroll operations, even in large organisations, still rely heavily on manual processes. Data is often passed between
l faster processing cycles l reduced operational risk
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