FUTURE OF PAYROLL REPORT
CIPP foreword
Payroll is an evolving profession, it is completely different now to how it looked when I started my career in payroll and joined the Institute back in 1983. This research goes some way to predict the future of payroll, anticipating developments based on the responses provided by you, the professionals working in the industry. It is encouraging that the payroll professionals represent 2.3 million employees being paid in the UK. With the majority of organisations indicating that they have up to five individuals within their payroll teams and payroll reporting into finance departments, it would be interesting to see if this shifts more towards HR with changes in legislation such as gender pay gap reporting, especially if this is introduced within organisations with fewer than 250 employees as is currently being suggested by the government.
KEN PULLAR CHIEF EXECUTIVE OFFICER, CIPP
Payroll complexity is often referred to, but this report suggests that the complexity within payroll is not influenced by the number of employees on a payroll, but by factors such as flexible working arrangements and increased benefit provisions through automatic enrolment and salary sacrifice arrangements. These areas of payroll are relatively new to the function, and payroll professionals should be thinking about how they can influence their business strategy and employee well-being through the introduction of such initiatives within their organisation. As these benefit strategies grow in importance, and more people think about payroll being more than just a number on a payslip, it would be interesting to see if there is a shift from payroll reporting to finance towards payroll reporting to HR, or even better, being recognised as a strategic department in its own right that can contribute positively to both HR and finance. We cannot escape the fact that technology enhancements is impacting every element of our personal and working lives, and will continue to do so. This report recognises that payroll professionals believe that technology is making them more efficient, but that there are further efficiencies which could be gained through integration with finance and HR systems. It is interesting to see that the lifecycle of payroll software is between five to ten years; will this have an impact on the future of payroll if the department is using outdated technology and legacy systems? Finally, the report highlights that payroll professionals are excellent at keeping up to date, they have to be to comply. However, it is concerning to the CIPP and the profession overall that 55% of respondents do not have a succession plan in place for their payroll department. Payroll knowledge tends to be with a few individuals within an organisation and I encourage all businesses to review their succession plan for payroll. The modern day ‘payroller’ has a very demanding role and a very important one; they are instrumental in an organisation when it comes to ensuring compliance with legislation. The consequences of non-compliance are not just financially harmful through penalties, fines and even litigation; reputational damage can be even more detrimental to a business, especially in the long term. There is no doubt that the payroll professional of today has a wide remit and has both internal and external pressures to consider. It was evident that the people involved in payroll, regardless of the level, are passionate about their roles and take pride in what they do.
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CIPP AND WORKDAY
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