Feature insight - the future of payroll
Ian Hodson MSc ChMCIPPdip, head of reward/deputy director of human resources, University of Lincoln “Now, more than ever, payroll needs a place at the boardroom table. Payroll has historically fallen down the gap between HR and finance directorates, yet it is one of the most crucial functions in any business. “Payroll’s future lies in its ability to be agile in terms of reporting, dovetailing into cloud-based systems, adopting AI for the most basic functions and adapting to the needs to future generations of employees by providing them with the data and information they will expect to see. Payroll is ideally suited to integrate with HR systems so that the information exchange on attrition, recruitment and retention, absence and pensions information is available in real time to the employer. “A forecasting function that takes account of labour market trends and other issues, such as tax reporting and the GDPR [General Data Protection Regulation], is vital. In global businesses, employee mobility and currency payment, including crypto, is likely to increase and high levels of compliance, especially in BEPS [base erosion and profit shifting] jurisdictions, is essential.” Justine Riccomini MSc FFTA AIPA Chartered MCIPD ChFCIPP, head of tax (Scottish taxes, employment and ICAS tax community), Institute of Chartered Accountants Scotland Datamine “If payroll is to become a strategic business function rather than an operational one, then the way it handles data is going to be vital. “Historically there’s been a degree of separation between transactional finance or HR systems and payroll, with data copied across periodically from one to the other. Not only has this led to delays in using people data for decision making, but it also raises questions about the accuracy and integrity of the data. “We’re helping more and more organisations to use their HR system as the central point for people analytics, bringing together all people data into one place and securing it via a single security model. “In the last year, the GDPR has intensified the need for better management of payroll data and how people analytics should be delivered.
flood the workplace, traditional norms such as the monthly payroll cycle will become outmoded and expectations of ‘real-time’ salary payments will achieve greater prevalence. Initially, processes such as that offered by Wagestream may facilitate this transition, but over time blockchain and other emerging technologies will pick up the mantle. It may even be the case that other mediums of payment, such as cryptocurrencies, are introduced into the payroll space. “In the medium- to long-term, the introduction of robotics technology and AI will further automate and enhance the speed and efficiency of standard payroll tasks, but increasingly complex statutory and legislative requirements will fill the vacuum, further enhancing the importance of the payroll function.” Nick Phillips ChMCIPPdip , payroll project lead (Fit for the Future), Employee Service Centre, Leicestershire County Council “It’s a fascinating time to be involved in payroll. The latest thinking on the future of the profession is that it will need to extend its remit and align activities to assist with more strategic decision-making and performance improvement through data analysis. To achieve this, the adoption of new technologies and automation tools will
be essential to release staff from repetitive and manual operational tasks to develop analytical skills for the future. “To assist with this shift of focus, I expect robotic process automation (RPA) to become more commonly deployed to automate tasks like the distribution of payroll documents. AI will also assist, automating responses to routine employee requests. “There are also some interesting ideas emerging to assist with delivering great customer service to employees. Supporting employees with financial wellbeing is one, through pay on demand applications. A wider range of data analysis tools are also likely to emerge, to support payroll to interpret and report back at the level of detail required for decision making.” Glyn King, group managing director, Datagraphic ...payroll to interpret and report back at the level of detail required for decision making... Opportunity knocks “Over the next few years, I think we will see a real change in respect of the payroll function becoming far more proactively customer-focused and operating more intrinsically within the business to promote organisational agendas such as engagement, wellbeing and staff retention. We have seen more and more of the business activities centralised with the payroll team as a key partner to the operation of new benefits and also as a proactive communicator of many of the benefits available to employees in the workplace. “Alongside this, the technology to carry out the operational activities has become externally more integrated, highlighting the need for payroll professionals to not only be administratively organised and efficient but also to have a skillset that more lends itself to developing technologies, using data to inform actions and being able to get the most out of technology solutions. The future for payroll professionals is incredibly positive with many more doors and opportunities open than ever before.”
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Issue 47 | February 2019
| Professional in Payroll, Pensions and Reward |
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