FUTURE OF PAYROLL SURVEY REPORT 2020
The advancement of technology within the payroll space, and the automation of the more administrative aspects of the jobs that payroll professionals undertake have been topics of discussion for some time now. Whilst historically, those working within payroll departments may have been fearful that this new way of working could be detrimental to their position and could end up eventually replacing them in their roles, the results of the Future of Payroll survey indicate that this perception is shifting massively, and that payroll teams are now embracing Artificial Intelligence (AI) and automation in the workplace. There were a selection of questions that dealt with the issue of whether or not technology will enhance the payroll profession in the future, and also some that assessed how far current technologies that have already been implemented have amended the way in which payroll departments operate.
When asked where payroll software was now hosted, responses ranged from 38% for cloud-based software, followed by 37% stating that it was hosted on site, and a further 25% confirming that payroll software was hosted on a client server. It could be anticipated that, due to the outbreak of coronavirus, which saw the number of employees working remotely increase significantly, even more businesses could benefit from utilising cloud-based software to better enable the payroll function to be accessed remotely, should the need arise in the future. When asked if AI and cloud technology had altered how queries are received into the payroll department, this seemed to be an area where payroll professionals have seen little change, and are still required to use more traditional methods of communication, such as emails and phone calls. This demonstrates that, whilst technology is rapidly emerging in the world of payroll, employees have yet to be convinced about responses from AI and prefer speaking to a person when they have questions, particularly when those queries relate to something as important as their pay.
38% host payroll software in the cloud
37% host payroll software on site
25% host payroll software on client’s server
It also demonstrates the need for payroll professionals to be proficient in customer service, and to constantly be trained and skilled in this area. 91% of respondents confirmed that they were using more traditional communication methods to respond to queries, with 7% confirming that they now receive queries via an online chat facility, that are responded to in a manual fashion. Whilst this latter finding shows the incorporation of an element of technological advancement, the liaison with the employee is still one that is human in nature. Only 2% of responders stated that, in their department, queries were received through an online chat facility with automated standard responses being sent via a chatbot.
of responders receive and deal with queries via a chatbot.
The responses to the question which dealt with the subject of automated business processing, or AI developing further to manage the transactional side of payroll reveals that the majority of people do believe that this will be the case. 86% stated that they saw this coming to fruition, with only 14% maintaining that automated business processing or AI will not develop to further manage the transactional side of payroll. By transactional, we refer to the more methodical processes that are repeated numerous times each payroll cycle, for example, the processing of starters and leavers, or changes to details. Technological advances will remove the requirement for payroll professionals to continue carrying out these monotonous tasks so that they can focus on more challenging duties, which involve using enhanced payroll knowledge, such as streamlining processes or dealing with employee queries, which, as we saw with the responses to the previous question, seem to still be dealt with by those working within the payroll department as opposed to being an automated process. It will also free up payroll professionals to dedicate greater time to more strategic activities. As payroll expands and tax and employment policy evolves, there is a greater need for increased interaction with other departments, such as Finance and Human Resources. Some of the recent changes to legislation have seen payroll professionals having to reach out to communicate increasingly complex legislation, which traditionally would not necessarily have fallen within payroll’s remit. Take the example of the off-payroll working (IR35) reforms, originally due to be implemented in the private sector from 6 April 2020, but now postponed to take effect from 6 April 2021 – historically payroll departments have had limited or no dealings with self- employed contractors, instead they would have been paid through the Finance department. The off-payroll working (IR35) reforms began in 2017 in the public sector, and have required enhanced and improved communication within organisations between procurement, IT, finance, HR and payroll. The new rules relating to off-payroll working in the private sector have meant that payroll professionals have had to grapple with a whole new type of employee, and
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