Feature topic - Technology enhances the role of payroll professionals
What’s driving the demand for agile payroll?
Abigail Vaughan, chief operating officer, Zellis, discusses the issues and foresees the future
A s in all areas of life and work, the covid-19 pandemic has brought about huge change in the payroll space. Payroll teams have come under more pressure than ever as they cope with extra complexity brought about by new legislation, such as the UK’s coronavirus job retention scheme and Ireland’s employment wage subsidy scheme. While most are doing exemplary work keeping their company’s ‘HR lights’ on, all too many are also battling a punishing array of day-to-day difficulties, from providing cover for sick colleagues to intermittent internet connections and poor access to key data as a result of working from home. In fact, research (https://bit.ly/31CMFUo) we conducted last year revealed that just under a third of employers have seen their payroll capacity drop, in some instances to a worrying degree. A huge 44% of the businesses we surveyed – most with over 1,000 members of staff – said they were unsure their payroll department could even function should staff members be hit by the virus. Even some of the UK’s largest and best-established companies have come perilously close to failing to meet payroll deadlines in recent months. On top of this precarious situation, payroll functions are feeling pressure from senior executives’ rising expectations. As large organisations continue to become more data-driven and analytics-based, attention is turning to the potential benefits of unlocking deeper insights from human resources (HR) and payroll information. There’s a decent rationale for this move. Better and more effective analytics tools should make it possible to understand the nature and frequency of errors or anomalies in the overall payroll process – or even detect fraudulent activity. Turning data
into insights more rapidly can also help companies get a better and more-timely handle on workforce patterns, as well as optimising employee-based operations like booking leave. For many businesses with mixed or flexible workforces, quick understanding of the cost and impact of overtime could influence decisions to increase capacity or secure new hires. ...empowering payroll to emerge in 2021 to a brighter, agile future... Pandemic-linked pressure on teams to make better use of digital tools and the more gradual ratcheting up of demands for faster access to more data are together pushing the payroll industry towards a new future – where agility will be essential to payroll. Adopting an agile approach can replace problems with opportunities. Agile payroll is something of a ‘catch-all’ term for a technology-enabled approach emphasising fast, responsive access to payroll data. More than just a cost-saving exercise, it enables the payroll function to work more reactively and efficiently, and ultimately play a more strategic partnership role within the business. With the emergence of cloud-based payroll tools and more sophisticated analytics platforms, it’s becoming possible to re-evaluate some long-held practices and assumptions about how payroll cycles are best managed. During a traditional monthly cycle, the payroll team generally spends the first two weeks speaking to customers to clarify
inputs and resolve any errors they have identified. A preview report is shared in week three, before the last round of checks are conducted; and payroll finally runs in week four. But a key problem here, which every payroll professional knows, is that a lot can change in a month. In most large, modern businesses, everything ranging from rises or falls in overtime levels to changes in sickness benefit payments to exceptional changes to legislation to combat national pandemics, all add to the monthly workload. Fixing errors is a costly process and the consequences of even small failures are high. In an agile payroll future, the necessary technology, structure and practices are in place so that companies can process and run smaller, preview reports constantly, overnight, every night. This spreads the necessary checks out over a longer period, but also allows for reactive corrections. Doing things this way may seem intensive, but in practice can provide the payroll team with more time to ensure data is correct, vastly reducing costly payroll errors and freeing time to conduct more strategic tasks, such as data analysis. Embracing an agile approach won’t happen through the installation of any single software solution – it’s a comprehensive change of mindset, requiring integration of a range of interoperative tools and processes. The past twelve months have been challenging for payroll, while offering glimpses of a more streamlined and digital future that may be possible to bring about. For many businesses, however, asking overworked professionals to embrace this level of change can be extremely difficult. It’s crucial that movement to a more empowered, agile future be a gradual process, with support from experts who can help. n
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| Professional in Payroll, Pensions and Reward |
Issue 70 | May 2021
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