What are the Payroll trends of the past decade that will become a passé in the coming decade, and what are the emerging global payroll trends?
The expectation from payroll was very different a decade ago. We could have predicted that the payroll, a function with repetitive tasks, will get automated. We could have also forecasted that as a supporting function, it will make the lives of HR leaders less complex. So which of these trends of the past decade will continue? And which ones will evolve in new ways?
A historical perspective
- Payroll has traditionally been treated as just functional, its responsibility limited to reconciling attendance records and ensuring timely payments.
- The business case for automation was clear. Payroll had high-volume, low-value tasks. Automation gave payroll teams freedom from routine tasks.
- Data related to payroll was used for very different purposes in the last decade. For instance, performance reviews were done once a year to determine how well someone did and what their future compensation package should be.
- The idea of user experience in payroll was hardly explored.
The bygone decade was different. The nature of the workforce has changed, especially this year. Never before encountered challenges like COVID-19 are redefining work culture. Then there is the complexity of managing employees in multiple countries, each with their unique taxation and legal requirements.
Organizations must keep pace with new ways of working and also manage compliance, which is why payroll has to take on a strategic role.
Technology as an enabler
Most organizations work with a mix of salaried, contractual and freelance workers. A new work from home culture is also emerging. Organizations have to rethink how payroll and attendance management systems work. Robotic process automation (RPA) is going to play a major role along with AI and machine learning and will take over manual as well as computational tasks like uploading files to ERP systems, verifying payroll calculations or validating data.
- Moving beyond biometric and swipe-based systems: Organizations will have to move towards recording attendance in a manner that doesn’t require contact with surfaces. Facial recognition is the key to unlocking doors, quite literally! Augment touchless attendance with thermal screening and you will be able to not only automatically mark employee attendance, but also assess their body temperatures. Based on the company policy, HR can advise people to get tested or recommend leave. In cases where contact-tracing is mandated, your organization can support the health authorities in ensuring the well-being of your employees.
- Using data in meaningful ways: Payroll has an abundance of data - employee turnover, overtime, absenteeism, sick leaves, expense claims, etc. The question is, what will you use that data for? Organizations can move beyond exception reports to find out causal links, forecast issues and correct them proactively. With predictive analytics, results can be improved by making relevant changes in data processes and schedules. The insights can be used to guide senior management decisions and identify investment opportunities internally or improvement areas.
- Integrations through APIs: For greater control over data and processes, payroll is often integrated with HR and accounting systems. When there is a single source of truth, errors are eliminated, time is saved and the compliance risk is reduced. But integrations in this decade will not be limited to internal connections alone and extend to include connections with the external ecosystem. For instance, direct integrations with banks through APIs will result in fast, secure and hassle-free payments.
- Employee experience: Transformation of Payroll, attendance systems and thereby, workforce management, will not be strictly confined to the goal of improving the efficiency of all these processes. It will also serve to greatly enhance the employee experience. From accessing payroll related information anytime, anywhere to chatting away to chatbots to get policy queries answered among other things – the coming decade is going to be significant when it comes to improving user experience.
The decade ahead
In the years to come, payroll will have a strategic role to play in improving organizational performance. While technology will continue to provide process improvements for time and cost savings, it will also unlock opportunities to address new ways of working. Payroll will focus on the employee experience, make interactions intuitive through zero UI while predictive analytics will provide interesting insights. Integrations with third parties will bring in greater value and governance. In all of this, the role of a managed services partner will become essential as services on cloud save costs for the organization and technology partners can help organizations carve out a strategic role for payroll.