What is the future of payroll?
Payroll has changed enormously over the past few years, is still changing and will probably continue to do so forever. In terms of what comes next, it’s impossible to say exactly, but at Payplus we’ve been looking around at some of the predictions being made by payroll experts.
Generally speaking, most of the leaders in the payroll field are in agreement that technology is going to continue to play a growing part in how we process payroll. The other thing that seems to be raising its head is the softening of the lines between payroll and the likes of HR and the human side of a business in general. Embracing payroll as an increasingly important part of the strategy in any business is also being highlighted, as is the need to keep an open mind regarding this whole area.
Technology and payroll
The cloud is arguably one of the biggest payroll developments of our time and there is little doubt that the cloud will continue to play a major role that will grow and develop. Speed, accessibility, flexibility and improved collaboration are just a few of the benefits of cloud-based payroll. And as far as we can predict, it is likely that what we’re seeing today is just the tip of the cloud iceberg.
AI and chatbots
Ben Hancock MSc FCIPP, Head of Payment Services, London School of Economics and Political Science is quoted as saying “One of the biggest innovations facing payroll over the next few years comes with the increasing development of artificial intelligence (AI) and ‘bot’ software.” He goes on to explain how we are all increasingly embracing AI as part of our day to day lives and that this gives rise to the opportunity to use the likes of chatbots to respond to payroll questions.
Chatbots are heavily used in customer facing businesses where they can be programmed to learn certain procedures and routines that are repetitive. There is no reason why this opportunity can’t be extended to simple payroll enquiries, freeing payroll teams up to do more important tasks.
Ben’s view is backed up by Neil Tonks ChMCIPPdip, Legislation Manager, MH who appears to welcome this development. Neil sees this innovation as a way to “remove much of the daily administrative burden” faced by payroll staff. This, in addition to the 24/7 possibilities that are opened up when using chatbots rather than people, means that employees would be able to have their queries answered day or night, no matter where they are.
When people want to be paid
Neil Tonks who we quoted earlier reinforces the view we put forward in this article about Real-Time Paydays that the demand for flexible, real-time payments is likely to increase as work patterns change. Predicting the possible demise of the traditional monthly payroll run, Neil sees more and more automated transactions being made in real time. And Nick Phillips ChMCIPPdip, Payroll Project Lead (Fit for the Future) Employee Service Centre, Leicester County Council adds that blockchain and other emerging technologies could be the forerunners in this development.
How people want to be paid
Although further down the line, when it comes to how people are paid in the future, it is by no stretch of the imagination impossible that pounds and pennies could be replaced by cryptocurrencies. If this were to happen, then, of course, there would be an impact on payroll.
The battle between advancing technology and ever-changing legislation
The one fly in the ointment regarding the opportunities opened up by technology is the ever-changing legislation that impacts payroll. While speed and efficiency can be achieved, this will inevitably be slowed by ongoing complex legislative requirements.
Could payroll widen its organisational reach?
Payroll is viewed as an operations function, however, it is integral to business success, so it’s highly likely that it will move more towards a strategic function as time marches on. The handling of data and the sharing of information between the likes of finance, HR and payroll will be critical to this development.
The importance of data
For payroll to play a more strategic role, most organisations will need to smarten up how they collect, share and use their data. Mark Judd, Vice President, HCM Product Strategy EMEA, Workday is reported as saying that his company is “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”. This point is particularly poignant in the light of GDPR and bearing in mind that businesses are being challenged ‘people-wise’ in many different ways, such as gender and diversity pay gaps. It is accepted that people information is key to planning and if payroll data is excluded from the likes of HR or financial information, then the big picture isn’t nearly as clear as it could be.
The impact on payroll professionals
If, as predicted, technology takes over more and more of the mundane elements of the payroll process, many may fear job losses. However, if the technology is embraced in the right way it should mean that payroll professionals are relieved of the more niggly aspects of their jobs and given time to concentrate on more valuable tasks. This is likely to give rise to more specialist roles, rather than roles focused on processing and resolving simple queries.
Add to all of this, the fact that the world is becoming smaller and more and more companies are paying a cross border, global workforce, and you soon see that payroll is no longer (if it ever was) a group of people with timesheets and calculators making up pay packets.
Overall is now a good time or a scary time for payroll?
The view here at Payplus is that now and the next few years is a great time to be involved in payroll. Embracing change at the same time as getting the day job done is always tough. That said, we’re a company that prides ourselves on our adaptability, and in our view, there’s no doubt that there are exciting times ahead.
We see payroll as a key player in business success. There will be technological challenges and excitement, there will be differences in how data is managed and, we believe, payroll will slowly but surely play an increasingly important role in business success. And all of that simply has to be good news.
If you’re worried about your payroll then get in touch. We’re here to help.