Business

3 Ways Payroll Innovation Can Drive Business Success

We live in a world of technology, where it has advanced to every aspect of society. This is most noticeable in businesses, where companies rise or fall due to the successful (or unsuccessful) adoption of technology and software. Nonetheless, most companies regard these technological disruptions as well worth the cost.

One notable exception to this technological disruption is payroll innovation. Given the sensitive nature of payroll and employee details, many companies and senior leaders are hesitant to innovate in this area. That is a huge pity given that the benefits of payroll innovation are tremendous. This results in companies continuing to operate using administrative, clunky, and outdated payroll systems.

What is payroll innovation?

The world is constantly evolving. Businesses, regardless of industry or nature, need to be adaptable in order to survive. And those that are hesitant to adapt will fall prey to competition. Payroll Innovation seeks to ensure that critical technologies and software used by business and HR departments are always on top of their game in order to effectively manage the sensitive nature of payroll data and employee records.

Payroll innovation can take various forms. It can also be specific to a particular context. For instance, in some cases, organisations may only need to change certain payroll processes or workflows. For other organisations, payroll innovation may mean revolutionising their existing payroll systems and technologies.

Why is payroll innovation important?

Based on Ernst & Young (EY) 2017 Global Payroll Survey, it found that while the use of digital technologies (RPA, AI, blockchain, chatbots etc) were rapidly being adopted across many parts of the organisation, survey results showed that HR may be slow to adopt them.

This is a worrying trend. Given that we are now accustomed to living in a digital age, it has left us with changing expectations from the processes we experience in our daily lives. Most of us are used to having quick and simple access to various sources of data. This convenience of having information readily available at our fingertips also means that our tolerance for slower and cumbersome systems is limited. In the context of payroll processing, backdated processes and systems can reduce our tolerance even further. An ineffective and clumsy payroll process can have dire ramifications on the organisation.

In order to ensure high levels of motivation among employees and to drive internal efficiencies, it is important for organisations to look for effective ways of managing payroll.

Benefits of payroll innovation

There are plenty of benefits associated with payroll innovation – be it from an organisational or operational point of view.

Increased productivity

Automation is an integral part of payroll innovation. In fact, this has already been in-built into the very best payroll software in the market today. HR and Payroll teams today play a more strategic role in addressing and solving the demands of the emerging workforce, as well as designing attractive remuneration packages to attract and retain key talent. Automation plays an important role in managing the administrative and mundane payroll matters while ensuring accuracy, freeing up valuable time for the ever busy payroll department.

Improved employee experience

Electronic payslips (e-payslips) were introduced to organisations more than a decade ago. Today, it has become a norm for most businesses. Going paperless is a payroll innovation that organisations can truly benefit from. For example, introducing self-service employee portals allow employees to access their personal HR data, such as leave records, past payslips or common payroll queries, anytime without having to go through the HR or payroll department.

Drives actionable business insights

Artificial Intelligence (AI) is no longer a futuristic notion. In fact, most of us are encountering AI in our daily work, from Google predictions of search terms to suggested shows to watch based on your Netflix watch history. Combining AI as part of innovative payroll solutions helps to analyse massive amounts of data and draws predictions based on the data available. This provides HR and Payroll with game-changing and meaningful business insights such as high-risk leavers or turnover rates for critical business functions, that will help to facilitate strategic business decision-making.

There are certainly numerous tangible and intangible benefits of payroll innovation. If organisations are able to maximise payroll innovation intelligently, it will help to improve business performance, attract and retain talent while future-proofing the organisation for the changes yet to come.

Managing payroll with cloud-based payroll software

The move towards a remote-working arrangement during the pandemic means that running payroll on excel spreadsheets or on-premise payroll software becomes extremely challenging and complex. The first limitation is the lack of accessibility. Payroll staff are unable to physically go back to office to use the organisation’s payroll software. The second limitation is data security. Payroll contains sensitive and confidential information. Managing payroll outside of the organisation’s IT systems and servers exposes the data to potential security breaches and hackers.

The pandemic has highlighted an imperative need for advanced payroll systems that are accessible to employees regardless of location or geographies. Cloud-based payroll software addresses those limitations by allowing remote access to payroll data, eliminating the need for payroll staff to be physically present in the office while ensuring that the necessary data security controls are in place. Most cloud-based payroll software are also able to integrate other HR functions. Example the time-tracking and tax filing as well as regular software updates to ensure compliance with changes in employment laws and statutory contributions. This allows organisations to streamline standalone HR processes onto a unified HR platform, ensuring accurate and compliant payroll despite remote work arrangements.

Robust remote data security

Businesses are gradually adapt to the new norm of hybrid working. Data security within payroll software becomes an increasingly critical focal point for organisations today. According to Shred-It’s 2018 State of the Industry report, they found that more than 80% of C-suites in North America believe that the risk of a data breach is higher when employees work remotely. Organisations are moving towards adopting a hybrid work arrangement. Employees are allowed to work a certain number of days remotely and the rest of the days in office. This means having to overhaul internal security controls to strengthen data procedures. Particularly in the case of managing payroll processing. Payroll staff have to handle sensitive and confidential payroll and employee records. It is imperative to introduce new data security protocols as well as educate employees on data security procedures.

Some of the new data security controls that organisations can put in place include multi-factor authentication (MFA). This requires the user to go through a two or more steps verification process. Then only they are able to access the payroll system. Other controls could include introducing Virtual Private Networks (VPNs). Instead of using unsecured WiFi networks to access payroll if it happens to be a cloud-based payroll platform. Besides implementing new data security protocols, payroll staff should also be trained on the internal data security procedures. They are well-equipped with the necessary knowledge to handle potential payroll data breaches.

Integration of payroll system with HRMS

The shift towards hybrid in-office and remote working also stresses the need for integration of payroll software with other HR functions. Such as employee attendance, leave application, and expenses management. Organisations can consider platforms such as Human Resource Management System (HRMS) that supports the full spectrum of payroll functions.

Remote working means that there are certains limitations if HR functions were executed on individual software or platforms. This could include delayed payroll processing times, inaccurate employee records and more. It is useful to integrate payroll with the organisation’s human capital management system (HCMS) or HRMS. This facilitates accurate tracking and record-keeping of employees’ details and payroll information. This also means that salary items such as leave applications, expenses claims or allowances are automatically captured during payroll processing. The result? Minimal payroll errors, high payroll accuracy and timely salary disbursement which in turn leads to happy and engaged employees

The impact that the COVID-10 pandemic had on managing payroll is clear that traditional payroll processes will change. While it is difficult to predict what the exact changes are. Organisations need to be agile and adapt quickly to the changes. Besides automating administrative processes and leveraging on technology to streamline workflows, it is also crucial to ensure that managing payroll remains accurate and compliant at all times. Hybrid-remote working becomes the new norm, organisations have to find ways to ensure payroll remains highly efficient and cost effective.

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