How can companies better leverage payroll data for strategic decision-making?
Increased use of cloud-based technology
Unsurprisingly flexible working and work-life balance are more important now than in previous years. Since hybrid working is due to become the norm for most organisations, having a cloud-based Payroll Solution has become essential. According to a recent report by Gartner “The expectation of radical flexibility is likely to make a hybrid workforce model more prevalent in the post-COVID-19 world “. The advancement in digitisation, work flexibility, and increased competition for skilled workers has led to some significant changes in the payroll functions. Nowadays, payroll management is no longer limited to simply giving out employee paychecks but plays an essential role in the overall success of an organisation.
In a report published by Zion Market Research, the global cloud-based payroll software market is expected to generate around USD 13,374 million by 2026. “The introduction of cloud solutions in the payroll and HR domain is making revolutionary changes in services for both the employees and employers. Cloud-based payroll systems have several advantages over on-premises systems that will boost the cloud-based payroll software market globally. Cloud-based payroll software is apt for business growth due to its high scalability. It endorses commercial growth as cloud storage eradicates traditional paper processes and their related costs. The users can opt to customise and upgrade their platforms according to their specific needs.”
The use of cloud-based technology has been a rising payroll trend for the last few years. According to a Chartered Institute of Payroll Professionals (CIPP) report, 38% of payroll software is hosted in the cloud. A cloud-based Payroll Solution enables finance and HR departments to collaboratively manage payroll remotely and access data from anywhere and on any device. The system's self-service capabilities empower your workforce to access their payroll information in real-time, including their pension and pending leave balance. Additionally, features such as time-tracking and scheduling ensure that employees' working hours are accurately tracked and compensated correctly.
The need for Payroll & HR Automation
In addition to having a cloud-based Payroll Solution, there’s an increasing need to analyse and use data. Companies are now investing in payroll solutions that can integrate with their HRIS or working with providers to integrate these and other strategic business systems via HR Automation. Integration results in the automated sharing and transfer of data, which avoids time-consuming manual data entry and human error. It merges payroll and HR activities for maximum efficiency and supports your employees through their entire journey within your organisation.
HR management and payroll are traditionally separate systems, but when combined, they simply perform more efficiently and effectively. Successful integration results in streamlined access to accurate employee data. For example, the functions of time tracking, scheduling and leave are usually handled by HR software. But when the information is shared with the Payroll System, there is a significant reduction in payroll errors, with payroll fraud and costly mistakes being eliminated. Payroll practitioners can track employee working hours to ensure that no one gets overpaid or underpaid for hours worked. With employee work hours accurately tracked and recorded, it’s easier and faster to generate actionable insights. Thus, having all the data within a single platform enables your HR team to pool together all relevant reports to generate resourceful insights. It also saves finance teams time collecting, cleaning and analysing disparate data to compile a holistic and accurate view of a company’s financial and HR situation, leaving them more time to spend on strategic, high-value activities.
The need for integrated Payroll Solutions is further reinforced by the current economic climate, with employers showing more caution around overall hiring plans while facing skills shortages. Hiring and paying staff has also become more complex, with many organisations using contractual and temporary workers to fill the gaps whilst having to navigate ongoing government job support schemes in response to the pandemic and rise to the challenges of the new IR35 legislation. The availability of integrated payroll solutions will see many businesses moving away from the conventional outsourcing process and embracing a new era of better-integrated payroll and HR systems, making information sharing and reporting far more accessible and efficient. With this trend, we will see a rise in the need for companies to attract the right talent with the right incentives. We can expect many companies to offer better equity, salary compensation, employee benefits with the changing priorities of an increasingly remote workforce post-COVID. Therefore, it is essential for businesses to ensure their payroll and HR solutions are better integrated, with strong communication between departments.
By integrating your payroll solution with your HR system, you can increase efficiency in managing employee data, including new employees' set-up, creation of benefit plans, and appraisals and performance management. An HR integrated payroll solution also enables managers and staff to access all essential information from a single dashboard, allowing the data to be efficiently and effectively shared across teams.
When you integrate payroll with an HR system that offers self-service functionality, you take another positive step in delivering an engaging employee experience. Employees will be able to view payslips and review benefits data, providing your workforce with greater visibility of their pay records and understanding of their benefits entitlement. Any inaccuracies will also be quicker to identify and resolve. This is a serious consideration given the clear association between efficient, accurate payroll and continued employee satisfaction.
A Single Source of Truth
Having a ‘single source of truth’, enables the organisation to collate appropriate data to generate personalised reports and actionable insights to make better strategic decisions. With true HR and Payroll integration, you’ll always be working with one single version of the truth. A data set you can trust for actionable insights, deliverable in one click. According to a study undertaken by Forbes, digitally transforming enterprises (63%) is the leading factor driving greater public cloud engagement or adoption, followed by the pursuit of IT agility (62%),
Effectively payroll data emerges as a critical analytical business tool and can be the key to understanding trends in your workforce. Rather than having Payroll at the execution end of a decision, it can provide valuable input in decision-making processes.
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