How is your current payroll solution performing?
The significance of ensuring your payroll is processed accurately, on time and compliant with current legislation goes without saying. Regardless of whether you are using a payroll solution in-house or outsourcing this to an external partner - either way, you are reliant on your software solution to process an accurate payroll for your workforce.
Fundamentally, the payroll department is the cornerstone of every business, and payroll is playing a more important role than ever in the success of a business.
How can you be sure that the software you are using has advanced and transformed with the times, making Payroll and HR easy?
There have been many legislated changes over the past five years that have influenced how payroll needs to be calculated and processed, including GDPR, IR35 (off-payroll working), Gender Pay Gap Reporting, Auto Enrolment contributions, the Job Retention Scheme (the dreaded furlough calculations) and Shared Parental Leave and Pay (ShPP). With approximately 174 regulations currently affecting payroll in the UK and payroll legislation continually evolving, you need to be confident your software stays updated with the latest changes. Substandard software that fails to comply with current payroll legislation is a substantial financial and reputational risk to your business.
According to Moorepay's Annual Payroll Survey Report (2021), 56% of respondents had been with the same payroll provider for more than five years. As the role of payroll software expands, more organisations recognise that payroll is more than just paying staff correctly and on time. There is a definite shift away from the traditional way of processing payroll to a more all-encompassing employee engagement platform.
The world of payroll continues to evolve as more organisations move towards cloud portals and self-service systems. Significant advancements in cloud technology have enabled secure online access to payroll reports and employees' payslips. Cloud employee smartphone apps are increasingly popular as employees want to manage their payroll information on the go. Cloud applications allow employees to view and download current and historical payslips, request annual leave, review leave taken and remaining, and manage personal HR documents such as employment contracts.
Approaches to the way employees engage with payroll processes are also evolving to a more engaged, accessible, and automated method. Progressive organisations are streamlining their payroll and HR processes on a central system where payroll bureaus, clients and employees can instantly manage holiday leave, change personal details, access payslips, upload payroll hours and process HR duties via online platforms.
From an employee perspective, the standard of a company's payroll provision can seriously affect the ability to attract and retain employees – which is a real challenge in the current HR environment. According to the Moorepay, Engaged Employer Report (September 2019), one in five employees terminated their employment due to a bad payroll experience – having their pay incorrectly calculated and being paid late made them feel undervalued and demotivated. At a minimum, employees expect instant access to payslips with the ability to complete timesheets, check leave balances and update personal details, on any device.
One of the key attributes of the payroll industry is its ability to adapt seamlessly to new internal or external developments, whether centred around working processes, legislation and regulation, or technology. The recent Covid pandemic is testament to this, where the government add in new furlough legislation and allowed for longer periods of annual leave carryover.
Payroll is becoming increasingly specialised. Companies are moving away from outdated legacy systems towards systems that can offer increased efficiencies. Cloud technology is impacting every part of business processing, both at an employee and an employer level. Increased efficiencies are also being gained in payroll through cloud dashboards, API integration with accounting software systems and API integration with pension providers.
A Deloitte study revealed that enhanced integration with other systems was one of the top three areas organisations sought to improve their payroll operations. A software system integration makes ensures the right data is in the right place at the right time. The improved data collection and retrieval process, coupled with other advantages, allows your business to achieve operational and cost efficiencies.
Having your various HR systems (Applicant Tracking System, Expenses, Time and Attendance, Recruitment, Onboarding etc.) interfaced with your payroll solution means more efficient operations, without duplicate entries or the risk of human error when capturing data. In addition, where companies use specialist software to manage their payroll, integrating the payroll system with the companies HR System will ensure the relevant data is shared with the payroll systems securely and in a timely manner.
Automating your manual payroll processes – where possible – is also vital. 86% of respondents to the CIPP's report (2020) believe automated business processing will reduce transactional responsibilities. An automated payroll system can save you time and money by streamlining complicated payroll processes and organising payroll records for future reference. Additionally, it eliminates the risk of human error, ensures employees are paid correctly and on time, and minimises the need for outsourcing to service providers. Automation provides payroll teams more time to do strategic and advisory work in the business, making it high on the agenda across the payroll industry.
Examples of where automation can benefit payroll include:
- Rates can be auto-applied to people's pay – even complicated Statutory Sick Pay rates based on seniority and tenure.
- The auto-run of static payrolls.
- Workflows that save time, e.g. when an employee submits a leave request, an email is sent to their manager to approve it.
- Automatic reminders sent to team members to submit missed timesheets and overtime.
The future of payroll lies in its ability to become agile in terms of reporting, integrating with cloud-based HR systems, adopting AI for the most basic functions, and adapting to the needs of future generations of employees.
Artificial Intelligence (AI) uses "machine learning" to adapt to the changing needs of its role and is designed to overcome the challenges of human error. It aims to simulate human intelligence with computers, making them think, function, or behave in the same way that humans can. Predetermined rules can be assigned to create customised technology, simplifying and reducing the time spent on tasks. Data is accurately collected, measured, and applied with a keen eye for errors. However, AI does not necessarily remove the human element. Instead, software such as advanced payroll systems helps improve payroll professionals' skills and elevate their roles.
In its most simple form, AI can be used to improve general efficiencies and compliance. However, it can also become more analytical to contribute to next-level decision-making and become a fundamental tool for HR professionals looking to improve payroll efficiencies. New insights, elevated HR skill sets, and time savings are just a few examples of what AI can contribute to the future of payroll.
Although digital transformation and the automation of business processes are essential to help ensure future success, new technology and business processes should however evolve and not disrupt. Various studies suggest that using systems that automate processes save in excess of 30% of the time to complete the tasks manually and has a significant impact on the accuracy of the processes.
To find out more about reviewing your current payroll solution, system integration or automation of your payroll processes, please reach out to us on tel +44(0)1908 030360 or email: email@example.com. Alternatively, complete the Get in Touch form and we will be in contact.