Technology is evolving at an extraordinary pace, changing payroll processes. Jerome Smail, business journalist, presents the views of industry luminaries on what this portends

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The payroll landscape has changed almost beyond recognition over the last decade, with numerous legislative changes including real time information (RTI), auto-enrolment and, more recently, the coronavirus job retention scheme.

“Organisations are having to proactively search for ways to streamline their payroll,” says Louise Gray ChMCIPPdip, head of transitions and operations for EY. The result is the constant and rapid evolution of technology used by the profession.

To find out more about how technology has enhanced the role of the payroll professional, I spoke to some of the leading lights in the field:

Ant Brassington, director of product strategy and engineering, for Moorepay

Kirsty Fowler, managing director, HR & Payroll, at Civica

Rob Gimes, senior product manager, The Access Group

Brian Sparling ChMCIPPdip, senior manager, global payroll operations, at Ceridian

Fran Williams, strategic marketing and commercial director, managed services, at IRIS Software Group.

 

How can payroll professionals play a part to help technology continue to evolve in the right direction to ensure relevance to the role?

Ant Brassington: Payroll professionals will drive the evolution of technology in the right direction simply by partnering with a great vendor. Of course, there are forums and groups such as the CIPP that feed valuable insight to the vendors who build the technology. But payroll professionals themselves must be at the very heart of the procurement and implementation of any new technology.

Kirsty Fowler: Payroll professionals are in a much better position than they have ever been to give real feedback on payroll technology. It’s a traditionally conservative area. But advances in technology have moved us forward in the last decade, to the point where data is shared securely between HM Revenue & Customs (HMRC) and payroll software in real time. HMRC has taken the lead on this but there are so many other areas of payroll that are lagging behind, such as the submission of pension files to the various public and private sector providers, which is still predominantly a manual upload to a web portal. The more that payroll professionals speak up and lobby providers for a more modern approach to processing payroll, the more they will listen.

From Civica’s unique perspective, we run customer payrolls as a bureau using our own payroll software. This means we have continuous input into software development which, in turn, directly benefits our customers.

Rob Gimes: Challenge the status quo. As payroll professionals we are focused on providing an on-time and accurate service to our colleagues (customers). When our processes are proven we are understandably reluctant to change these. This can result in us getting a reputation for being reluctant to embrace and evolve new technologies. I challenge this. We know we are good at adapting and implementing new processes, so as payroll professionals we need to start evolving our roles to become more proactive in how we gather and distribute information related to our payrolls.

We should not just accept the email and manual timesheets; we should be pushing for improved technology and self-service for our employees and managers. We should not accept bad devolved payroll input but look for solutions and processes that inform and educate inputters of the consequences of bad data.

Equally, we should be looking for technologies that help our managers and employees self-serve the information they need in a secure and compliant way, be that copies of payslips or financial summaries.

Brian Sparling: Payroll professionals are essential to providing accurate, timely payment to workers. Pay is a critical employee touchpoint and payroll professionals help foster employee satisfaction across an organisation. Technology has the ability to tackle the administrative burden inherent with complex payroll functions, such as compliance, so that payroll professionals can focus on strategic priorities.

Fran Williams: I would encourage payroll professionals to engage as much as possible with their payroll software or service supplier to help shape the future of payroll technology and innovation.

This could be as simple as providing feedback via an account manager or annual customer satisfaction survey or, for professionals looking to make a more substantial contribution, getting involved in a customer user group.

 

...as payroll professionals we need to start evolving our roles to become more proactive in how we gather and distribute information...

 

How have payroll systems’ automated processes empowered payroll professionals to ensure compliance is easier to achieve?

AB: The more payroll is automated the more the payroll professionals can add value to improve both employee and business satisfaction.

Compliance is critical and payroll technology should be taking the transactional workload away from users, allowing them to focus on the output of the payroll.

Automation isn’t just about back-office processes though. With the use of chatbots, the payroll professional can also improve the employee experience by reducing the number of basic inbound queries to payroll.

KF: Integration with human resources (HR), time and attendance and timesheets have automated once manual processes, giving payroll professionals the confidence that there are fewer human errors. This gives them time to check the core data more thoroughly, reducing errors further.

Our experience has highlighted the areas where automation can reduce processing time by hours, sometimes even days. For example, for customer Cottage Delight, automation has cut payroll admin from five days to ten hours a month, while Thurlow Nunn has cut its monthly payroll processing time from a week to 1.5 days.

The more time we can save and errors we reduce, the more payroll teams can look at their internal processes and items such as testing, which too often are pushed down the priority list.

RG: As payroll professionals we sometimes take for granted all of the automation that our payroll solutions now provide us with, including back pay, gross to net pay elements, payslip reversals, automated HMRC notifications and RTI submissions, to name but a few. All of these processes were at some point manual. We now see them as minimum requirements for our solutions.

By freeing us from these complex calculations payroll automation has enabled us to look for the next improvement in process and ultimately allow us to realise our goal of on-time and 100% accurate payroll.

BS: The automation of payroll system processes has enabled HR teams to achieve best-in-class compliance. Using a unified solution for pay and time, payroll professionals can work on payroll throughout the pay period seamlessly on one platform, decreasing manual processes and human error. Modern payroll applications update payroll whenever a change is made, ensuring accurate, real-time data and enabling organisations to pay their people correctly and on time.

To reduce the burden of keeping up with complex legislative changes, it’s important to leverage a solution that monitors and enforces applicable requirements to help facilitate compliance and reduce organisational risk. At Ceridian, we designed Dayforce with a single database and single rules engine across all experiences of HCM (human capital management). We knew if we did this right it would lead to cost savings, higher quality, more compliant pay, and valuable real-time data business leaders could use to make better strategic decisions.

FW: Payroll solution providers have really stepped up over the last few years to deliver against multiple pieces of legislation such as gender pay gap and national living wage schemes. Initially the solutions gave payroll professionals the ability to calculate or report it, but increasingly more analytical functionality is being deployed to address it within the reporting periods, when employers look to hire new employees or conduct salary reviews.

 

...The more payroll is automated the more the payroll professional can add value to improve both employee and business satisfaction.

 

What technologies have changed in the last several years, and where do you see it going in the near future?

AB: ‘Early pay’ apps show financial technology is getting closer to payroll. We’re seeing vendors such as Moorepay starting to use faster payments as the default payment method instead of Bacs. Valuable time is then gained in a payroll cycle, helping not only payroll but finance to better manage cashflow and external spend.

Automated processes will get smarter. Not only will they alert the users to compliance errors, but they will start to suggest the best way to fix the problem based on how it’s been fixed in the past. And when artificial intelligence (AI) starts to learn those trends, it can be used to suggest the fix at the point in time of entry, rather than calculation or pre-calculation. This empowers payroll professionals to feel confident in their compliance and accuracy.

KF: AI and automated analytics are invaluable for solving a variety of business problems. Faster and more reliable internet in the past decade means more interaction between software solutions is carried out using a secure API (application programming interface) instead of passing files around. Via new technologies we can actively analyse and report data to predict trends, highlight potential issues early and solve business problems at scale and speed.

We see more processes available on mobile devices with assistance from bots. Generation Y expects real-time access to help and information, so will expect access to their payroll data to be the same. We will also see better-integrated enterprise resource planning systems, with payroll having shared access to wider data.

RG: If I were to categorise what has happened over the last few years it would be: move to cloud-based solutions, improved automation, increased devolved input to non-payrollers, automation for payroll validation, improved information distribution (including HMRC), and combined analytics helping businesses get true value from their payroll information.

So what does the future hold? The trend towards more devolved data input will continue. This will mean payroll professionals will need to stay up to date with the features offered by their solution provider as well as keeping an eye on emerging technologies and possible integrations such as rostering and time and attendance recording.

The days of the payroll processing run are numbered; solution providers are moving to more continuous payroll processing. This will allow us to utilise the benefits this offers such as live payroll dashboards, early pay drawdown facilities and improved business analytics.

BS: When we think about the future, we see the world of work becoming increasingly borderless, fluid, and on-demand. Payroll is central to this vision, as the proliferation of the gig and elastic workforce spurs employees to expect access to wages as they are earned, rather than through traditional pay cycles. To this end, there have been significant technological advancements to revolutionise archaic, batch-based processes that were once prevalent across pay systems.

Ceridian’s Dayforce platform provides a continuous calculation of pay to disrupt the notion of a fixed pay period. On-demand payroll requests are processed as a regular payroll with the appropriate tax remittances for an accurate payment, not an approximation or percentage. Existing payroll processes and schedules are maintained, including the funding, timing, and close-out of pay. This means administrators don’t have to spend time reconciling at the end of the pay period. Dayforce Wallet is available in the US, with plans to bring it to additional markets, including Europe.

FW: The increased industry focus on accessibility of payslips via self-service and salary advancement programmes have signposted a need for a better ‘employee payroll experience’, and I would see that accelerating over the coming years. Employers will look to differentiate by giving the millennial and zoomer generations access to their earned pay, on demand, instantaneously via digital wallets on their own smart devices.

For this to happen, payroll, workforce management and payment solution technologies will need tighter connectivity (via APIs) to allow real-time payroll calculations and payments to become a reality for payroll professionals. 

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