01 November 2021
Daniel Cookson, marketing director at Moorepay, looks at how the pandemic has impacted payroll and human resource (HR) departments
Despite the pandemic, the tech industry has continued to evolve, and some advances have been directly driven by Covid-19’s effect on our daily lives. For example, many businesses transitioned to a remote working model and needed cloud-based software, resilient communications systems and enhanced information technology (IT) security measures to make this possible.
Looking closer to home, how has the impact of Covid-19 affected the adoption of digital technologies within payroll and HR?
While disruptive technologies, such as predictive analytics have been in use for some time, has Covid-19 pushed businesses over the technology tipping point?
The CIPP’s Future of Payroll Report 2020 revealed that 46.7% of payroll professionals planned to develop their data analytics skills within the next two years. This suggests that payroll professionals are recognising the power analytics can give them in addressing the challenges we can predict and seeing the importance of being empowered to adapt rapidly to those we cannot. Indeed, it’s perhaps more in these moments when analytics really comes into its own.
However, are payroll providers keeping up with their clients’ demands for innovative analytics solutions? In our annual payroll industry survey*, we asked ‘what are your top frustrations with your current payroll provider?’ The top voted response in 2019, 2020 and 2021 was ‘limited reporting and analytics’. The trend line has seen a consistent decline over the past three years which means improvements are being made in this area – but it is not enough. As greater demand is placed on payroll and HR professionals to build objectives and strategy on accurate data analysis, better software functionality is required.
Real-time data that is automatically configured in helpful charts and graphs takes the headache out of data analytics. Businesses that are combing through vast amounts of data in Excel spreadsheets are asking themselves why it’s not easier – and rightly so.
We recently held a payroll industry briefing where we discussed the findings of our recent survey with a panel of experts. Vickie Graham, business development director at the CIPP, joined our panel and stressed the importance of suppliers and clients having open conversations about analytics. This will ensure that frustrations around reporting and analytics are alleviated, and clients are not settling for inadequate workarounds.
During our panel discussion, Anthony Vollmer, managing director at Moorepay discussed what the future could hold for businesses with limited reporting and analytics. He described two key drawbacks: the time it takes businesses to analyse data and the risk attached to not having access to business-critical information. Without analytics, you either don’t get to the insight which can create risks that could otherwise be mitigated, or it takes an awful lot longer.
Having dashboards that tell you headcount growth rate by gender, or salary range distribution by age for example, can help leadership teams make decisions immediately. This kind of insight can take hours, days or even weeks to obtain and analyse manually, and in an unexpected crisis that time can be exceptionally valuable. In addition, real-time, data-driven dashboards can intelligently join multiple sources together and present insightful data on factors you didn’t necessarily realise you needed to review.
So, from an investment perspective, businesses benefit from having analytics in place for when the unexpected happens. But, as many professionals are recognising, you also want it in place to help with the strategic function payroll performs today – and will perform in the coming months and years.
Much of the power of analytics comes from the data being analysed, which is where modern, integrated payroll and HR systems really come into their own. Interestingly, our survey results show there has been more movement in the market during the past year, with those stating they have been with a new payroll provider less than one year, seeing an uptick of 48% year-on-year.
Meanwhile, the number of people who have been with their provider long-term – more than five years – has declined, suggesting businesses are becoming less loyal and more willing to shop around for the right solution.
When thinking about the use of analytics, we know that data fuels key business decisions. It always has but when you face a crisis such as the Covid-19 pandemic, the hunger for this data increases. Business leaders were forced to make an overwhelming number of crucial decisions and needed to be able to quickly digest substantial amounts of data on labour costs, skills gaps and absence rates, for example. The intelligence from analytics is integral to both the speed and quality of our decisions in these critical and fraught moments.
Featured in the November 2021 issue of Professional in Payroll, Pensions and Reward. Correct at time of publication.