How UK payroll experts are using technology
20 October 2019
This article was featured in the November 2019 issue of the magazine.
Brian Sparling ChMCIPPdip, payroll delivery manager for Ceridian Europe, reveals and discusses findings from a recent survey
Payroll practitioners in the UK have a lot on their minds these days, from Brexit and the gig economy to the gender pay gap and evolving data protection obligations. Furthermore, payroll experts need to keep pace with best practices and technology trends that impact the payroll function, in addition to managing changing workforce and compliance requirements.
To better understand current perceptions, challenges, and practices around the use of payroll technology in the UK, we conducted a survey – carried out by Reward Strategy on behalf of Ceridian – of UK payroll experts across a wide range of industries. This revealed some interesting findings around how payroll experts use technology today, and how they plan to use it and evolve their strategies in the future.
Here are some of the key findings.
According to 32% of respondents, the top challenge payroll professionals are facing today is compliance. This may come as no surprise, given the changing rules around regulatory requirements and data collection following the rollout of the EU’s General Data Protection Regulation (GDPR).
Additionally, the payroll function increasingly comes with a greater responsibility, as payroll leaders are key stakeholders when it comes to risk management in this area as the guardians of the largest source of an organisation’s personal and proprietary information (http://bit.ly/2MnyBpO).
There are hefty consequences to non-compliance, including penalties and fines: non-compliant companies today face as much as €20 million in fines or 4% of annual global turnover. Fines across the EU, in fact, totalled €€56 million in the GDPR’s first year of existence (http://bit.ly/329XMDi).
The after-effects of GDPR are likely to be the reason for compliance ranking as the biggest payroll challenge in the UK this year.
...largest source of an organisation’s personal and proprietary information...
We also asked respondents how they are applying technology across key payroll and human resources (HR) functions, to better understand if and how they are harnessing technology to make their jobs easier.
Onboarding – The most common response (34%) was that respondents use in-house technologies. However, just under a third of respondents (31%) aren’t leveraging technology for onboarding, and are still relying on paper-based or offline methods.
With onboarding being a repetitive and time-intensive process, this highlights an opportunity for more professionals to consider streamlining onboarding by moving away from offline methods.
Benefits administration – Our research identified that while 33% are keeping the process in-house, a significant 21% of respondents are outsourcing the administration of employee benefits programmes, making this the process most likely to be outsourced of those asked about in the survey. Administering these benefits to employees can be a complicated and time-consuming task. Outsourcing can reduce the onus on the company to repeatedly negotiate with insurance carriers.
Year-end reporting – A critical output of the payroll department is the accurate management of year-end processes, including any tax obligations. When it comes to using technology to manage these processes, the largest number of respondents (33%) indicated a preference for keeping their year-end in-house. Vendor-based solutions were also favoured by a significant number of respondents, garnering 30% of the responses.
Exploring new technology
For many payroll experts surveyed, new technology is on the radar. In fact, 72% of UK payroll professionals are actively planning to use new payroll technology, while 60% of payroll professionals currently using in-house tech plan to review it in the next year. The latter finding spotlights a shift in attitude around in-house payroll technologies.
About a quarter of respondents indicated an interest in looking specifically at artificial intelligence and cloud/SaaS (software as a service) solutions to expedite and improve the payroll function: a slightly higher percentage than the 21% captured in EY’s 2017 global payroll survey (https://go.ey.com/2MzlZfo).
This underscores a widespread understanding among UK payroll professionals of how technology could make their work more efficient, compliant and less prone to errors.
The survey highlights that most practitioners in the UK today are realising that emerging technology is helping us all work smarter, faster and more accurately – and many professionals are on side to take full advantage. For many, it’s time to take full stock of their current systems with a critical eye, and potentially embrace newer, better technology to catapult their payroll department to the next level.
Ceridian’s The UK Payroll Technology Report (http://bit.ly/2B1Y0Al) provides further insight into how UK payroll experts are using technology.