Payroll evolution

25 May 2019

This article was featured in the June 2019 issue of the magazine.

Brenda Morris, managing director SD Worx UK & Ireland, considers how payroll can adapt and be the fulcrum for positive change

The workforce of today has very different drivers to those of the past, with many people now prioritising flexibility, autonomy and personalisation from their employers. Traditional approaches to payroll may no longer suffice when businesses are looking to have the edge in attracting and retaining the best talent, so now is the time for the payroll department to adapt and evolve.


Meeting modern demands 

A recent SD Worx study of 250 UK and international businesses highlighted that a third of senior professionals feel that payroll is unable to respond to the shifting needs of the modern workforce and the overwhelming feeling from 78% of respondents is that payroll must evolve and innovate.

The payroll function has a huge opportunity to deliver added value through effective use of technologies such as artificial intelligence (AI), robotic process automation (RPA) and machine learning, but first must get the basics right. Currently, of the decision makers surveyed, 22% said that payroll errors are regular while one in five said that payroll is often late. Despite the fact that people are now less likely to work just to chase a pay packet, being paid the right amount on time is obviously a fundamental expectation in the workplace. Of course, the majority of payroll teams are getting this right, but there is still a significant degree of dissatisfaction in some businesses that needs to be recognised. After all, these errors will result in disgruntled and disengaged employees and can put off future talent from joining the business. 

The positive point is that according to 88% of businesses, investment in payroll technology will rise by 2025, with 27% claiming there will be a significant increase in spending during this time frame.

While the responsibility for managing this investment and the development of the department falls on the payroll team, it also rests on wider management to ensure they are meeting the expectations of their most valuable asset, their employees. For this to happen, payroll and the business need to act in harmony. 


...huge opportunity to deliver added value through effective use of technologies such as artificial intelligence...


A more strategic role

As well as eradicating issues related to traditional payroll concerns, taking a strategic role within a business means that the team can play a bigger part in changing processes to meet employees’ demands around issues such as flexibility and work-life balance. Creating a new working environment that factors in people’s ever-changing views of the workplace is a high priority on most businesses’ lists. In fact, 68% of those surveyed expect to see an increase in flexible working hours and it is the insight from payroll data that will be critical in managing these changes. 

A big part of integrating payroll into the wider business is through investment in analytics. The department is often overlooked in terms of the insight it has to offer, but it is one of the most reliable data sources in any company. The insight the payroll department can offer into absenteeism, engagement and turnover is invaluable and by gathering and analysing this data, teams will be able to make correlations and develop policies to make a real change in the business. 


A pivotal moment 

Payroll can play a key role in attracting and retaining employees, but to do this the basics must be in place and payroll must elevate its position within the business. With 43% of payroll professionals citing technology as a key challenge in not being able to deliver tailored solutions to their employees, steps need to be taken to ensure these teams can reach their full potential.

With better integration between the payroll department and the rest of the business as well as investment in technology, payroll can play a much more impactful role. Innovations such as AI and RPA are already taking over the mundane administrative tasks that the payroll department has shouldered for many years, providing professionals the time they need to do what they do best – improve processes, innovate and add value. Now, it is critical that this time is used effectively. If it is, payroll can be at the fulcrum of positive change in the workplace.