John Pearce, Chief Customer Office at CloudPay
It’s no secret that technology is transforming almost every area of life and payroll is no exception. The latest technological breakthrough seen within the sector is the next generation of Human Capital Management (HCM) platform integrations. But how is this changing the game in payroll, and what does it mean for professionals and the industry as a whole?
Payroll has evolved from what was once a manual discipline, into one that increasingly gains from advancements in technology, which has, in turn, freed up more time for professionals to focus on strategic input. Indeed, our recent Payroll Efficiency Index (PEI) Report highlighted this progression. It revealed that the overall performance of the payroll function had improved, showing that first-time approvals (FTAs) have reduced, along with reductions in both data input issues (DII), and the number of issues per 1000 payslips (I/1000). Viewed as standalone statistics, these might seem like ordinary results. However, when combined, these findings suggest that increased innovation and the greater use of technology are both aiding the speedy detection of problems in payroll and helping teams to resolve them quickly.
We’re now approaching the next stage of this technological evolution. This is being heralded by the arrival of a new wave of HCM platform integrations, which will have a significant impact on the day-to-day activities of payroll professionals, particularly those working at complex, international organisations.
As specialists will know, for the majority in the industry, successfully managing payroll is a challenging and arduous task, which often requires jumping between systems and platforms in order to gather the required and correct information. In this respect, the next generation of HCM integrations – built on a foundation of emerging technology – can change the game. They will provide a much faster, more streamlined and less stressful experience by combining and hosting all relevant data on one platform. This not only reduces the time and effort taken, leading to more efficient workflows and greater productivity, but it also decreases the need to utilise multiple Excel spreadsheets. And when payroll teams have to spend less time on administrative work, and hopping between datasheets, they can focus more on strategic initiatives.
In addition to automatically updating all local payroll information, users can gain from having a seamless end-to-end global experience, reducing the number of platforms that need to be accessed, which in turn limits the chance for errors or incorrect data input. This also means that sensitive data is rationalised and synchronised around a single source of information, resulting in a reduced risk of data duplication and inconsistencies. They also allow for automatic validations and checks to be applied, ensuring compliance with tax laws, wage regulations, and other legal requirements.
Collectively, this generation of integrations will help to support the growing demands being placed on payroll, and the evolving role that it plays within a business. The function now offers far more strategic value than in the past, and this will only increase as technology continues to enable data to be more streamlined and flow between other functions such as HR and finance, more coherently. This information can provide valuable insights into workforce trends, compensation analysis, and overall talent costs, which enables more informed decision-making for firms overall.
It also allows for better and more robust compliance across multiple geographies and territories, to name another advantage. It would be fair to say that keeping up with the varying international employment and tax regulations is one of the key challenges for practitioners, particularly in complex, global organisations. And getting this right is a high-risk, intricate and critical task. More effective integration with pay platforms makes it easier to adapt to these changes and ensure that salary and tax information is being delivered correctly, which reduces time – and stress – significantly.
Crucially, it’s not just payroll that gains from the next wave of technology and HCM integrations. It will allow for a better and more enjoyable pay experience for the most important user in the chain: the employee. Skills shortages are a significant issue in multiple countries, and a smoother pay experience can help to support better staff retention. Equally, payroll-related mistakes, or delays, can quickly lead to dissatisfaction, and if they’re repeated can lead to professionals choosing to work elsewhere. By providing easier access to relevant information through self-service portals and platforms, companies can enhance the employee experience by giving staff greater control and transparency over their pay, and their wider workforce satisfaction.
Ultimately, we are still in the early stages of understanding the true potential of these advancements but it is fair to say that the next wave of modern, more optimised integrations and other technological advancements can – and will – offer much more to payroll in the future.