Payroll
Payroll departments are facing a lot of game changing challenges at the moment, which are expected to come to a head in 2024.
How is payroll changing?
Andy and Alice discuss how business expose them themselves to the risk of being left behind by not embracing digital transformation to modernise, automate and secure their payroll processes.
“With the volume of changes that have occurred over the past few years, along with experienced members of the payroll community retiring at an accelerated rate during the pandemic there is a big knowledge gap in some organisations leaving them vulnerable to fines for not meeting legislative compliance.” Camilla King, Principal Product Manager at MHR
Since the Great Resignation, a lot of departments have been struggling with talent gaps, but this is especially pronounced in payroll teams. They’re so reliant on knowledge (in regard to processes and compliance particularly) that skill gaps aren’t just problematic, they can be crippling. Finding ways to overcome this will be the major trend of 2024.
Payroll departments struggle to modernise. Often seen as a purely administrative or bookkeeping role, payroll teams don’t often get the tech investment other departments see. That makes those skill gaps an even bigger issue, as upgraded technology can smooth over the missing gaps
Real-time payroll. What is it?
No matter what problems a payroll team might be facing, real-time payroll is a key solution. It has proven to be a massive success for the organisations that have implemented it, overcoming a lot of problems that have plagued payroll departments for years, while also unlocking new ways of handling new requirements.
Real-time payroll is an automatic process where payroll calculations are made as soon as changes are made to data, and you can see how changes are impacting your payroll straight away.
That removes a huge number of issues. Payroll has historically been a process with a lot of stressful peaks and troughs. Things get locked in place, and any errors that crop up are often not spotted until it’s too late.
Real-time payroll removes all those concerns. “Not only does this streamline processes, but it also means it is easier to spot errors, increases accuracy and improves visibility without adding to your payroll team’s workload,”
Flexible pay means better financial well being
As the world of work become more flexible, payroll needs to modernise and adopt to suit. From new approaches to working hours to alternative contracts, the traditional 9 to 5 is looking more and more outdated.
Also changes in legislation for gig workers, freelancers, temp hires create higher risk for compliance issues.
“In the CIPP’s 2023 Payslip Statistics Report, only 40% of respondents believe that payroll is well placed to assist with the financial well-being of employees,” says Samantha O'Sullivan, Policy Lead, CIPP.
Financial wellbeing has become a more significant concern for employees than ever before. Close to 7% of employees are distracted or unengaged at work due to financial stress. Such employees are 5x more likely to need to take time off, adding up to seven extra sick days per year. This increased absenteeism costs organisations £2.5 billion a year.
Want to find out more? Read our 2024 road map guide here.