Let's Talk Global Payroll in 2018 - Part 2

Jan 25, 2018  | Topic: Strategy

While many organizations are rightly focused on new compliance regulations and technology solutions, the coming year has more in store for payroll professionals, related functions, and the employees they aim to please. In the second part of our look ahead at what 2018 holds for global payroll, SVP of Payroll and Payments, John Pearce, and VP of Marketing and Learning, David Barak, continue their discussion of coming changes and opportunities, and why this will be an important year for integration.

Read Part 1 of our conversation on the challenges, opportunities, and continuing trends in global payroll in 2018 by clicking here.

Expanding Roles in Payroll

David Barak: Technology, robotics, AI, all of it will deliver more accurate, consistent data, which is essential to enabling better global payroll, but an equally important aspect of their adoption is the time savings. It’s a real opportunity for organizations to leverage their payroll teams in new ways because of increased capacity.

John Pearce: Yes, your payroll team can focus on giving your employees the best service that can be delivered. If they're spending less time doing manual checking, they can spend a lot more time working directly with the employees, being quicker on any inquiry support tickets, giving them a faster service. Also, they can spend more time reporting and doing business metrics or other things that the wider business might find useful. In general, the payroll professional can be looking forward to a much more expanded role.

DB: I think part of that is going to be in more strategic, analytical aspects of the organization. By examining those metrics and evaluating the performance of the payroll process, they can make recommendations for improvements both in that process and upstream. The benefits could extend well beyond just the payroll function.

JP: Yes, there are clear goals that can be attained by focusing on robotics and process improvement. Payroll teams should look to have a shorter payroll processing time so they have a later cutoff. That benefits business processes all over an organization. It takes pressure off of commission teams and other benefit providers by giving them longer to get their data together and clean, and get it into payroll. Also, if you're a sales person working for an organization and you can get your commission paid up to the 20th of the month as opposed to the 10th, chances are that will impact your motivation to sell more because you're going to see your reward quicker. I think all of these things are starting to have an increased role in employee happiness and performance.

They may be only marginal gains, but they're gains all the same that haven't been available for the payroll team to leverage before, and they will add up. Also, as we touched on earlier, there will be that added pressure to apply new technology because companies are seeing the benefits in finance and HR. There will be an increased expectation of what’s possible from payroll data and analytics. If you take an example of an average 100-person payroll with maybe 70-odd pay cages, you're looking at around 10,000 data fields that could be mined. That could be useful. And for the payroll professional, there may be opportunities to be able to understand, model, and provide insight around that mass of data that’s now available.

Constant Change

DB: The potential for robotics and automation definitely create opportunities for the payroll professional. And because payroll will be one of the most challenging areas of an organization in which to deploy robotics, just because of the variability and complexity, a key opportunity is for the payroll professional to be part of that deployment process. If they’re part of their organization’s transition to a modern, technology-driven payroll process, then they can become topic experts within their company. Compared to the adoption of robotics and automation in sales, marketing, or even HR and finance to some degree, where deployment would be more standardized, the payroll professional will have gone through one of the most difficult transformations. They have the opportunity to be a real agent of change within their organization.

JP: That’s true, and it’s an important time of change right now.

DB: Where else do you see big changes happening?

JP: The landscape is changing around payments, in terms of how they are handled as well as different methods of compensating your employees, like payment cards, virtual wallets, and things like that. It’s still early for most regions, but companies are starting to look for additional compensation options for their employees apart from direct deposit or a paper check. Some industries are already using these alternative payment methods just because of the nature of their industry. For example, in shipping or fields where employees are moving from one country to the next and either don’t have time to set up a local account or aren’t able to, pay cards can be a useful, efficient alternative for the employee. The cost of these methods is dropping, and the security and technology that goes to support them is jumping along at great pace.

The Integration Conversation

DB: Now we’re getting into the need for companies to be able to seamlessly manage their information and core services across whichever regions they operate in. This isn’t a new conversation, but it’s an important one to continue because options and solutions are always evolving. Over the last few years, organizations have been making investments in improving their technology landscape almost on a function by function basis. 2018 will see a continued demand to now integrate all of those technologies, to maximize the possible returns from those investments as well as to position companies to benefit from new capabilities that are being continually developed. Business leaders can now look at all of these functions from the command center of the organization and examine how their IT, finance, HR, and payroll systems talk to each other.

Fair to say that’s the 2018 investment? To really optimize your technology, your systems, your solutions, and thereby your business, you need to integrate them. Every function needs to be working from the same data, seamlessly, to realize those promised benefits.

JP: I agree. I think most companies have at least begun that journey of moving a lot of their enterprise functions to the cloud, and in most cases, I’ve seen them do it function by function. Now is the time to get a greater return on that large investment, and to do that, you need to make sure they’re able to talk to each other in a seamless, efficient manner. It’s a very logical next step, and while some people are just coming around to the idea, I think a lot of companies, particularly those operating across multiple regions, will be weighing integration options in 2018. And I think that will continue for the next few years as integration technology becomes more enhanced, the cost of integration comes down, and the actual demand from senior executives to have integration and to remove manual processes increases as well.

DB: So is 2018 the year of integration?

JP: Let’s say it’s the year of integration. The thing is that continuing a legacy system like that, with multiple disparate vendors across regions, makes your business case a tricky one. Unifying and integrating systems isn’t just about efficiency or being able to play in cloud-land with HR, sales, and the rest of the business. It will help you tackle a lot of the compliance challenges that are coming up. The fact that you have electronically available audit trails and consistent, reliable global processes will go a long way toward meeting larger organizational goals.

DB: Yes, and this is the year to integrate or at least make that business case, because of the confluence of GDPR and other data privacy requirements, and the overall trend toward a more integrated enterprise. The need and desire is now matched by the technological capability, so it’s down to organizations prioritizing their performance and making the investment in their future.