As globalization continues to enable greater mobility and flexible working for employees, national and local authorities simultaneously impose greater regulations around tax, compliance, and employee benefits.
For the global business, this means a more complex payroll picture than ever, with an increasing number of working parts needed in the payroll machine to get people paid accurately and on time.
To meet these challenges, payroll is having to evolve fast — and it is technology that’s enabling the shift. But as tech continues to advance, taking payroll delivery into a new age, what does it all mean for those who work in the industry?
If the game has changed, the players and the teams need to adapt too. Arguably, one key principle of this adaptation is the increasing need for specialization.
In most organizations, payroll is already a specialist function. However, technological advancements (as well as societal and legislative changes) require specific domains within payroll to become more sophisticated.
Can all of these tasks be performed by generalists? Or are specialist skills becoming the norm in payroll?
In this article, we’ll look at the rise of specialization within payroll, including when and how global businesses should be building specialized payroll teams, and what generalist payroll professionals can do to increase their value to the business.
Generalist to specialist: a digitally driven trend
To be clear, payroll isn’t the only department facing specialization.
As the working world continues to implement many forms of digital transformation, key business functions including HR, finance, and marketing are managing similar changes. HR can serve as something of a bellwether for the payroll function, having blazed the trail for specialization in recent years.
Traditionally, generalist HR professionals covered all HR operations for the business, working across all employee-related matters, ranging from administration to recruitment to onboarding.
While that remains the case in many SMEs (where budgetary restraints make multidisciplinary teams more of a wish than a reality), larger enterprises are seeking to push HR to its maximum potential by building teams of specialists.
Employee benefits and recruitment professionals often work alongside dedicated HR data analysts and training experts, with each role elevated in importance to help unlock the broader department’s strategic value.
This is a key driver for change in the payroll sphere too. Because the payroll department is a primary source of organizational data, specialization in reporting and data analytics has grown in significance.
Other common payroll specialisms include local tax, regulatory compliance, and payroll technology. While not specialized in its truest form, vendor management also requires a level of commercial experience and strong relationship skills. For businesses working with multiple local in-country providers or a global payroll provider, the nature of this assignment could be enough to warrant a dedicated role in its own right.
Naturally, every payroll department is structured differently, so not all of these specialisms will always be required. Conversely, many larger organisations will need specialists in more areas than those highlighted above.
Why it pays to specialize
Organizations will always have a place for those who know a little about a lot, and broad knowledge and versatility will arguably remain the most desirable assets for smaller businesses with standard payroll requirements.
However, larger corporations are increasingly keen to recruit specialists who can leverage the latest technology to the fullest, in the pursuit of high-impact results.
Of course, these teams of specialists still need a payroll leader — and who better to lead them than an experienced and worldly generalist, with wide-ranging knowledge and the ability to hold their own with senior management?
In terms of career path however, specialization may be the way forward for the majority of today’s payroll practitioners. That may mean learning a new skill or mastering an emerging technology. It might also mean tapping into changing workplace dynamics, for example, investing the time to become an authority on the management of a gig economy workforce.
Other key payroll trends and technology, such as on-demand pay, blockchain, robotic process automation, and artificial intelligence, offer more technical paths towards specialization — all increasingly sought after by the forward-thinking global enterprises of today.
Despite the demand, adopting a specialist discipline can seem a little counterintuitive at times. Yet, looking at how this trend is shaping other business functions may provide some assurance. By picking a single discipline, you can be confident in your work, and in your capability to keep up with the changes that will undoubtedly impact your chosen area over the coming years.
With technology continuing to reshape the world of payroll, it seems likely you’ll look to specialize before too long.