Payroll needs to invest in analytics to prepare for the challenges ahead, says Anthony Vollmer, managing director at Moorepay.
The future is, broadly, foreseeable. Not in a crystal ball kind of way: isolated events will always be unpredictable, but we do have a good idea of the key trends to prepare for.
Clearly the pandemic was unforeseen, but the rise of working from home, video calls and flexible working are long-term trends that pre-date the lockdowns.
While we can’t predict everything that will happen going forward, we must still make decisions in the present day based on predictions about the future – what the business environment may look like in 12 months’ time informs the decisions we make now around staffing levels, pay and reward, technology investment and so on.
In recent years, the tools available to us to make those predictions have become significantly more potent. We have an incredible volume of payroll and HR data on which to base our decisions, and the power of cloud computing and analytics software to make sense of it all. I mention this because there has been a clear turn towards analytics in the payroll sphere: The CIPP’s Future of Payroll Report 2020 revealed that 46.7 percent of payroll professionals plan to develop their data analytics skills within the next two years. And in our own payroll report for 2020, we found that 47.5 percent of professionals want to see improved reporting and analytics from their providers.
It’s clear payroll professionals are recognising the power analytics can give them in addressing the challenges we can predict, and seeing the importance of being empowered to adapt rapidly to those we can’t. It’s perhaps more in these moments when analytics really comes into its own.
Having dashboards that tell you headcount growth rate by gender or salary range distribution by age, for example, can help leadership teams make decisions immediately. This kind of insight can take hours, days or even weeks to obtain and analyse manually, and in an unexpected crisis that time can be exceptionally valuable. The intelligence from analytics is integral to both the speed and quality of our decisions in these critical moments.
So, from an investment perspective, you want to have analytics and advanced reporting in place for when the unexpected does happen. But, as many professionals are recognising, you also want it in place now to help with the strategic function payroll performs today – and will always perform.
Of course, much of the power of analytics comes from the data being analysed, which is where modern, integrated payroll and HR systems really come into their own. Otherwise it’s a bit like having a shiny new motor and no fuel. Integrated data is the turbo diesel to your analytics engine.
However, despite the need for integrated software and the need payroll professionals see for analytics, just under eight percent of organisations switched their payroll provider last year – compared with 16.8 percent in 2019, according to our research. This means thousands of organisations know they don’t have the tools needed to effectively face the future they know is coming. Why is this?
Well, it’s no surprise that in our research the main reasons cited against switching to a new provider were ‘it’s too much hassle’ and ‘unable to secure investment’. What’s more concerning is that 43 percent said switching providers was ‘very difficult’ – a year-on-year increase of 264 percent.
Payroll providers must make switching easier. This requires an increased focus on implementation processes, onboarding best practice, as well as quality training and ongoing support across the industry. For this reason, Moorepay has committed to offering a simple switch guarantee. It’s an important first step in ensuring payroll teams aren’t left behind to face a future they know they’re not ready for.