Compared to the likes of finance or HR, payroll is measured by accuracy and has to strive for perfection; so how does this affect the profession?
In October, payroll and HR services provider SD Worx held a roundtable in partnership with Reward Strategy, at the Gherkin, in London. Attended by payrollers from some of the biggest employers in the world, conversations focused on challenges faced by the profession: dealing with legacy systems, international payment issues and payroll’s position within the wider organisation.
Creating truly global payroll
One of the biggest challenges for those operating payroll internationally, was the ability to create a unified global payroll system that works at scale. According to the 2019 Global Payroll Complexity Index, Europe leads the way when it comes to complex payroll systems, with France, Italy, Belgium and Germany taking the top spots. These complexities are down to various factors, including the review of national and local data legislation off the back of GDPR, as well as one third of governments having no schedule for tax legislation changes.
These create unique challenges for the payroll department because there are so many moving parts. People are often experts in their own country, but with each and every market having different rules and regulations, it’s near impossible to manage the payroll process centrally. Yet, the feedback was that other countries often rely on UK experts as they tend to understand the payroll system better, meaning that there is very little ownership over who is ultimately responsible for global payroll. This calls for the need for payroll experts at a local level in all operating countries, or a global payroll provider that has the expertise to run payroll successfully in every market.
Leave legacy behind
Payroll is difficult to manage, especially across borders, but during the roundtable it was also very clear that existing processes can make a difficult job even more complex. Payroll is often forced to retrofit against existing legacy structures, which means organisations are left with difficult to manage systems. This is why there were many calls from those at the roundtable to strip payroll software back and focus on getting the basics rights - including compliance, and then add-ons, like talent management and time and attendance, can be properly implemented.
The requirements to work in payroll are increasing because of the level of expertise needed, yet payroll staff still feel undervalued and believe they aren’t getting the recognition they deserve. This is partly due to the fact that it sits in a grey area – it’s not HR, but it’s also not finance. We’ve already established that payroll finds it difficult to get buy-in from the wider organisation and this is made worse by the fact that payroll isn’t always valued in the way it should be.
By 2025, however, businesses will be investing more in their payroll technology, according to 88 percent of chief HR officers and chief financial officers. This is a finding from the World’s Economic Forum research which shows attitudes are likely to shift and payroll will be seen as a more strategic business function.
The future of payroll
Payroll is a complex, but essential business function that rarely gets the credit it deserves. As with many sectors, professionals are hedging their bets on technology to simplify and improve processes. This gives payroll a real opportunity to spend more time on strategic tasks, such as analytics, to show just how valuable it is to the wider organisation.
Yet, it was clear from the roundtable that payroll shouldn’t rely on technology alone. Both organisations and payroll providers often make the mistake of forgetting the human element in technology and that is where the mistakes happen.
Ultimately, payroll needs to stop waiting for a seat at the table and invite themselves to the conversation, or use the data it holds to prove it’s worth as a strategic business function.