As technology transforms payroll operations, payroll professionals need to expand their knowledge beyond the basics. Technology is essential to the success of a modern payroll operation. However, the movement away from manual processes and toward solutions for automating, integrating and digitizing payroll functions, systems and data is still a relatively new development for payroll. Many organizations have been slow to adopt new innovations, such as cloud computing, in business-critical areas like accounting, finance and payroll, due to concerns about security, privacy and cost.
However, it is becoming more difficult for organizations to justify not investing in technology that can increase the accuracy, efficiency and speed of their payroll operations, reduce compliance risk, and make it easier for employees to do their jobs. That is why more organizations in North America are finally embracing cloud computing, mobile computing and big data analytics for payroll. While these technology trends have been transforming business operations for years, it is important to keep in mind that they are only beginning to impact how many organizations in Canada manage their payroll operations. Here’s a closer look:
Two major advantages of using cloud computing for payroll processes are cost savings and flexibility. As an organization grows, it can expand its use of cloud services, as needed, without extra hardware purchases and with little or no software. Automatic and routine software updates and data backups are also appealing features of cloud solutions, especially for small and mid-size organizations with lean finance and IT functions. Another benefit: Cloud-based payroll software solutions can help organizations stay current with tax compliance and other regulations and keep up with reporting more easily.
As the mobile payments market grows — and organizations become more application-centric — more employers are exploring how to make pay and benefits information easily accessible to their employees through mobile devices. This is an emerging area of payroll technology, but many organizations are already using mobile apps that enable their employees to view current and past paycheques, track time, file expense reports, change withholdings, and more. Organizations that engage remote or contract workers, or have large numbers of mobile workers, are among the early adopters of these solutions. The mobile computing trend will no doubt become even more significant to the payroll function as human resources (HR) teams increase their use of mobile applications to interact with employees, especially millennial workers.
Big Data Analytics
Organizations are analyzing both payroll and HR data to find ways to increase efficiencies, drive revenue and reduce costs. Payroll data can provide a wealth of insight about an organization’s operations. For example, if management knows how much overtime the organization is paying employees, they can determine if it would be more cost-effective to outsource certain tasks or engage interim staff to assist core teams during workload spikes. And some organizations are now using advanced analytics tools to gain insights from payroll and HR data that can help shape their strategies for reducing employee turnover, budgeting for training costs and more.
As these technology trends transform payroll operations, employers’ expectations for payroll professionals are changing, too. Payroll specialists must keep their skills current, but also expand their knowledge beyond the basics. For instance, they will need to become effective at managing data and processes when the organization decides to embrace automation. Soft skills, such as communication, are also paramount, as organizations rely more on payroll outsourcing and look to payroll staff to collaborate closely with other departments like HR.
This article contains excerpts from Dialogue Magazine, a publication by the Canadian Payroll Association that is provided as part of their membership benefit package.