COVID-19, working from home, flexible staffing and more all contribute to this list of payroll technology and payroll processing trends to watch out for in 2021.
For many organisations, COVID-19 has accelerated the need to review their payroll set up to deal with new layers of complexity. WFH has seen offices depopulated and workforces reconfigured, and cemented the need to improve the digital, real-time capture of working hours. Out-of-sight does not mean out-of-mind when it comes to processing payrolls.
1. We’ll have cloud with that, thanks!
Allied Market Research’s recent report says that the cloud-based payroll processing software market is expected to reach $10.33 billion by 2023. So it’s no surprise that as we navigate the ongoing COVID crisis, the desire to upgrade to cloud-based payroll processing continues to grow. Cloud payroll applications enable employees to access data remotely, and payroll processing staff to work without interruption. They also allow businesses to scale more easily (whether that’s up or down), and offers more robust cybersecurity.
2. The demand for real-time data.
The days of payroll reporting taking six weeks to generate are over. Given the car crash that was 2020, clarity of up-to-the-minute payroll commitments in 2021 is critical to produce actionable insights and make timely business decisions.
3. Goodbye to spreadsheets, hello to new payroll technology.
2021 will see a raft of innovations designed to rid payroll departments of their reliance on Excel, deliver touch-less payroll, and enhance the employee experience through self-service and more.
4. More payroll system flexibility.
As working arrangements continue to evolve under the massive cloud of COVID-19, so must the flexibility of payroll systems to cope with increasingly diverse employee agreements. And local and global freelancers, contractors, and part-timers will play an essential role in business operations and output. The emphasis will be on payroll systems that can manage compliance and taxation issues for a dynamic workforce.
5. AI-driven payroll to the fore.
The addition of a healthy dollop of artificial intelligence (AI) to payroll management will simplify payroll tasks, and streamline processes. Think automated employee classification which ensures everyone has the right tax code, and correctly calculated PAYE. AI will also help generate reports that have been slow, manual, and frequently error-prone in the past. And AI-based chatbots will play a significant role in cutting unnecessary expenses, saving time, and controlling budgets.
6. Better together — combining payroll with HR management.
HR management and payroll are traditionally separate systems, which, when combined, just perform better. With successful integration comes streamlined access to accurate employee data. For example, the functions of time tracking, scheduling and leave are usually handled by HR software. But when the information is shared with the payroll system, there is a significant reduction in both under- and over-payments. With employee work hours accurately tracked and recorded, it’s easier and faster to generate actionable insights. An HR integrated payroll solution also enables managers and staff to access all essential information from a single dashboard.
7. Pay transparency — you get how much?
When you have pay transparency, your company’s employee compensation figures are visible to others inside and outside the business. While it may go against everything you may have thought, and even generate feelings of anxiety, World at Work say that disclosing your pay structure has many benefits. These include reducing pay disparity, building employee trust and loyalty, and increasing employee retention.
8. We want our money now (not tomorrow)!
New options for real-time payroll distribution are expected to be hot this year. Millennial employees prefer to get paid immediately, instead of waiting for direct deposits or weekly/biweekly payments. And with so many employees using digital wallets instead of carrying cash or accessing bank accounts, electronic delivery methods to distribute payroll will trend. These will include 24/7 instant interbank electronic fund transfers which can be accessed via channels like laptops, smartphones, and of course, digital wallets.
9. Helping with money worries
Understandably, 2020 was a year of uncertainty for employers and employees alike. Workers worried about money are less likely to be productive, engaged, and motivated. Payroll experts predict that as a stress reduction measure, many forward-thinking businesses will incorporate a financial wellness program for employees into their payroll systems in 2021.
Successful payroll management and processes are key to a well-run business. While some of these trends may be in their early days, they all offer substantial benefits to both employers and employees, and we expect them all to become the norm over the next few years as payroll keeps pace with changes in attitudes and other business technologies.