Six payroll trends to keep you ahead in 2022

The world of business has changed dramatically over the last two years and few departments have escaped the need to keep up with changing needs and trends that have moved even faster than usual. There’s been a dramatic shift to hybrid working; changing where, when people work and even how they are compensated for their efforts. An increasingly remote workforce means that employees are now spread all over the place — and organisations have hired people much further away than they would have previously.

In some ways this has increased the hiring pool, enabling businesses to tap into talent not just nationally, but also internationally. It’s not unusual for multi-disciplinary teams to be based from all corners of the globe. This has brought new challenges for payroll departments who must compensate people in countries where there are different currencies, data processing and protection laws and even different cultural expectations. For those who thought payroll never changes, they need to think again. Here we look at six payroll trends that are re-shaping the way things are done.

The world of work has evolved in a few years in what normally could have been expected to happen over a much longer period of time — and we’re not just talking about COVID. For sure, the pandemic greatly accelerated the flexibility trend, bringing swathes of people out of the office into the home and other remote working locations. This was an acceleration of a trend that was already happening. Employers have been experimenting with not just where people work, but with when and for how long. By giving people access to flexible start and end times and allowing hours to be compressed into few days, organisations have been able to differentiate their employee offering and retain coveted staff.

In fact, in Belgium workers now have the right to request a 4 day working week without any affect to their salary. They simply need to work longer over the days they do choose to work. Another trend bubbling away for some time has been the gradual prominence of the Gig Economy. With the gig economy, people have been able to tap into contingent work as quick as a flash. It’s synonymous with apps like UBER and food delivery drivers. They can work where they want, when they want. There are also gig work platforms for knowledge workers doing all kinds of commercial operations. And that means that employers and payroll departments have had to adapt fast to this new way of paying people, often in the absence of traditional work contracts. Some gig workers receive an hourly wage, plus a ‘piece rate’ for each successful transaction they complete. This hasn’t made things easy for payroll software and teams who aren’t geared up to pay and calculate these complex situations.

Whilst we’ve just talked about the increasing need to pay a global workforce, payroll teams are still having challenges managing payments in a single country, even in 2022. In Australasia in particular, the complexity and ambiguity of the Holidays Act in New Zealand and the pay awards system and changing STP requirements in Australia, payroll teams still struggle to confidently know if their payrolls are meeting the required legislative or Fair Work obligations. Teams are right to fret about this tricky issue. Even government departments have struggled to interpret the legislation, leading to some very high profile public enquiries and awards of compensation to those who were not paid, were paid late or paid the incorrect amounts. The complexity of meeting legislation and changing Award conditions means that payroll teams in organisations of all sizes struggle to calculate pay, holiday payments, other deductions and have the correct data exports, often using a combination of payroll systems and even spreadsheets — causing even more scope for error. Whilst this issue continues to rear its ugly head, payroll teams can simplify their day-to-day operations by using systems that are specifically designed to meet the local tax and holidays regime. Many of these platforms provide automatic updates, ensuring the latest government legislation is reflected in pay calculations.

Worldwide, cyber attacks are on the rise and the criminal organisations behind them don’t discriminate on who is left to pick up the pieces. In New Zealand, The Privacy Act requires organisations to safeguard the information they collect, process and store about customers and their workforce. Payroll systems tend to contain some of the most sensitive information about your people — everything a criminal needs to start making fraudulent transactions online. Breaches and careless handling of data not only create an internal nightmare — there’s the loss of trust, credibility and the fines that you might be asked to pay by the Information Commissioner. The increasing remote nature of the workforce mean they’re accessing company systems from home, from coffee shops and other places that your own IT department can’t control. The same goes for your payroll systems. Employees will routinely log-on to view their pay-slip and request holidays. Meanwhile your payroll team itself may be working remotely. This has given cyber-criminals even more opportunities to target your business. The Cloud is one of the best things ever to happen to enterprise IT — but it has brought vulnerabilities to businesses of all sizes. When you’re choosing a cloud based payroll platform, remember to choose one that’s built secure from the ground up, with the added benefits of secure access via two-factor authentication. Cloud based payroll software like Jemini are built on the Microsoft Azure platform, meaning they offer world class security, availability and even redundancy (backup) to ensure your people always have access to the payroll information that is so business critical.

The pandemic brought financial anxiety and strife to people on every rung of the pay scale. However, it was lower income families who bore the brunt of this, turning to payday loans and other sources of emergency cash. In the global payroll arena, more and more people are talking about EWA or Earned Wage Access. It’s a technology that gives employees instant access to a proportion of their accrued salary from a self-service app. Money can accrue in this app each day, allowing employees to access funds if they need to. Whilst this might not be relevant for every business or sector, this type of payroll innovation can help people who might normally struggle between paydays and need urgent funds for something that they’d normally turn to a ‘payday loan’ or credit card for. Payday loans and other sub-prime forms of lending tend to be associated with high interest rates and can lead people to get further and further into debt. Whilst it’s early days for EWA, it’s bound to be something that increasingly becomes the norm.

The words ‘employee experience’ are being used more frequently everyday and organisations are looking at a host of ways to build out a ‘compelling’ offer that attracts and retains the best talent. Employee experience can cover so many different aspects of the workplace. But one thing employees take for granted today is easy, instant and secure access to things like their payslips, pay history and the ability to make instant requests for holidays and leave. Whilst a lot of us take services like this for granted, there are still organisations reliant on legacy systems that just can’t offer this yet — as part of the wider employee experience.

With the speed of change happening in organisations of all sizes, Managers and Leaders alike need access to up to the minute information to make quick informed decisions. We’re now in the era of real-time payroll data and analytics. There was a time when only one person could open the payroll file at any given time. Multiple people couldn’t access the systems in parallel — and systems could only process one payroll at a time. Not ideal for the modern demands of business. The good news is, with the trend towards an increased need for real-time data, technology has caught up. Cloud based payroll solutions provide the detailed insight, reports and analytics needed to give a real-time view of payroll as well as projections for the future. What’s more, the inclusion of AI technology means that payroll software can detect potential errors and alert on them, before errors are made.

If you thought payroll was staid, these trends show that there continues to be real innovation that is making a tangible difference for employees, payroll professionals and business leaders alike. Payroll can and will continue to add more and more value to the organisation; it’s time to reap the benefits.