Why we should be thinking about payroll innovation
We live in an age ruled by technology. It has entered every area of society. Nowhere is this more noticeable than in business and commerce, where companies are made and broken by the successful (or unsuccessful) implementation of new technologies and systems. Indeed, many regard any disruptions caused by such innovation to be well worth the cost.
One noticeable exception to this is payroll innovation. Due to the highly sensitive nature of salaries and wages, many managers are very cautious about innovating in this area. A poorly conceived project to “streamline” payment processes can be catastrophic, resulting in interruptions to salaries across the company. This has the knock-on effect that too many businesses today continue to operate with payroll systems that are outdated, inefficient, and clunky.
And sadly so. For the benefits of payroll innovation are huge.
As this week marks the UK CIPP’s National Payroll Week, let’s take a moment to consider the benefits and opportunities of payroll innovation for business.
What is payroll innovation?
The world is always changing. And as the world changes, so do we. Businesses of all stripes must constantly adapt and innovate to survive. Those that fail to adapt will fall prey to competition just as surely as the dodo did to the domestic pig. Payroll innovation seeks to ensure that the systems and technologies used by businesses and HR departments are at the top of their game.
Payroll innovation can take many forms. And as with most things, it can be context-specific. In some cases, the company may only need to change internal ordering and administration. The greater challengers seek to innovate and revolutionize entire technologies and processes.
Payroll innovation is neglected by most businesses. A survey released by Sierra-Cedar in 2017 indicated that, of businesses planning major projects in innovating business processes, only 8% were going to focus on their payrolls. Given how much innovative software is used in other departments, such as marketing or accounts, this is strikingly low.
Why is payroll innovation important?
Living in a digital age has left us all with changing expectations from the processes we experience in our daily lives. Having gotten pretty used to simple and accessible sources of data, our tolerance for slower and cumbersome systems is limited. This tolerance is reduced even further if the systems in question are responsible for our paycheck.
Disruption to a company’s payroll due to an ineffective and clumsy process or software can have dire ramifications on the company as a whole.
In order to ensure the motivation and engagement of their employees and to streamline their own operations, many employers are looking into more effective ways of managing payroll systems.
Globalization increases the need for payroll innovation and process streamlining
Companies are growing more global and more diverse as they expand. Nowadays, people in larger companies will be geographically dispersed, whether nationally or internationally. And as access to the global talent pool increases, new strategies will be needed to ensure that employers can properly utilize the human capital available to them.
The movement of employees across the globe, as they transfer to different locations and move into new geographic areas, creates new challenges and complications. Different nations, regions, and entities will all have their own laws and regulations regarding pay and employee rights. And that’s even before you get into things such as exchange rates, differing costs of living, and region-specific requirements.
Innovation in payroll systems and the technology surrounding them are crucial for staying agile in today’s dynamic landscape. Yet, even today, not all companies are keeping on top of their payroll processes. And that is going to cost them in the long run.
How does payroll innovation benefit business?
The benefits of payroll innovation are many. And companies are increasingly seeing the value in investing in this area.
The most obvious and immediate benefit is that – in theory at least – paying your employees is easier and more efficient. A reliable and quick system can be set to make sure that employees are paid promptly and accurately. Knowing that their wages and salaries are safe, this, in turn, will keep them motivated and productive. This also allows resources that may otherwise be dedicated to doing this to be reassigned elsewhere.
These systems are also largely transparent and utilize greater employee engagement. In turn, this reinforces a sense of trust and satisfaction. Many allow employees to track their pay, how it’s broken down, expenses, bonuses, and taxes.
Another advantage to payroll innovation that employers can enjoy is greater oversight into the individual payments and details of each individual. This can be used to monitor individual employee productivity, attendance, overtime, additional benefits, and bonuses. In turn, this will lead to improved insight and accuracy of the company’s payroll and minimize errors.
The material gains here should also be obvious. Knowing exactly how much each employee should be paid will reduce unnecessary expense and improve profit margins.
If pursued effectively and intelligently, payroll innovation can be a tremendous boon to any business.
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