The disruption of the last couple of years has been a big wake-up call for most organizations. While work practices were changing, the pandemic accelerated the move from the office in massive volumes, putting business systems to the ultimate test. It was a watershed moment, and in some cases, it highlighted the inefficiencies of traditional operating models. Out of the blue, it became imperative for companies to have access to their systems regardless of location. This transition was even more significant for payroll teams as they sought to function as usual despite the seismic shift in workplace operations. Many were not ready for the demands of the new working paradigm, and others realized how outdated or fragmented their solutions were, inevitably raising doubts about their efficiency and security. Many organizations learned how their lack of data standardization and processes causes problems and hampers the company’s ability to make strategic decisions.
Challenges of manual inputs
As enterprises worked to adapt to the new world order and efficiently introduce digital transformation initiatives, one area highlighted as a source of concern was the reliance on manual transactions. The following issues were identified due to this behavior.
- Inaccurate payroll processing
- Inaccurate reporting
- Poor decision-making
- Substandard employee wellness experience
- Compliance and security issues: a startling 71% of organizations rely on excel for their payroll processing and analysis.
Digitally transforming payroll processing
Digital innovation has steadily transformed payroll from a back-office processor to the nerve center of most organizations. How? In a word, data. Payroll is an incredibly data-rich function of any organization. And when companies can optimize this data via digital transformation initiatives, this is where the true transformative power lies. Global payroll solutions that incorporate leading technology, including robotic process automation (RPA) and artificial intelligence (AI), to provide payroll teams with the means to gather and put structure on this data is when companies can begin to see the potential and power of the transformation.
Benefits of automation:
Transitioning from manual processes to technology-enabled ones offers the payroll function the following advantages.
- Optimize your HCM: synchronization of data ensures one truth for the whole organization. No manual entries mean greater accuracy.
- Realize time and cost savings: reduce global cut-off times.
- Generate powerful data analytics: analyzing valuable payroll data and predicting payroll next month or quarter delivers actionable insights that aid agility.
- Increase compliance: better compliance with international and country-specific local laws, tax requirements, and risk management in local markets provides global capability with a local feel.
- Introduce standardization: homogenize disparate payroll operations to enable accurate payroll processes. Having comparable data that truly allows you to compare apples to apples means that you can generate reports such as the gender pay gap to ensure pay equity across the enterprise.
- Increase data security: transferring highly sensitive data, such as payment amounts, home addresses, in a secure data framework is very important. To avoid fines and loss of confidence, sensitive data must be securely housed and its access closely monitored.
Why enabling a positive employee experience is important
Payroll remains at the epicenter for employee financial wellness and, as such, must provide transparent, accurate, and timely results to ensure employee confidence. One of the measures of the efficacy of payroll is how companies deal with exceptions, those payments which are not standard. And in an increasingly complex work environment, the payment of those exceptions could decide the employee’s experience and, in turn, can make or break an organization. Remember, one study showed that 49% of workers would seek new employment after experiencing two problems with their paycheck. And with an increasingly tech-savvy workforce, employee expectations around how and they receive their remuneration will continue to increase. Paying people can be difficult but is central to every company’s success. As companies move into new markets globally, managing the complexities of compliance will be a top priority, and the payroll team will be challenged to scale, navigate volatility or remain agile.
How to start on the journey of digitalization
To embark on the digital transformation of your payroll, it is essential for payroll professionals to understand the nature of the process. Payroll professionals will need analytical skills to read and interpret the data to identify trends and workforce patterns. Therefore, the data itself and how accurate and how it is collated becomes critical. Standardization of the payroll process and data is the natural first step.
Once gathered, this data, both historical and real-time, can then produce variability and performance reports revealing trends and creating one single truth for the business.
Digital transformation of the payroll process enables greater accuracy and clarity. It saves time and money and provides greater agility, compliance, and security, all of which add up to placing global payroll at the center of operations.
Please listen to our free on-demand webinar, Global Payroll Transformation: Taking a Practical Approach, for more on this topic.