Once seen as a ‘back office’ function by businesses/organisations, payroll is becoming an increasing focus for business strategy and success. Having been central to coping with dispersed workforces and fluctuating employee working patterns in recent years, leaders are now focusing on the payroll to influence other business-critical areas.
Research conducted by online payroll services and workforce management software provider, Automatic Data Processing (ADP), reveals that cybersecurity, scaling operations, legislation and driving strategy are the biggest priorities for payroll senior leaders.
What were the research findings?
The Potential of Payroll report surveyed over 1,463 business leaders (employers) responsible for payroll to identify the factors that will drive global payroll in the next two to three years. Results show that almost half (44%) are planning to improve data security, followed by the accuracy of employee pay (36%) and reporting capabilities (32%).
Following high-profile data breaches by global companies such as Twitter and Uber, as well as Australian organisations Medibank and Optus, it’s not surprising that data security topped the list of planned payroll improvements in the next two to three years at 44%.
Protecting payroll is very urgent and present danger for many businesses in Australia and across the Asia pacific, with 61% of global respondents reporting that their payroll operation had been impacted by a cybersecurity breach once in the last 24 months.
Despite global skills shortages, a looming recession and other challenges, many businesses are looking to scale up their operations. For most firms, it means more people, which is why 36% of businesses are planning to increase the accuracy of employee pay reporting. Additionally, 31% plan to increase the timeliness of employee pay.
These efforts will help to address the current issues, with more than half of respondents (56%) reporting that they currently don’t have full visibility of payroll performance, accuracy and other data across all their international locations.
Working with payroll experts will also help businesses address the current skills shortage, with 48% saying they have difficulty finding payroll skills from outside the business. Additionally, 64% have resorted to training non-payroll staff to fill this need.
Global businesses are being hindered by inaccurate and inconsistent payroll practices. Nearly a third (30%) of finance and HR leaders reported that they are not confident that their payroll systems could support their plans for growth, or geographic expansion.
Two in five (40%) payroll leaders reported that each country has different methods of tracking compliance performance, which has led to a focus on planned regulatory compliance (22%) in Australia. Additionally, almost a quarter (23%) of respondents would like to transform their operations to deliver standardised multi-country payroll processes.
Payroll is influencing strategy at the top level with nearly half of respondents reporting an increase for relevant data from senior management. These metrics are being used to inform cost management, growth, and diversity, equity and inclusion (DEI) strategies.
Currently, many businesses lack the right tools and big data to inform insights, with only 40% implementing global dashboards and just 29% using real-time analytics. This has contributed to 32% of payroll leaders’ desire to improve reporting capabilities.
Additionally, the opportunity to drive efficiencies and other opportunities across business units, markets and organisations is a focus for 25% of respondents, who are looking to increase integration with payroll and other business/organisation critical systems.
What were the executive thoughts on the findings?
These concerns mirror those of payroll leaders in Australia, says Kylie Baullo, Managing Director ANZ at ADP. “Data shows that in Australia and Asia Pacific, the same organisational issues and opportunities are being identified across the board that the firms want to address in the soon. This may put add pressure on existing cybersecurity, HR and operational skills shortages as the global talent war stretches itself further.”
“Firms are aware of the urgency of putting the systems in place to protect their data. Almost all (98%) of the senior payroll leaders surveyed felt that data security had become more important since last year”. But less than half said that they have a full contingency plan in place across their business locations – this lack of action is a major concern.
“Recent high-profile data breaches have demonstrated how sophisticated these breaches are becoming to businesses/organisations. That’s why it’s becoming ever-more important to consult experts that specialise in keeping payroll and HR data safe,” she adds.
“Complex and variable working patterns and schedules have meant that almost half of the respondents experienced a rise in payroll queries from employers. Outsourcing of payroll can raise the accuracy of this data which increases employees’ workplace satisfaction.”
“While it can be tempting to look for the quickest solution when it comes to setting up payroll in new business areas, this can be a false economy. Outsourcing to payroll experts who offer consistent and integrated systems, while also factoring in regional differences, provides businesses with a universal perspective of their payroll,” says Mrs Baullo.
“Payroll leaders are becoming integral to not just their roles, but business performance. As a plethora of opportunities and issues present themselves, those that find expertise to support them will keep pace and exceed their peers,” concludes Mrs Baullo.
For more information on ADP’s payroll and HR software solutions, go to the website.