Q2. Why are HR leaders looking to upgrade their payroll systems?
Again, controls, visibility, policies and governance, integration with data from other functions or parts of any business, process assurance and efficiency, and the visibility standardized, and centralized data provides to ensure efficiencies and process improvement and ultimately colleague experience.
HR directors are also keen to bring payroll in line with the transformation of other HR functions. In many larger firms, overall HR platforms, learning and development, recruitment, reward, and recognition, for example, are now largely self-service. Accessible via a mobile device these are great for anyone not in a desk-based role. For HR, this increases the likelihood of people engaging and taking advantage of L&D resources and career advancement opportunities.
The competitive advantage for both business and talent acquisition that come from the clarity, insights, and governance process standardization brings are manifold.
The operational benefits of single source, real-time, and highly accurate HR insights and data exciting the wider boardroom too. Nearly all decisions, current and future, loop back to people, may this be talent availability, costs planning, supply capabilities or performance, for example.
For those able HRDs able to provide these though the pandemic has raised the profile and status of all HR departments. There is a clear link to the performance of firms with digitized business processes and those without through the pandemic. This loops back to why there is such a leap in proposed spending for modernization of HR and payroll the world over,
Pre-pandemic, with payroll the thinking tended to, “it’s on premise and it works, let’s leave it.” Lockdowns proved that “it works” is not enough. The past few years proved too many legacy and on-premise payroll systems don’t have the dexterity needed for the modern world.
While some are fast reaching end of life for support, the major issue with older payroll set-ups is they’re near impossible to access remotely without significant IT support investment, which took time. This raised the risk of missed payroll, leading to potential loss of staff loyalty, and compliance failure. Both costs too great to carry off in an already crisis situation.
The GPCI also reveals some more hidden challenges including the very real possibility of unidentified payroll leakage. Year on year this can cost US businesses tens of millions of dollars until identified. For some this might never be.
For HR, this adds to the total cost of payroll and so reduces funds available for not just talent acquisition, but the training and development of much needed people. The business case for payroll modernization has never been stronger.