To celebrate #NationalPayrollWeek, we wanted to highlight the incredible work Payroll Professionals have done, specifically during the pandemic.
The global pandemic had a significant impact on the payroll landscape. Payroll professionals proved they could decipher new legislation and keep the world paid while the rest focused on containing the virus. A global shift to remote work coupled with unprecedented increases in staff absences due to illness, quarantine requirements, or caregiving responsibilities presented challenges for global payroll to navigate—but navigate them they did.
In the U.K. alone, the Coronavirus Job Retention Scheme (CJRS) supported over 11.7 million jobs, providing grants to employers to retain and pay staff during the pandemic at the cost of £70 billion. Suddenly, global payroll found itself in the spotlight. As payroll professionals worked to keep the world paid, global leaders, such as Australian Prime Minister Scott Morrison, publicly acknowledged the industry “for playing your part in what has been an extraordinary effort.”
So, almost two years on, what has changed, and what has been the lasting impact?
The Remote Working Experiment and the Global Response
The most prominent and visible impact is the sudden shift to remote work. The pandemic created the most significant global payroll home-working experiment of all time, providing payroll professionals with the opportunity to prove they can deliver accurate and compliant payrolls remotely.
The shift, coupled with the rise in prominence of the profession, led to technology companies waking up to the size, scale, and transformative possibilities available within the industry, with an estimated value of over £25 billion in Europe alone. Advancements in technologies followed, infiltrating all aspects of the payroll cycle. These solutions relate to automation, artificial intelligence (AI), and machine learning (ML) and aim to improve payroll efficiency, deliverability, transparency, and accuracy.
Such changes have also resulted in an explosion of new global payroll career pathways that transcend traditional process-orientated tasks in favour of responsibilities concerning analytics, software development, sales, strategy, data science, process improvement, quality assurance, and customer success.
The Gig Economy
The pandemic led to business closures and widespread job losses, which resulted in many turning to gig work to make ends meet. The increased number of independent contractors, freelancers, and other gig workers presented new challenges for global payroll professionals. More pertinently, business had to reassess how they pay these workers.
Since the pandemic, we have seen increased global adoption of earned wage access, direct deposit, and other digital payment methods penetrating payroll infrastructures. These payment processes cause new compliance challenges for payroll professionals. However, their global adoption rates show no signs of slowing down. In the U.K., there is considerable talk about the potential dissolution of the monthly pay cycle. It is hard to make a case against it if it is what employees want. The costs associated with employee attraction and retention are simply too significant to ignore.
The pandemic highlighted the importance of employee wellbeing, specifically concerning financial health and mental health. The unanticipated shift to remote work and the fear and uncertainty caused by the pandemic led to unprecedented levels of employee stress and anxiety.
Meanwhile, furlough schemes encouraged people to think about and plan for their financial health more carefully. The result is that post-pandemic, employees are now requesting more access to information about their pay than ever before, which has resulted in payroll departments implementing innovations such as interactive payslips to help employees plan their financial savings and expenses more effectively.
The fundamental role of payroll will always be about ensuring people are paid accurately, compliantly, and on time. Therefore, it is easy to see why there is no margin for error when it comes to employee financial wellness. Get payroll wrong, and the impact can be profound. Public trust wanes, and employee financial health suffers, further affecting employee mental health. Such factors significantly influence the ability of an organization to attract and retain talent.
The Great Resignation, which followed the pandemic, turned the dial up even further on the importance of employee engagement in this equation. Subsequently, businesses began to recognise and appreciate payroll’s critical and central role in supporting employee attraction and retention strategies. Suddenly, investing in global payroll was a business priority.
Data Analysis, Strategic Data
When businesses were forced to navigate the economic challenges caused by the pandemic, many turned to data to better understand their operations and to help them make informed decisions about their workforces. Payroll handles more data than most other functions combined. This realization led to an increased demand for solutions that can provide improved data and reporting. As a result, global payroll professionals with data analysis skills begun to support companies with insights, identifying process improvements and trends that can benefit strategic decision-making. For example, data concerning regional pay gaps, employee retention, overtime, absence, sickness, turnover, or compensation are all reports that can help support strategic business objectives.
The increased focus on strategic data has strengthened the case for payroll professionals to be involved in decision-making at their organisations. As a result, payroll executives now find themselves at the heart of businesses, often in the intersection between HR and finance, providing critical insights that may help a business to scale, achieve organisational change, address attrition, improve benefits utilisation, or advance the employee experience.
Global Payroll, Cloud Technologies
The widespread adoption of remote working has increased opportunities for businesses to recruit talent from across the globe. Talent pools can now be accessed and onboarded from anywhere, resulting in organizations becoming international overnight.
This evolution has impacted and challenged practically every part of the global payroll process. The pandemic put colossal pressure on global payroll processes, highlighting how important it is to keep up to date with changing international legislation. Payroll laws continue to change regularly, and payroll operations have had to evolve to overcome these challenges while keeping payroll data secure.
Subsequently, post-pandemic, we have witnessed many organizations investing in cloud-based payroll solutions to help them navigate ever-changing compliance, accommodate remote-based payroll teams, and provide enhanced levels of cybersecurity. Cloud technology allows organisations to use and analyse data to make faster decisions. The benefits are extensive, and the global payroll landscape has changed forever, especially with the barriers to international recruitment removed.
Evolution From Back-Office to Strategic Decision Making
All the elements explored have contributed to helping global payroll evolve since the pandemic. No longer is payroll just a transactional, reactive function. In our new world of work, payroll is expected to contribute strategic advisory support to help companies identify trends, improve talent engagement, and support the futureproofing of broader operations.
Businesses are waking up to the power of payroll data and how it can be utilized to inform strategic decisions. This wake-up call will also encourage more organizations to reassess their payroll strategies. Expect more investment in automation, AI, data analysis, customer engagement, and other technologies that boost strategic insights and improve the employee experience. Expect transformation.
The global payroll industry has placed itself at the heart of the employee experience. Payroll has evolved from an invisible back-office, transactional operation to a visible, data-driven strategic powerhouse. In addition, new global payroll career pathways continue to emerge to overcome the challenges that new technologies, cybersecurity, big data, global compliance, and employee wellness will present.
Global payroll professionals will need to keep many plates spinning concurrently. Organizations appear to remain committed to investing and improving payroll infrastructures that enhance the employee experience. The pandemic has shown businesses that now is the time to prioritize their people, which means prioritizing payroll.
The global payroll landscape has shifted. Gone are the pre-pandemic days of transactional, reactive payroll. We now welcome a new innovative, solutions-driven, strategic dawn. Global payroll has been reborn.
JGA Recruitment Group| Payroll & HR Recruitment
E-Mail: [email protected] | Tel: 01727 800 377
Copyright©: JGA Recruitment Group 2023