Nick Day, CEO at JGA Recruitment Group had an opportunity to sit down and discuss the Future of Payroll with Kate Brown, Marketing Manager at KeyPay.
Kate is asking the questions!
In Part 1, we discussed the perception of payroll and how its value must be portrayed in order to drive change in the accounting industry.
By implementing cloud-based tools that automate the compliance side of payroll, accounting practices can open up a previously untapped revenue stream, increase profit margins and free up time to focus on adding real advisory value to clients.
We continue our conversation with Kate asking Nick about technology trends in payroll, and how to embrace innovation to enhance profitability.
Kate: What should payroll professionals look for in technology?
Nick: Robotic Process Automation is massive at the minute. Everyone’s interested in how they can look at automation to take the mundane tasks off their desk. For payroll professionals to have a strategic board, they have to outsource or automate some of the admin stuff. Those mundane tasks of checking and entering all have to be eliminated. The next step is not only automating the task itself, but actually seeking software that allows them to interpret the data intelligently, so they can use this strategically.
Kate: How can you use data to drive value?
Nick: I’m not a payroll manager, but here’s an example. Let’s say I’m a payroll and benefits manager and I’m able to analyse huge volumes of data regarding benefits updates. I can see from looking at that data that actually, some benefits are just not being utilised by the employees, but other benefits are. If I do that at scale, I could create a significant cost saving for the business, by removing the unused benefits and adding more relevant ones, or changing the way that we offer benefits altogether.
Payroll managers are keen to get more involved in that kind of strategic area. That’s something that automation can really help with. That’s going to be an exciting part of the future payroll manager.
What changes in technology have you witnessed throughout your career?
Nick: When I started in the industry, hours were tracked using clock cards and it was extremely manual. The idea of having a cloud-based solution just wouldn’t have existed; it’d have been a dream. There has been a huge shift to ‘employee self service’. And as employees want more transparency about how they handle their data, I think we’re going to see that improve.
In the last 12 months, we’ve seen a big increase in what the functionality of those systems can offer: things like pay on demand and interactive payslips have been real wish lists for clients. We’ve definitely seen a huge increase in RPA technology.
The biggest shift we’ve seen is people coming away from an all-in-one system and rather looking for best in class elements that they can integrate with a payroll system. People are therefore looking for payroll systems that can integrate well with an open API.
People are wanting to experiment or at least find out more about technology. Things like chatbots and blockchain technology: there’s definitely a lot of interest in it and a lot of inquiries, but no one has been quite brave enough yet to take it on.
Kate: You mentioned that some payroll professionals are concerned about automation making their roles obsolete. What are your thoughts on this?
Nick: In history, every time there’s been an advancement in technology, it has actually created more jobs than it’s lost. For example, the Industrial Revolution. If you can automate more, it’s not getting rid of jobs. If payroll professionals can make themselves more efficient, then they can grow their businesses quicker. And when you grow, you expand and when you expand, you’re going to need more people to handle that expansion. Administration tasks will therefore be replaced by more strategic roles.
Additionally, we always need humans overseeing these systems to make sure they’re running effectively. If we didn’t have payroll people on the ground able to ensure quality control and understand that payroll process, then the world would be in trouble. You can have systems automate everything, but you still need an expert behind them.
Kate: How is the role of the payroll professional changing as a result of technology?
Nick: We’ve been recruiting for a lot more payroll analytical roles coming into the market; a huge number of hybrid based roles between payroll rewards, HR, payroll finance, that weren’t there 2 or 3 years ago. Technology is advancing year on year, and as a recruitment company, we’ve grown year on year. This shows that there have been more vacancies and more need for payroll staff rather than less.
For more insights on raising the profile of payroll in the accounting industry, see part 1 of Nick’s interview.