Australia
In the rapidly evolving landscape of HR and payroll, with the pressure to do more with less investment, it’s crucial to understand the link between payroll transformation and the employee experience.
HR and Payroll functions are increasingly operating in a complex and demanding landscape, often with conflicting requirements. Manual processes, hybrid working, outdated technology and intensifying compliance demands all add pressure and complexity to payroll.
Faced with these obstacles and wider demands to do more with less, it's perhaps unsurprising that 88% of businesses suffered payroll errors in 2022 that resulted in employees not being paid correctly or on time.1
Working Futures, a dedicated HR knowledge broker, recently hosted an event where a panel of HR and payroll experts discussed these and other factors at play in payroll transformation with Alight’s own Mike O'Donovan. They shared their thoughts on the role of technology and offered advice on what pitfalls to avoid when embarking on a payroll transformation journey.
Why is achieving accurate payroll a fundamental element in driving a positive employee experience? What component parts of payroll typically require transformation to support this?
In exploring the fundamental elements of payroll and its role in driving positive employee experiences, Simon Puryer from LACE Partners, cautioned organisations about the tendency to take payroll basics for granted. “If the basics aren’t right, you need to understand why and what the root causes are behind any payroll discrepancies”, he advised, while underscoring the importance of paying employees on time.
Jenni Flaherty of Alight Solutions built on this point: “People underperform if they’re not paid on time or correctly. And they talk about it.” She also touched on the significance of a simple, personalised employee experience, emphasising the value of data accuracy, easy-to-use apps and the integration of machine learning and AI in the payroll process.
SAP Solution Architect and Human Factor Podcast presenter Simon Humphreys agreed, championing the transformative potential of tools like pay-on-demand and similar self-service apps. He stressed that payroll should be viewed not as a routine financial transaction but as a tool that can enhance employees’ financial wellbeing and overall job satisfaction.
O'Donovan concurred, noting the growing interest in offerings such as earned wage access and the need for effective change management to show the transformative role payroll can play in shaping the employee experience.
What role does technology and processes play in driving the required transformation? How should we go about building the associated business case for change?
The panel agreed that technology plays a pivotal role in transforming payroll processes. From specific examples, such as apps that simplify payslip information to broader themes of unified technology experiences and the value of data analytics. They also emphasised the need for strategic planning, considering both technology and process changes, to build a compelling business case for payroll transformation.
As Humphreys noted, “We’ve seen a business reduce their service centre call volumes by 70,000 calls a year, just by developing an app to provide employees with self-serve access and improving the transparency in payroll data".
The panel went on to discuss the intersection of technology and process. Humphreys illustrated the power of a simple app in addressing customer challenges, reducing service centre calls and enhancing transparency in payroll data. O'Donovan succinctly captured the essence of the transformation goal: elevating the employee experience while optimising costs. Addressing concerns about app integration, O’Donovan emphasised their adaptability to various systems.
Building a business case
On the challenges of building a business case for payroll transformation, Puryer advocated for a value-driven approach that considers softer benefits and overall organisational improvement. He recommended a holistic view, taking processes and the operating model into account when implementing new systems.
The recurring theme was that, for a successful transformation, it’s less about the technical aspects than strategic planning. Collectively, they urged organisations to consider both technological solutions and process improvements for a comprehensive and impactful change.
When creating a case for change, what are the key lessons learned and key pitfalls payroll leaders should avoid? And what practical advice do you have?
On navigating transformative changes, Flaherty stressed the need for alignment at a global, regional and local level to ensure a smooth implementation process. She cautioned against unnecessary complexity, urging leaders to resist bespoke solutions that hinder innovation and scalability.
Puryer again recommended a holistic view, underscoring the importance of understanding current processes and challenges before envisioning the future. He highlighted the value of gaining insights into the reality of day-to-day operations to ensure organisations are addressing legacy issues and improving overall efficiency during a payroll system change.
Humphreys offered practical advice against narrowly focusing on just replacing one payroll system with another. He urged leaders to consider transforming core data and improving IT infrastructure, incorporating change alongside system transitions to avoid missed opportunities. He also spelled out the risks of maintaining the status quo, citing potential payroll disruptions and reputational damage.
The bigger picture
Similarly advocating a big picture approach, O'Donovan warned against overlooking the importance of the target operating model and change management programs, as organisations that neglect them often face implementation challenges, leading to poor employee experiences.
Concluding, Flaherty stressed the need for compliance and scalability, while also reasserting centrality of the employee experience. She championed a holistic ecosystem where various elements, including flexible benefits and payroll, coexist seamlessly to provide a unified and efficient employee experience.
Conclusion
Payroll transformation is a strategic undertaking with profound implications for the entire organisation. By aligning technology, processes and the broader business context, payroll leaders can elevate the employee experience and drive organisational success.
As businesses contemplate their own payroll transformation strategies, the insights provided by these experts can serve as beacons, providing direction in an ever-evolving landscape.
Payroll transformation isn't just about numbers and systems—it's about crafting a narrative of organisational excellence, where employees are at the centre of a seamless and empowering journey.
If you need help with a regional or global payroll transformation project, get in touch.
