Q2. Why are HR leaders looking to upgrade their payroll systems?
Controls, visibility, policies and governance, integration with data from other departments, process assurance and efficiency, standardized visibility, and centralized data ensure better pay equity.
HR directors are also keen to bring payroll in line with the transformation of other HR functions. In many large firms, functions like learning and development, time and attendance, and leave administration 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 with and taking advantage of L&D resources and career advancement opportunities.
The competitive advantages for both business and talent acquisition that comes from the clarity, insights, and governance process standardization are manifold.
The operational benefits of single-source, real-time, highly accurate HR data excite the boardroom, too. Nearly all decisions, current and future, loop back to people – talent availability, cost planning, supply capabilities or performance, for example.
Throughout the pandemic, those HR directors who’ve been able to deliver such transformation have raised the profile and status of all HR departments. There’s been a clear link to performance among firms with digitized business processes and those without such processes. This loops back to why there is such a leap in proposed spending for modernization of HR and payroll globally.
Pre-pandemic, conventional thinking around payroll was generally, “well it works, let’s leave it.” Lockdowns proved that “it works” is not enough. The past few years have proven that 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 nearly impossible to access remotely without significant IT support investment. Such investment takes time, raising the risk of missed payroll, potential loss of staff loyalty, and compliance failure. Both costs are too great in an already crisis situation.
The GPCI also reveals 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. This adds to the total cost of payroll and reduces funds available for talent acquisition, training and development of much-needed people. The business case for payroll modernization has never been stronger.