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Payroll Complexities Simplified: New Payroll Solutions to Modernise Compensation


With business recovery efforts under way, employers are now poised to scale their operations once more. But, first, they need to simplify payroll complexities brought about by the recent crisis and changing work trends.

An organisation that aims to scale its business will need to have laser-sharp focus on its "big hairy ambitious goals," as well as its strategy, if it is to expand successfully. To do this, the company must ensure day-to-day operations, such as workforce management, are running like clockwork.

Part of the function of managing the workforce effectively is managing the payroll efficiently. Of course, formulating policies on compensation & benefits is largely a strategic endeavor. After all, firms would want to explore newer ways of aligning their talent programs with financial goals. But keeping payroll on track is indispensable to the administrative part of this process.

Payroll management is the backbone of an effective compensation & benefits strategy, and it proves the organization’s commitment to enhancing the employee experience. Yet, for payroll management to run smoothly, high-growth companies can no longer rely on paper pushing or manual methods that are prone to human error, or on legacy HR information systems that are unable to quickly integrate newer modules. Firms are better equipped to scale their operations with a powerful cloud-based payroll solution that changes with the times.


How payroll management is evolving

Since the shift to hybrid working, for example, companies have been examining closely the impact of new work models on how hours and output are accounted for, and how workers are remunerated. Add to this the fact that the "work from anywhere" trend opens an entirely new discussion on compliance, with labor laws governing pay policies based on the employees' location. In the long run, this could influence how companies plan compensation for a distributed workforce.

Times are indeed changing, and so are payroll solutions. In fact, according to our Global Payroll Complexity Index 2021, two in every five employers (40%) are said to be modernizing their payroll systems by 2023. More companies are now migrating to the cloud (61%). The main reason? They want to leverage rapid calculations and to streamline accounting and payment practices at scale.

As Luca Saracino, Growth Leader - International at Alight, explains: the payroll function today is becoming "increasingly complex". Employers "struggle to keep pace with shifting workforce demographics" amid the COVID crisis.

"It was a major achievement for companies to keep payroll running at times when business continuity was challenged, but it was far from ideal," Luca says. "Clearly, HR and payroll leaders are eager to realize the benefits of digital payroll."

Companies (62%) that participated in the study are set to undergo digital transformation in the next two years. This includes enhancing payroll systems in the face of bigger business challenges:

  • Addressing regulatory risk (42%)
  • Developing corporate strategy for outsourced business processes (39%)
  • Setting up cost controls (27%)
  • Responding to payroll talent shortages (19%)
  • Preparing for M&A and business divestment activities (15%)

As the Asia Pacific endured lockdowns and their subsequent economic toll, employers in the region were forced to reconsider automating regulatory aspects of payroll management. For one, frequent updates to public health policies, employee retention programs, and wage subsidy schemes across different countries, states and territories meant that HR and payroll managers had to update their payroll systems manually to reflect these policy changes. This raised the risk of committing payroll errors.

This is the reason why employers need a comprehensive cloud-based and end-to-end payroll solution that is accessible to leaders safely and securely; enables accurate data processing at scale, and guarantees a quick response to legal and compliance risks.

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