Future Of Payroll: 7 Trends to Watch

The pandemic has changed the way businesses work. Work from home is now the norm, even amongst traditional sectors. Technology is even more seamlessly integrated with everyday work and people are slowly coming to terms with the new reality. And most of these trends will continue to remain, long after the pandemic is over. 

With HR technology altering the landscape of work, payroll to is undergoing a shift. According to a report, The aspect of Human Capital Management is expected to have the largest chunk with over 20 billion dollars in investment while the Payroll software might be valued at $8 billion. 

Read on to stay abreast with the latest that is happening in the world of payroll and take a look at some of the emerging trends:

Increased preference for cloud technology

The global cloud-based payroll software market is expected to grow over $13.3 million by 2026.

The benefits of cloud technology are not unknown. As work goes remote, cloud-based software makes it easy for HR, managers and employees to access payroll-related functions from home without the hassle of coming to the office to access on-prem solutions. 

Moreover, ensuring a water-tight security system for on-prem solutions is an expensive affair. Whereas, the cloud-based payroll systems already come with layers of security to prevent data leakage of one of the most critical functions of a business. 

Use of artificial intelligence

When you think AI, do you think robots like Sonny? While Artificial Intelligence has us thinking robots will replace humans in every walk of life, it will be a long time if that even happens. Today what AI does in payroll software is simplify the complex process and automate a lot of tasks that saves both time and costs for payroll managers. 

For example, calculating error-free payroll based on different salary structures, generating payslips, gathering inputs from all departments etc. are some of the tasks that can be done swiftly using AI. Not to mention, the tax calculations and the payouts to external agencies also becomes much easier to calculate, thus saving additional expenses of penalties. 

Integration of HR technology

As innovation in HR Tech progresses by leaps and bounds, it has become more affordable and useful than ever before. Integrating your HR technology with the payroll system has made it easier to gather inputs seamless and process payroll within a day. The ROI is also now higher compared to previous generations of HR Tech.

Integrating will also help you track time and attendance better, gather data from travel and expenses module, process off-cycle payroll, track vacation time and other leaves, and much more. In fact, before buying your payroll software, ensure it has certain must-have features.

Moreover, having all the data in a central location will also help generate quick reports and offer actionable insights so you can design your strategy better.

Rise of the gig economy

If anything, the pandemic has led to an emergence of the gig workers. Hiring and training full-time employees have also become more expensive for organisations, especially in the time of crisis like we are currently facing. Thus, managing the contractual workforce's payroll will assume tremendous importance.

The payroll system must be equipped to handle the rising number of gig workforce while also blending it well with the full-time employees. 

Improved Data security

In recent years, new laws require payroll software to be GDPR (General Data Protection Regulation) compliant. This essentially means that any sensitive data will be automatically protected by the highest cybersecurity standards and applied to all geographies.

While choosing your payroll software, ensure that it is GDPR compliant so that your data is protected by processes like dual authentication to access highly sensitive data like employees wages, addresses, account numbers etc. 

Introduction of pay transparency

While this trend may take some time to catch up in India, it is slowly becoming popular among the western countries. Where organisations are making wage and salary data of employees more accessible to people. Right from the lowest ranks to the most senior executives. This means that people will be able to see how much people get paid and why they get paid that way.

For this to work, businesses would have to explain how they devise their pay structures, how they decide on bonuses and hikes etc. This transparency will eventually translate into equal pay and unbiased treatment towards everybody. Employees will know that their hard work will directly correlate to the raise they receive, eliminating any bad blood.

Inclusion of financial wellness

Just as businesses have started to focus on physical and mental wellness for their employees, especially post COVID, they are starting to realise that financial wellness is also an important aspect that lends to overall employee well being. 

Not surprisingly, higher employee engagament leads to higher productivity. The current crisis has also driven people to become a lot more anxious about their finances and having professional help to manage their finances would go a long way in alleviating their stress levels, hence helping them become more productive.

Organisations have started to include financial wellness in their packages which may include financial counselling, how to plan for retirement, different types of tax saving schemes available etc. 

In Conclusion

The payroll landscape is changing as advances in HR technology gain strides. But, is your organisation ready to keep up with the payroll trends? 

Companies like Bamboo HR, Cake HR, Darwinbox offer advanced payroll software that is GDPR compliant and simplify payroll processing to a great extent. By automating input gathering, providing powerful security systems and clear reporting styles, these HR Tech have definitely removed the pain from payroll.