Top 4 payroll concerns revealed

HR leaders should be wary of the challenges affecting payroll staff both now and in the future.

Automatic Data Processing (ADP)’s The Potential of Payroll report surveyed over 1,463 business leaders responsible for payroll to identify the factors that will drive global payroll in the next two to three years.

According to the report, there are four key trends concerning leaders.

1. Data security

Forty-four per cent of respondents said they plan to improve data security.

“Following high-profile data breaches by global companies such as Twitter and Uber, as well as Australian organisations Medibank and Optus, it’s not surprising that data security topped the list of planned payroll improvements in the next two to three years at 44 per cent,” said Kylie Baullo, managing director ANZ at ADP.

Sixty-one per cent of respondents said their payroll operation had been impacted by a cyber security breach at least once in the last 24 months. Despite this, less than half said that they have a full contingency plan in place across their business locations.

“Recent high-profile data breaches have demonstrated how sophisticated these breaches are becoming,” Ms Baullo said.

“That’s why it’s becoming ever-more important to consult experts that specialise in keeping payroll and HR data safe.”

2. Future-proofing payroll

Increasing the accuracy of employee pay reporting was touted as a key concern, with 56 per cent of respondents saying they currently don’t have full visibility of payroll performance, accuracy and other data across their international locations.

“Despite global skills shortages, a looming recession and other challenges, many businesses are looking to scale up their operations. For most organisations, that means more people, which is why 36 per cent of businesses are planning to increase the accuracy of employee pay reporting. Additionally, 31 per cent plan to increase the timeliness of employee pay,” Ms Baullo said.

“More complex and variable working patterns and schedules have meant that almost half (45 per cent) of respondents experienced an increase in payroll queries from employers. Outsourcing of payroll can increase the accuracy of this data and, in turn, increase employees’ workplace satisfaction.

“Working with payroll experts will also help businesses address the current skills shortage, with 48 per cent saying they have difficulty finding payroll skills from outside the business. Additionally, 64 per cent have resorted to training non-payroll staff to fill this need.”

3. Scalable payroll

Nearly a third (30 per cent) of finance and HR leaders reported that they are not confident that their payroll systems could support their plans for growth, or geographic expansion.

Forty per cent of payroll leaders reported that each country has different methods of tracking compliance performance, which has led to a focus on planned regulatory compliance (22 per cent) in Australia.

Twenty-three per cent of respondents would like to transform their operations to deliver standardised multi-country payroll processes.

“While it can be tempting to look for the quickest solution when it comes to setting up payroll in new business areas and markets, this can be a false economy,” Ms Baullo said.

“Outsourcing to payroll experts who offer consistent and integrated systems, while also factoring in regional differences, provides businesses with a universal perspective of their payroll.”

4. Lack of tools and big data

The report found less than half (40 per cent) of organisations are implementing global dashboards, and just 29 per cent are using real-time analytics. This has contributed to 32 per cent of payroll leaders’ desire to improve reporting capabilities, the report flagged,

“Payroll is influencing strategy at the top level, with nearly half (45 per cent) of respondents reporting an increase for relevant data from senior management. These metrics are being used to inform cost management, growth, and diversity, equity and inclusion (DEI) strategies,” Ms Baullo said.

“Additionally, the opportunity to drive efficiencies and other opportunities across business units is a focus for 25 per cent of respondents, who are looking to increase integration with payroll and other business critical systems.

“Payroll leaders are becoming increasingly integral to not just their roles, but business performance. As a plethora of opportunities and issues present themselves, those that find the tools and expertise to support them will keep pace and exceed their peers,” Ms Baullo concluded.