The Future of Payroll5 Trends to Watch
Technology is disrupting industries around the world. Human resources (HR) may be a bit late to the party but that’s changing quickly. Investment in HR technology is growing at a record pace and is expected to reach $5 Billion this year. One area that technology is helping improve and change things is with business payroll. It’s expected that the cloud-based payroll software market alone will balloon to over $13.3 Billion by 2026. Your business just can’t continue without payroll digitization.
If you are ready to learn more about the changes coming to how payroll is handled, keep reading. Here you can learn what to expect in the coming months.
1. Improved Data Security
Keeping employee information safe is a great responsibility. Payroll departments hold a large amount of sensitive data, including account numbers, wages, addresses, Social Security numbers and more. It is no secret that on-premise solutions are prone to data loss and this is an area where cloud-based tools excel. Technology introduces dual authentication to access sensitive information, in addition to security questions. These safeguards are being adopted across the industry to minimize data theft and breaches.
2. Increased Cloud Use
Security, accessibility and transparency make a strong case for cloud-based payroll systems. Manual and on-premise payroll systems often limit information access to HR and puts it out of reach to managers and employees. With cloud-based software, companies can provide employees with their payroll info in real time, as well as access to info about vacation time, PTO requests, and open enrollment. This isn’t only good for administrative efficiency but it reportedly improves employee satisfaction as well. Improved data protection is another benefit. Protecting on-premise payroll software from computer hacks and cybercrime is becoming a nightmare. Many organizations just don’t have the financial or technical resources to keep up. Cloud services handle all the cybersecurity, backups, software updates, and demand for storage space. With payroll accounting software in the cloud, you simplify record-keeping, reduce time-intensive administrative tasks, minimize mistakes, and improve data protection.
3. The Integration of Artificial Intelligence
Artificial intelligence (AI) is set to disrupt payroll. Up until recently, payroll has been largely a transactional function. Employees worked, they got paid, and reports were processed. The future of work demands much more. AI will revolutionize work, jobs, and the way people get paid. With payroll making up more than 60 percent of total business costs, analyzing the massive amount of payroll data collected is not crucial to the success and growth of any organization. AI will help shape more accurate budgets, identify unnecessary or low ROI expenses, and even suggest potential consequences for different options.
4. Managing the Gig Economy
Our economy is experiencing a massive shift from traditional and full-time employment to a blend of work classifications that legacy payroll systems aren’t equipped to handle. This proliferation of freelancers and gig workers is creating a nightmare for payroll administration. Managing such a diverse and dynamic workforce is much more complex than just managing compensation. Spreadsheets and manual entry are longer dependable, accurate, or secure. Technology will transform how organizations do business and consequently will have a significant impact on the way employees are compensated.
5. Blockchain Adoption and Use
If you manage payroll or get paid for your work, they you’ll need to learn about blockchain. It may not affect your work today…but it will soon. HR Payroll Systems services and other providers may soon be using blockchain technology to validate employment contracts, verifying identities, and paying workers. Blockchain shows great promise too in solving problems associated with the other trends I mentioned earlier such as offering more secure data encryption and paying and managing gig workers. In any highly regulated industry like payroll, blockchain technology offers solutions for moving money faster, lowering costs, creating more transparency, and better security.
Adopting Technology: Is Your HR Department Ready?
These 5 trends are just the tip of the iceberg. How quickly and significantly each will impact your organization depends on your industry, location, and maybe even size. But regardless of any environmental factor, technology will undoubtedly disrupt and revolutionize payroll. Adopting new technology is often a daunting process. And with billions of dollars being invested in HR technology, selecting the right systems and the right vendors can be confusing. But the benefits, especially for a business function such as payroll can be significant. HR technology can significantly improve productivity, accuracy, and efficiency. If your company needs help with HR technology adoption, be sure to reach out to the experts to help navigate this exciting era of HR transformation.
Guest post contributed by Wendy Dessler.