By Stephanie Coward, MD of HCM at IRIS Software Group

In a hyper-connected world, everything is communicating. More data, more devices, more interaction; with integrated platforms joining the dots and streamlining the sharing of information between people and devices.

Improved accuracy and efficiency, real-time pay and increased employee satisfaction is where payroll fits into the context of tomorrow’s hyper-connectivity.

It also addresses two of the biggest challenges payroll departments face: inflexible systems and lack of insight into employee data. So, what does the future of payroll look like in a hyper-connected world?

The next step in the payroll evolution

Businesses have faced a relentless stream of HCM challenges over the past couple of years. The pandemic, The Great Resignation and now the cost-of-living crisis have all contributed to many businesses rethinking internal processes, including payroll management.

Job relief schemes and new legislation (often applied with very short notice), remote working and changing employee expectations put payroll management under significant pressure to streamline processes and be far more agile in their approach. Alongside this we have seen a shift in technology the Global Payroll Complexity Index report found that cloud-based payroll platforms accounted for 61% of payroll solutions. So, what does all this mean for payroll professionals? Here are four key areas we can expect to evolve as we look ahead at payroll.

1. The new payroll manager

Despite the industry facing fast digital transformation, this does not spell the end of the payroll manager. The role of the payroll manager is going to evolve from data management to one of more strategic importance, as software continues to be integrated into everyday work life.

Automation will reduce the time and resources spent on static and manual processes, enabling payroll professionals to focus on adding value, taking advantage of emerging trends such as open banking, and initiatives improve employee satisfaction which can positively impact the whole business.

1. The possibilities of smart payroll

Traditionally, departments have operated in silos, often with the risk of work being repeated. Integration with other departments, such as HR or finance, will allow for improved business performance and enable better decision making with deeper insight and predictive analytics, shifting payroll from back-office and operational to strategic.

But smart payroll doesn’t stop there; it can also redefine capabilities and provide tangible financial benefits. By improving the accuracy and efficiency of payroll, where non-compliance is just not an option, teams will be able to focus on areas that need critical thinking.

1. Think real-time pay

With rising costs showing no sign of slowing down, financial security is understandably forefront of conversations across businesses. Our own research found that one in ten retail and hospitality workers are concerned their salary won’t appear in their account on payday.

Improving the efficiency of cashflow has always been a key challenge SMEs face. Google recently reported that searches for “payday loan” in the UK are the highest since late 2020. Changing the pay frequency from the standard once-a-month structure to real-time pay can improve the cashflow within a business. With real-time, businesses can send and receive funds instantly, offering a far more accurate visibility of cashflow.

The desire for real-time or on-demand pay is growing, too. Employees want their hard-earned money as soon as they can. Waiting three business days for money to arrive isn’t realistic anymore, especially with the cost-of-living crisis more prevalent than ever before. On-demand pay is one of many ways to improve the wellbeing of employees as it allows them to take control over their finances which in turn reduces the likelihood of falling into debt.

Earlier this year, we partnered with leading FinTech Revlout to give employees access to their salaries when they want and need. Businesses can also complete payroll at the push of a button, freeing up admin staff to focus on more value-adding activities that can support business growth.

1. Payroll outsourcing

Increasingly, companies are outsourcing some or all their payroll operations. Recent research reveals that 61% of businesses have outsourced some or all their payroll operations.

There are numerous benefits to doing this. Outsourcing payroll may help employers save both time and money. Not having to spend long hours on administrative work affords employers the ability to focus on business growth initiatives, and improved accuracy can prevent costly penalties. In addition, full-service payroll providers that offer flexible pay options and self-service apps can help improve employee satisfaction. In the current economic climate, this can help a business remain competitive, so it’s likely we will continue to see the rate of payroll outsourcing adoption continue to increase in the future.

Endless possibilities

As payroll continues to evolve in a hyper-connected world, it is increasingly impacting every aspect of business, presenting payroll professionals with an opportunity for business growth. But to do this well, companies must be prepared to facilitate agile one-touch processes and embrace technology, not fear it.