The Future of Payroll and the Top Trends You Need to Look Out For
Updated: Nov 29
In just 10 years the landscape of payroll and HR has been revolutionised in large part thanks to tech; and it continues to evolve and adapt to the needs of employers and employees alike. We’ve covered payroll possibilities in a lot of detail here at Invatechs, with our previous blog-posts on recurring payroll mistakes and the top features every payroll software should have. It’s clear that payroll technology has the ability to save you time, money and resources and streamline all of your operations into effective cloud-based portals. But where does payroll software go from here? What does the future hold for payroll technology, what impact will it have and what do you need to look out for? How can you use payroll more effectively and strategically? In this article we’re going to look at the upcoming trends you’ll want to be aware of when it comes to payroll; from tech to HR. We’ll also introduce you to Invatechs’ own payroll services and what they can do for you; we’re ready to embrace the innovations the future holds.
THE TOP TRENDS TO LOOK OUT FOR
More businesses and companies are dedicated to releasing information on pay inequalities that exist in their operations and industry. The American Community Survey reported in 2018 that year-round, full-time working women earned $42,238 on a median level, compared to the $52,004 salary of men in full-time annual work. The pay gap between white British workers and ethnic minority workers in the UK also remains wide and unequal, with particular disparities in earnings for Bangladeshi, Pakistani and UK-born black African employees. This data is becoming more and more important to businesses and HR departments, as they commit to closing these pay gaps and finding solutions to disparities amongst employees.
Pay transparency is a tool you have to share information about salaries with your team. It’ll allow you the opportunity to explain and share how you devise your pay structures and gain feedback from employees to address potential pay inequality. This will be particularly useful if you run a tight-knit, small or medium business. Another option for pay transparency isn’t to share specific salaries for specific employees, but the formulas for how pay is generated for certain positions. Of course, this is a new and slightly controversial idea, that comes with its pros and cons. If you’re committed to addressing any inequities in your business and you want your team involved in the process, employee performance evaluation software is a great option. Pay transparency is relatively new, and we’re not sure what role it will pay in the future, but it’s certainly a trend to look out for.
Gig Workers, Outsourcing and Your Payroll
The gig economy has grown exponentially in the last ten years, as more businesses employ people on short-term and freelance based contracts. If you’re considering or are using gig workers in your employee roster, you need to make sure you have payroll software that can correctly calculate their salaries and distinguish them from the rest of your team. If you read our last Invatechs’ blog post, you’ll know there are plenty of features built into current payroll technology that can monitor gig-workers’ salaries, including distribution options, clocking in-and-out systems and mobile apps. Gig-workers are here to stay, and so are outsourcing options, so make sure your payroll system is ready to accommodate influxes of external workers.
Cloud-based systems give you the ability, efficiency and flexibility to view and enter payroll from anywhere. Manual payroll systems are becoming a thing of the past, as employees won’t have to meet with managers in offices to double-check their pay, but can instead view all of their information from a mobile or the web.
Cloud-based payroll software is becoming increasingly important, because of its ability to scale to your company’s operations. All of your employees will be able to access their information from a portal with the ability to check their hours, holiday, pay and benefits. More than that, as more information is aggregated onto cloud-based systems across industries, data protection is playing more of an important role in assuring these platforms are fit for purpose. If you’re not using a cloud-based system, now is certainly the time to invest in one; it can save you time and money in the long-run and provide fluent communication and information between you and your employees.
Data Protection and the GDPR
In today’s business and employment climate, remote workers are able to connect with and be employed by companies around the world; geographic constraints (excluding time-zone differences) don’t have to pose a problem for finding a great team. However, if you’re hiring remote workers from European Union countries, you’ll need to be aware of the GDPR - or General Data Protection Regulation. The GDPR was implemented in 2018, and addresses the transfer of personal data from outside of the EU and EEA areas and regulates data protection and privacy as part of EU law; it ensures all information that is collected from businesses is protected. You’ll need to be well aware of its rules, regulations and how to adhere to it to avoid any large fines. Whilst more automated payroll systems are designed to be GDPR-compliant, it’s worth making sure your data is still encrypted, you’re only storing data that is necessary for your business, and your HR team are equipped and prepared with all the relevant GDRP knowledge.
Financial Wellness Programs and Payslip Literacy
You might be asking yourself, what is a financial wellness program? Well, they’re pretty new. Financial wellness is all about a person’s financial health, that means they don’t have money-related stress weighing on their mind and they’re able to keep on top of their finances. It’s clear from the research that financial stress can affect a worker’s performance. As management, you might question why it’s your responsibility to look after your employees’ financial health, but when you consider $500 billion is lost in the US annually due to financial stress, you can see the benefits of implementing a safety net.
A financial wellness program is aimed at educating employees, by offering things such as financial counselling and coaching, workshops on budget planning and debt reduction, e-learning and more. You’ll be able to find lots of vendors that can offer you these programs. One of the first steps you can take to empowering your employees’ financial wellness and literacy is ensuring they know and understand their payslip. A payslip lets an employee know about pension contributions that are made and deductions that are invested elsewhere - such as in health insurance or childcare. Lots of payroll software make use of customisable features that allow you to make comments on the slip, and cloud-based apps, emails and public messaging boards can send alerts to let employees know about any budgeting tools, debt management or public resources available to them. It’s well worth investing in a financial wellness program or ensuring your workforce knows all about their payslip; it can boost productivity, invests in your team and keeps everybody financially healthy.
Accuracy, time-efficiency, consistency, tax calculations, legal compliance and minimised errors are all possible with automated payroll software. It’s clear that manual payroll is dwindling, in some ways the future is already here. What’s important to bear in mind is finding an automated payroll system that’s right for your business. If you’re a small business, you’ll want a cost-effective, easy and straightforward system with accessible management tools. If you oversee a larger business (particularly one with international workers and/or gig workers) you’ll need to make sure it can distribute pay to different branches, divisions and on an international level. The market for payroll vendors is wide, and automated capabilities are developing every year. That’s why it’s important you find a vendor that’s responsive to the needs of you and your business.
It might look from the outset that automation will entirely take over HR’s responsibility for payroll in the future, but you can’t afford to become complacent. After all, someone needs to look over all of the payroll systems and operations in case anything goes wrong. That’s why it’s important your accountancy team are educated and knowledgable of your software, and you’re getting ready for the future now! Payroll, after all, is strategically important, and payroll tools are an important investment for your future. For example, unified data management is a great way to aggregate workforce data into one or two systems and make projections for labour-power; whether that’s for upcoming projects or fluctuating salaries. It’s important your accountancy and HR team are adapting to the demands of payroll technology now before they fall behind on the trends and regulations.
HOW TO GET READY FOR THE FUTURE
There’s a lot to learn about payroll and its future. From new technologies and software to data compliance, programs, regulations and just how all of that can fit into your business model. Thankfully, at Invatechs we provide our own cloud-based payroll solutions that can get you ready for the future. Our automated payroll solutions deliver scalable and efficient results that meet the legal compliance of your area and GDPR. We’re committed to creating a suite that works for you, either building it from scratch or integrating with a third-party. We work with you throughout the process to make sure our results are targeted and specific to your needs. You can read all about our ambitious case-study, where we created the payroll software suite for NHS GP Practice Managers and the impact it had. We’re dedicated to staying on-trend at Invatechs and finding tech solutions for our clients. If you want to find out more about our payroll solutions and how we can get you ready for whatever the future holds, don’t hesitate to reach out and contact us today.