How Data Will Help Add the Payroll Function to the Businesses
by Rinie Abraham | 4 min read
The future of payroll – where the industry trends are leading to – is single touch processing. By harnessing machine learning and artificial intelligence, the businesses will be able to integrate and streamline all the systems which generate payroll information. This would help in gathering a broad swathe of data.
Thereafter, digital payroll systems can perform all the relevant calculations, creating all the required reports, initiating payments, and managing exceptions. As a result, the role of people will change. With the machines doing the problem solving and heavy lifting, payroll executives will only be required to review the work – which can then be validated with a single touch. Moreover, having all the data will help in improving broader decision-making and adding value to the businesses. Or we can say, that is the ideal scenario at least.
However, in the era of profound digital transformation, payroll has been traditionally behind the curve. So, what’s the hold up – and what would be the rewards once the barriers are removed? The reasons underlying the delay are numerous, but primarily, the failure of the payroll system to join the digital transformation initiatives has been the main issue. In most cases, the payroll either nests within finance or HR, however, in either instance, such discrete functions view themselves as having crucial missions on which to focus. Moreover, it is one of those areas where the organizations pay very little attention until the moment something goes wrong.
Run payroll system excellently and no one notices. And, that is a blow to the workforce loyalty and morale – government regulators and union officials get rile, and the company’s performance and reputation suffer. Consequently, payroll is a process where the managers perceive little reward even for taking moderate risks.
However, it is becoming increasingly clear that the advantages of transforming payroll system through the technology are significant – something that many businesses have already come to terms with. Simply put, the time for payroll systems to embrace the digital transformation has come. However, some technological hurdles prevail.
The days of manual, antiquated and FTE-intensive payroll are numbered. The developers have been working tirelessly to create technologies and tools that can disrupt the market. Though external providers are stepping in and creating platforms that can modernize large parts of payroll execution, the need of the hour is expanded geographic capability. It becomes even more pronounced while confronting the challenges being presented by the new ways of working.
Though accelerated by the pandemic, hybrid work model and ‘work from anywhere’ models are here to stay. This implies businesses will have less opportunity of placing large employee groups into geographic blocks for identical payroll treatment.
Next, consider the ever-changing, ever-widening basket of varied technical requirements for which payroll processing must maintain compliance. The rules and regulations – by the federal and union governments or provincial/state or local authorities - are varied, complex and ever-changing - all of which play a crucial and active role in this era of change. Therefore, payroll needs are ever-expanding.
However, traditional offerings in the payroll space are not taking a global approach, nor are they proficient at unique circumstances in the rapidly evolving payroll context. Instead, the majority of providers are adding functionality beyond the needs of payroll. And, such engines become impractical for widespread roll out – and this especially becomes a huge inhibitor for the companies whose operations are geographically dispersed, too varied and replete with many employees in unique payroll circumstances.
For such companies, it is getting difficult if not impossible, to find a payroll system or solution which can handle their entire footprint. And, to address such shortcomings, the payroll services providers need to limit their focus on broadly expansive systems and increase the same on fundamental payroll activities. Ramco’s complete Global Digital Payroll System helps you manage your payroll system efficiently, irrespective of how widely your employees are spread, their local rules and regulations and other factors. It is a one-stop solution available on cloud, on Premises and as Managed Services. Additionally, you’ll be able to collaborate and connect with third party systems via robust Ramco APIs.
Digital Payroll System - The Benefits of Automation
Not all the steps will be straightforward and easy. If payroll itself has been a little slow to automate, the same is true for a majority of downstream sources of the information. Links to time & attendance, operating systems and benefits charges or sales and commission programs – all of which have a major impact on gross to net payroll are all often antiquated.
However, leaders are taking the steps to move the source to gross and then to net, from error prone and labour intensive to fully automated. Immediately, such organizations are experiencing a major reduction in costs. Moreover, a slew of the intangible benefits may prove more valuable.
For the beginners, machine-enabled digital payroll systems or processes are proactively responsive and introspective by their nature. In the near future, AI will become more capable than the humans in terms of highlighting trouble patterns such as frauds, or otherwise noting when something is amiss.
Additionally, completely digitized, or digital payroll systems will help the businesses towards achieving one data model’s highly prized objectives. That is, the information is collected at the source only once. The data points – information – is clearly defined and the provenance is certified. Now, the data can be confidently and easily shared for any type of analysis the company desires to perform. So, simplify and streamline your payroll system with the best-in-class digital payroll system.