The pandemic has put unprecedented pressure on businesses across all sectors. In the past 18 months they’ve had to contend with stay at home orders, furlough and not being able to trade.
These realities have forced companies to fundamentally change the way they operate. Lots of payroll companies adapted quickly to the new normal (I bet we’re all tired of that phrase by now) and changed their operations to accommodate the new ways businesses needed to use their services.
Some of these changes will be left on the scrap heap when the pandemic is over. Others however are likely here to stay. Covid-19 forced a lot of companies and software providers to look internally at their own processes and many found that there were better ways of doing things. This is true too for payroll management.
As we leave the pandemic behind us, these positive changes are probably going to stay. The new world of work we find ourselves in will be very different from the one we waved goodbye to in 2019.
In this article we’ve listed the top 10 trends brought about by the pandemic that’ll truly revolutionise payroll management. The list covers everything from the continued attitude to flexible workforces to more focus on digitisation.
If you’re a HR leader and you want to stay ahead of the curve in your industry check this list out and get an understanding of the direction HR will be heading in the next couple of years.
Let’s take a look!
1. Agile payroll processing
In the last year and a half there has been an increased focus on making payroll processing more agile. Through the utilisation of faster payments and automation, more payroll companies will have the ability to speed up their processes.
Payroll errors can also be reduced by adopting more agile ways of processing payroll, making it more cost-efficient and convenient for both companies and their employees.
2. Flexible working
Flexible working has become the norm for many employees as they have had to work from home in response to the COVID-19 pandemic. However, this trend is expected to continue with many payroll management companies choosing to give their employees the option to work flexibly. Evidence shows flexibility at work leads to better employee retention and greater productivity.
Allowing staff members to choose their own working patterns empowers them to deliver their best work. Whilst flexible working isn’t for every business it’s safe to say it is here to stay. Being an early adopter of flexible working could give your business a competitive edge against your competition.
3. Increased globalisation
Following on from the flexible working trend, there is no doubt that companies will reassess where they set up roles for their companies. This will open up a wealth of opportunities for companies that will take advantage of employing teams around the globe.
This will give those residing in non-western countries the opportunity to enter skilled roles without the location barrier in place. From a payroll and HR perspective this has multiple advantages and drawbacks.
When you can find a candidate for a role from anywhere in the world you’re no longer limited by location when screening candidates. Essentially the very best the world has to offer is at your fingertips, all you need to do is find them.
On the other hand, having distributed teams across the globe can become a headache for the payroll department. Transferring money across borders is a pain and if your staff aren’t freelancers you’ll need to be an expert in the tax legislation of several countries. All these jobs fall squarely in the lap of the HR and payroll teams so make sure you’re skilled in managing teams across time zones.
4. More investment in technology
The pandemic has pushed technology averse companies towards new digital tools. Business owners, who prior to Covid-19 were still championing in-person meetings, have had to adapt to a world of Zoom meetings and Google Docs.
This isn’t really a bad thing. As more companies get used to these tools they’ll realise that technology isn’t just for the IT department. It’s something designed to make everyone’s lives easier and that includes the payroll team.
As more companies look to increase their efficiency with software, HR and payroll teams will need to adjust their processes and practices to make way for new software. Software that’ll help them automate their everyday tasks and give them more freedom to work on value-add projects that’ll have a real impact on their business.
If you’re looking for a new HR software product to increase productivity in your department check out our HR systems selection tool. Fill in a few details and find the perfect software for your business.
5. Continued regulatory changes
As the world’s economies stutter back to life at the end of the pandemic many government relief programs aimed at helping struggling businesses will begin to wind down. This isn’t going to be a rapid process. Rather it’ll be a slow burn as things start returning to normal.
Schemes such as furlough will come to an end and with it a whole host of employee tax issues and other payroll related headaches. On top of that government subsidies for businesses will need to be managed too.
All this combines together to create a new task to add to a payroll manager’s list of things to do and will be one that isn’t going to go away anytime soon.
6. On-demand payments
People want to be paid and paid on time. The pandemic has seen an increase in technology adoption across industries and individuals homes. This has created a tech-savvy society who will no longer stand for sloppy or late payment from their employers.
Late payments damage the morale of a business and with things opening back up, economics growing and many jobs markets booming again it’s essential HR and payroll teams pay staff on time to avoid dissatisfaction and churn.
There are multiple tools on the market that can help payroll teams pay their staff on time. Check out our HR system selection tool if you’d like to see what’s available to you.
7. New legislation
Various legislative updates that HMRC had in the pipeline for 2020 had to be postponed as a result of the pandemic outbreak. Therefore, a lot of new legislation is beginning to be introduced due to the delays.
This includes the IR35, the coronavirus job retention scheme, a national living wage, and redundancy protection to name just a few. Such legislation will undoubtedly affect payroll processing procedures too.
8. HMRC changes
Many non-legislative changes will likely be made too as 2021 continues. This includes scrapping paper P45 and P60 documents with more focus on the digitisation of documents. The likeness is that digitisation will increase and lead to more technology-focused HR teams.
9. Stronger HR analytics
Data and analytics are the future of business. They allow you to spot trends within your organisation and provide you with actionable insights on how you can improve employee satisfaction, reduce churn and ultimately make your business more money.
Prior to the pandemic data and business intelligence were mainly used by financial institutions and large marketing agencies. But over the past few years everywhere from Healthcare to manufacturing and hospitality to human resources are understanding the value of accurate, actionable data insights.
This explosion of data-driven approaches to business has seen the market for HR technology explode. This trend shows no sign of slowing down and HR professionals post-pandemic will need to get comfortable using a number of HR software and data platforms.
10. More Cloud software
According to this year’s Future Of Payroll Report by the Chartered Institute of Payroll Professionals, 38% of organisations have been utilising Cloud software as a means of processing their payroll.
Can Phase 3 help you adapt to these trends?
Phase 3 is a HR technology consultancy that helps businesses improve their HR process, onboard new technologies and manage their payrolls better.
As a consultancy we take a solution first approach to our clients. We integrate into a business, identify the payroll team’s issues and recommend a solution based on that investigation. We’ll never recommend a solution to you before understanding your problems and we won’t try and force a payroll software tool into your business if it doesn’t fit. We even offer outsourced payroll services if you’d prefer to hand things over to an external specialist.
We are a true partner for your business and will work with you to create lasting meaningful change within your payroll and HR team and organisation generally. If you’d like to find out how you can partner with us you can find out here.