Outsourcing Payroll Trends

7 Payroll outsourcing trends to look out for

Payroll outsourcing is finally becoming part of strategic conversations, and a well-planned holistic approach can transform your business. Let’s take a look at seven key trends to watch out for.

1. Payroll becomes part of the big conversation

Payroll is no longer the poor relation when it comes to important conversations at board level. Traditionally, big discussions tend to center around how to attract and retain talent, automation, analytics, etc.

Now we are seeing the leaders of the pack bringing payroll to the table as an important topic. Whereas before many organisations were scared to ‘touch’ payroll, the early adopters are now recognizing it’s an area with untapped potential.

2. A more holistic approach to the benefits of payroll outsourcing

Forward-thinking companies are considering the longer-term benefits of outsourcing payroll, rather than focusing on the pure business case. No longer are businesses starting their payroll outsourcing journey by looking for a 2%, 5% or 10% cost reduction.

They realize that’s not the right approach. Outsourcing to a service provider can be costly, so a more holistic approach to the benefits is advisable. A good partner will help you set out a clear road map, including realistic expectations and timescales. When it comes to sectors leading the way, we’re seeing a number of pharmaceutical companies embrace this new approach.

3. The skeletons in the cupboard are being evicted

Many big companies have spent decades building very complex HR software they simply can’t manage anymore. Employees who know and understand the software are starting to retire. Therefore it no longer makes sense to keep investing in the old world.

Companies want to become more agile and move away from cumbersome, outdated processes – many are even committing to redesigning whole teams and structures where necessary.

4. More thorough planning before integration

Businesses are learning from the missteps of others, with many planning carefully before embarking on integration and relocation to the Cloud.

They saw their peers moving to the Cloud and losing their payroll integration. Because local data was lost, payroll processes often broke and companies didn’t realize until they were in the middle of roll out.

Recently, we have seen companies planning their integration more carefully to avoid last-minute payroll challenges by, for example, combining the replacement of the HR system with implementation of the payroll.

5. A huge focus around AI and machine learning

Companies are starting to put AI strategies in place for their HR and Payroll teams. The leaders of the pack are looking for more from their tech than just a nice chatbot at point of entry.

That may be fine for the consumer market, but our clients want their Al to be end-to-end. They are looking for partners who can offer more robust global solutions, and really put AI in at the core.

At NGA HR we’re investing heavily in AI and machine learning and are well-positioned to support and guide in this area. We can also help you make the business case for HR and Payroll having a share of the overall company AI budget.

6. Partners who can help with GDPR challenges are highly sought after

Increasingly, organisations are looking for providers who can help them navigate financial and legal challenges such as GDPR and international data requirements.

Partners with demonstrative experience with compliance matters, such as NGA HR, are highly sought after as we can help companies manage legal and financial risk.

In fact, we would say moving to a centralized payroll environment gives you greater insight into where your data is and how it’s flowing, which is a good thing.

7. HR leaders sharing best practice

Another exciting new trend is HR leaders becoming more comfortable sharing best practice with peers. This is notable in a sector which has traditionally been very consultant-heavy.

When we meet a new client they have usually already chatted about us with their peers and even competitors. Yes, case studies are still important. But increasingly businesses are seeking out this information themselves.

Generally, when thinking about outsourcing your payroll it’s a good idea to use a combination of expert advice and peer experience.

We look forward to chatting with you at the Shared Services and Outsourcing Week in Berlin

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