What challenges payroll departments the most?

Regulatory complexity, the changing expectations of employees, and the overall business need for real-time data insights are the main topics in the 2019 Global Payroll Complexity Index.

Added to this, the introduction of the GDPR in EU countries has not only been felt in Europe, but across the globe. Payroll professionals are all working hard to ensure their processes are compliant and personal identifiable information (PII) is well protected.

The way we want to be paid has changed

What’s less known, and has been highlighted by many respondents to the 2019 Global Payroll Complexity Index survey, is the impact the way we now work in larger businesses, and the way these organizations are now structured, is having on how people want to be paid.

The knock-on effect of this rise in rewards and benefits to the payroll processes is not insignificant. The time and compliance burden is great. The need for unique payroll calculations has never been greater.

The report, which was produced in association with the APA, CIPP, CPA and the GPMI, shows that traditional salaried and shift jobs are being automated faster than ever. At the same time, the demand for the types of products and services provided is declining.

The cost of loyalty

As a result, organizations must now attract new skills, and this new, often younger talent, is asking for a salary package that combines cash with a range of benefits, reward programs and bonuses. These employees are also less loyal to their employer, moving to a competitor for literally dollars.

Equally, as the workforce is naturally populated by more millennials, and new recruits from Generation Y, the unwritten anonymity that once surrounded salaries is gone. People now openly compare salaries. This means there must be absolute visibility to each employee’s ‘total reward.’  This has added to content to be included in pay slips and in the frequency of salary reviews and adjustments, often with off-cycle and retroactive payments to be made.

Talent flight and compliance risk

This is new to manage for many businesses – talent flight and legislative compliance adds risk and cost – at a time already fraught with the changes needed to remain competitive in the fast-moving digital world of commerce.

What has been interesting in the 2019 survey is the shift from it being the number of countries that raises complexity to the number of cities. This ‘micro legislation’ is becoming typical across Europe and the United States and is creating major headaches for payroll teams.

In addition, GDPR is also going global. Its influence is making governments around the world realize that they have an obligation to protect the digital identities and rights of their citizens.

This is not a time to sit back

To be prepared for the future you must understand the challenges you face. Our report draws on the research we started in 2014. This gives us good insights into how the payroll process has evolved over the past five years and the authority to tell you that as we move into the next decade the need for clarity, compliance and intelligence in your payroll processes has never been greater.

We would like to thank all those who kindly shared their perspectives. While no study can be fully conclusive, this report uses learning from the past, the actualities of today and foresight into the future to give you the information you need to audit the processes you currently have, consider potential scenarios for change and how to best prepare for the future.