What challenges payroll departments the most?

by Mike Eralie, COO, NGA Human Resources

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

Added to this, the introduction of the GDPR in EU countries has impacted not only Europe, but countries across the globe. Payroll professionals work hard to ensure their processes are compliant and they protect personal identifiable information (PII).

The way we want to be paid has changed

What’s less known, is the impact the way people work in larger businesses. Especially, in the structure of these organizations, as this impacts 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. Consequently, the need for unique payroll calculations has never been greater.

The report, produced in association with the APA, CIPP, CPA and the GPMI shows 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 on payroll

Organizations must attract new skills. New talent, often asks for a salary package combining cash with a range of benefits, reward programs and bonuses. These employees are also less loyal to their employer, moving to a competitor for sometimes a few more dollars.

Millennials and new recruits from Generation Z are making up a larger proportion of the workforce. With this trend, the secrecy surrounding salaries seems to be disappearing, as people are more open to compare salaries.

This means employees must have be able to view their ‘total reward’ package. This content needs to be included in payslips. Adding to the complexity is the frequency of salary reviews and adjustments where sometimes off-cycle and retroactive payments also have to be made.

Talent flight and compliance risk

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

The 2019 survey highlights the shift from rising complexity not at just the country level, but at the city level too i.e. increased local legislation affecting payroll. This ‘micro legislation’ is becoming more typical across Europe and the United States. It can create major headaches for payroll teams.

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

This is not a time for payroll teams to sit back

To prepare for the future you must understand the challenges you face. Our report draws on the research we started in 2014.

It offers insights into how the payroll process has evolved over the past five years. 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. This report uses past experience, the realities of today and a glance into the future to give you the information you need to audit the processes you currently have. It also considers potential scenarios for change and how to best prepare for the future.

Download information you need to manage local and global payroll.