The Future of Payroll Explained

Companies' processes have recently changed due to the Covid-19 effect, shifting to more efficient and seamless business solutions. Payroll management is one of the highly affected processes. 

With technological advancements in payroll systems, businesses and companies no longer have to pay penalties to tax regulators due to payroll errors and compliance issues. Additionally, they don't have to strain to manage their employees' human resource details (salaries, tax deductions, employee benefits, etc.). 

The future of payroll is even more promising due to technological advancements, and these are some of the future trends to watch. 

The Future of Payroll: 7 Payroll Trends to Watch 

1. Cloud-based payroll capabilities 

Cloud-based capabilities allow businesses to access data on any device in any location via an internet connection. They can manage payroll from anywhere with a cloud-based payroll system or software. As a result, it gives them flexibility and minimizes costs.

According to a report by the Chartered Institute of Payroll Professionals, 38% of organizations have been utilizing cloud software as a means of processing payroll. Research also showed that more than 50% of organizations moved their workload to the cloud during the pandemic. 

More importantly, a cloud-based payroll system allows businesses to manage and work with remote employees. 

2. Payroll automation 

Besides inefficiency and time consumption, manual payroll processing is a thing of the past. Business owners are now shifting to automated payroll solutions. Such systems help them easily calculate their employees' wages or salaries and tax deductions and classify employees according to tax brackets. 

Thanks to the power of artificial intelligence (AI) in enhancing payroll automation efficiency. For instance, some payroll systems use AI to update constantly changing regulations automatically and monitor and correct any violations occurring in the systems. 

3. On-demand payments 

Employees and freelancers now expect real-time compensation from employers. Additionally, demand for instant payments is increasing. Employees and suppliers are key pillars in any business, and delayed payments can easily hurt companies and leave employees unhappy. Unhappy employees are likely to be unproductive, and the company will likely face a late payroll tax penalty. 

Businesses don't have to deal with all this trouble when they can invest in payroll systems that help run the payroll on time. Click here to see an example of an easy and intelligent way to manage a company's payroll in Africa. 

4. Pay transparency 

Businesses and companies have been working towards addressing the issue of employee gender pay gaps, among other disparities. About 66% of organizations surveyed by Payscale planned to pay close attention to pay equity analysis in 2022. 

Pay transparency is a relatively new issue of interest, and business owners should not ignore it. Investing in pay transparency tools to share information about employee salaries with the team is essential. Alternatively, businesses can share with their employees the formulas for pay generation for certain positions in the company. They should then use their feedback to address potential pay inequality. 

5. All-in-one solutions 

Business owners appreciate an all-in-one solution system that helps them manage their payroll without the help of other payroll or human resource service providers. It's cost-effective and user-friendly. 

The need for a comprehensive payroll solution has led to integrating human resource (HR) technological solutions into the payroll systems. Consequently, it lets companies track their employees' work hours and dues. Additionally, such solutions allow employees to view their check stubs and change their information in a system if needed. Isn't this convenient, efficient, and user-friendly? 

6. Increased demand from the gig economy

Technology has made it possible for people to work from anywhere. According to Mastercard, global gig workers are expected to rise to about 78 million in 2023. Additionally, ADP Research noted that in 40% of organizations, one out of four workers on payroll is a gig worker. 

The gig economy requires a payroll system that blends with the gig workers and freelancers. As outlined above, organizations also need an all-in-one payroll solution to help them manage freelancers or independent contractors in various parts of the world. The good news is that such payroll software is available, and they can easily work with talent globally. 

7. Compliance 

Labor and financial laws are affected when the workforce changes and becomes global. More importantly, each country has laws employers should adhere to when processing payroll. Also, issues of data protection cannot be ignored when discussing compliance. 

Business owners should use payroll software or a system that helps them comply with various aspects like taxes, payments, record keeping, and data management. 

Automated payrolls also help employers stay updated with changes in compliance regulations in various hiring jurisdictions. 

Final Thoughts 

Technological advancement has changed how businesses manage their payroll. On the other hand, companies are looking for a frictionless solution to their payroll. An automated HR and payroll system is the ideal solution. It addresses most modern business management needs, from staying compliant, processing on-demand payments for employees, and helping employers hire and pay remote workers. It's all about having a seamless experience when processing payments.