John Pearce is Chief Customer Officer at CloudPay
It’s no secret that technology is making a mark in payroll. What was once a largely manual discipline is now being supported by a range of emerging new platforms that are already helping to reshape the function as we know it. However, professionals still play a critical and valuable role in the pay process, and striking the balance between multiple tech platforms, and people, is key for functions looking to add real value to their wider businesses.
The ongoing strive for greater efficiency, accuracy and scalability within payroll is driving much of the adoption of modern platforms in the profession. And, according to a recent study – ‘Tech-Talent-Equilibrium’ Report – this investment is paying off.
The data, based on a survey of 500 senior decision-makers across payroll, finance and HR, revealed that over half (53%) of leaders say they now value pay technology over human personnel. However, they acknowledged that they face challenges with both. In addition, two-thirds of respondents said they consider their platforms as ‘very important’ in daily operations. But where is the real value being added?
All payroll professionals will be familiar with working through multiple spreadsheets in order to collate data. However, it’s in these processes where the vast majority of mistakes occur, and where human weakness has its largest impact. The Tech-Talent-Equilibrium study showed that emerging platforms can support humans in this respect. It revealed that technology has a net positive impact on several payroll KPIs including ensuring timeliness (listed by 47% of respondents), adhering to compliance requirements (46%) and enabling process automation (41%).
The latest generation of tech-backed platforms are driven by core technologies that we are increasingly referring to as ‘the three As’; Automation, AI and APIs, which are all, individually and collectively, making their mark on payroll. Automated processes remove many of the aforementioned repetitive tasks associated with payroll, and offer real-time data visibility, which drives smarter decision-making for businesses. Equally, AI is increasing accuracy, simplifying the most complex and manual elements of roles, which are often where errors have been made. And APIs are allowing for seamless integration with HCMs which support real-time, bi-directional data flows and ultimately a more unified user experience. These aspects are supporting the evolution of payroll, and helping to drive it into 2025 and beyond.
However, technology can’t do everything. We’ve all seen examples of driverless cars failing to recognise trains or trees, and delivery robots that get hopelessly lost in major city centres. The same principles apply in payroll. In order to get the best results a balance must be struck between people and tech, and organisations have to find ways to operate in harmony with them.
Ultimately, people are still absolutely pivotal to the pay process, and their knowledge, experience and intuition can support the time and accuracy efficiencies made by technology, and vice versa. This isn’t necessarily a new debate, but the next generation of unified payroll technology holds far greater power and potential than any platforms that emerged before it, meaning that it’s having a much bigger impact. Equally, these platforms wouldn’t function effectively without human input. This is a symbiotic and codependent relationship, and the businesses that see the best results will be those that acknowledge this idea now, rather than later.
It can naturally be tempting to consider solely relying on these platforms to manage pay processes. After all, technology forms a major part of the foundation of modern life, and if emerging AI, automation and API-backed solutions can calculate earnings on their own, then the logic suggests that surely, they will be able to manage entirely independently in the near future.
What that concept fails to account for, though, is the strategic and expert capabilities of payroll personnel. The aforementioned report also revealed that people are found to offer the biggest value in providing expertise – whether through their own knowledge or through tech-driven insights – to support positive change. The highest recorded satisfaction rates for personnel were in their ability to review and improve processes (82%), and their knowledge of country-specific regulations (80%). Both tasks could not be managed by technology.
It’s clear that payroll tech and personnel are valued almost equally and their individual positives and negatives are recognised by employers. However, in order to maintain that balance, and therefore deliver the best results, payroll must tackle its ever-worsening talent shortage. This was reflected in the data; 84% of respondents agreed that investing in technology could help mitigate the effects of the skills crisis, which 72% of organisations reported experiencing. This suggests that many payroll, HR and Finance leaders view technology as a potential solution to the difficulties they face in hiring. While this reflects admirably on the abilities of pay platforms, it would essentially mean that employers are automating away their strategic advantage. Doing so would also mean that functions would miss out on the unique problem-solving and strategic expertise of payroll specialists, which can cause significant damage, particularly in a climate with regulatory and compliance demands increasing at pace. This is particularly key for larger employers operating across borders that subsequently face major international compliance challenges.
In order to thrive in the long term, organisations need smart, unified pay technology, harnessing the full potential of AI, automation and API driven integration. However, investment here must be balanced with focusing on payroll talent to drive and unlock the full value of new pay tech.
