Gaining buy-in for payroll improvements: what are the barriers?

In the modern, technology-driven world, it’s crucial to ensure that all corporate systems are fully optimised, and delivering in the way individual businesses need them to. This is particularly key in a profession as focused on accuracy and efficiency as payroll. However, a recent study has shown that nearly half of all employers report facing difficulties with their existing pay technology. But what is driving this trend, and how can businesses optimise their pay functions and systems to deliver the best results?

Reaching a tech-talent equilibrium

Our recently published  ‘Tech-Talent-Equilibrium’ report reviewed insights from 500 senior decision-makers across payroll, finance, and HR in multinational companies with multi-country payroll operations. Results from the survey highlighted the critical role that technology plays in pay processes, with nearly two-thirds of respondents saying that they consider payroll technology as very important. In particular, its role in achieving KPIs including ensuring payroll timeliness (47%), adhering to compliance requirements (46%) and enabling process automation (41%) was widely acknowledged by respondents.

However, perhaps the most eye-catching of all the report statistics was that 40% of respondents are battling with their older, existing platforms and are facing ‘significant challenges’ as a result. One consistent factor noted is that many of these issues are being found in organisations that still utilise ageing, disparate pay systems that don’t offer the benefits provided by more modern platforms. In comparison, newer, unified and tech-backed systems leverage the power of what is being increasingly known as ‘the three As’; AI, automation and APIs - to drive better performance, reduce mistakes and expedite end-to-end pay processes. Users who have adopted these platforms report experiencing far fewer errors and have seen entire pay runs dramatically expedited, to name just two perks.

Securing buy-in

However, a major blocker preventing wider adoption of these newer systems is the problems faced by pay departments and functions in gaining internal support. Securing buy-in for digital pay transformation projects is no easy task, particularly in the current economic climate and because to most outside of the specialism, upgrading pay platforms offers limited wider value. After all, most internal stakeholders won’t necessarily see clear reasons to upgrade if their staff are being paid – as the adage goes “if it ain’t broke, don’t fix it”. But the reality is, that many decision-makers simply don’t know that their pay processes aren’t operating as effectively as they should. In addition, competition for shrinking budgets is rife across business departments, and pay functions have historically been overlooked when seeking investment.

This conundrum was the subject of two of our recent studies, the ‘Business Case for Change’ and ‘Cost of Doing Nothing’, which both highlight that gaining support is challenging, but it can be done. By quantifying challenges and their wider impact on costs and productivity, as well as providing ROI-driven benefits that appeal to C-suite priorities, pay teams can craft an engaging and compelling vision for investment, and highlight the potential to become a truly future-proofed payroll operation.

Skills shortages

Payroll talent shortages should also be factored into the equation when attempting to garner support from executives. The profession, like so many other technical fields, faces difficulties in attracting skills, with 77% of very large firms stating that they struggle with this issue. If anything, this strengthens the case for technological investment; organisations need to strike a balance between humans and technology, but if the people aren’t available, it’s even more critical that tech platforms are delivering on their potential and providing fast – and accurate – results. Over eight in ten (84%) of respondents agree and said that investing more appropriately in technology could mitigate the impact of the ongoing talent crisis. Leveraging these platforms more effectively can also help businesses to better utilise their available resources. If there are fewer specialists, they can and should be focused on strategic, value-add tasks, rather than manual, process-driven ones which could be managed by technology.

Striking a balance

However, pay technology ultimately exists to support the expertise possessed by payroll specialists. This remains a human-led profession, and our reports also revealed a general recognition that a balance of systems and humanity is needed to produce the best results.  In total, 53% of respondents said that they valued technology, over personnel, but the data highlighted the merits offered by both.

Leaders clearly place significant value on the ability of people to review and improve pay processes (82%), while a further 80% indicated that their teams’ knowledge of country-specific regulations offers the greatest value. This shows that striking a balance between people and tech offers the best results for any business.

But without being able to demonstrate why investing in the combination of the right platforms and people, payroll teams will find themselves going around in circles and will continue to encounter the same problems. The benefits of striking a balance are clear; modern tech-backed, unified systems offer seamless API integrations which, combined with the use of AI and the automation of more repetitive, process-driven tasks, deliver significant value and eliminate much of the errors that are currently taking up valuable employee time. When added to the unique problem-solving, strategic and expertise-led capabilities of payroll personnel, it can create a potent and effective partnership.

While the earlier iterations of pay technology have clearly led to some issues amongst payroll specialists, the next generation promises to solve many of those problems. Emerging tech-backed systems can make the roles of high-performing pay experts far more manageable by reducing the volume of errors that require correcting, and by freeing up time for expertise to be focused on more strategic and potentially valuable tasks. While some teams are currently facing problems with their legacy platforms, securing support and investing in the future is the best potential solution.