More Than a Paycheck – Global Payroll Trends to Watch out for in 2021 and Beyond
By Ruairi Kelleher, CEO of Immedis
It has always resonated with me that January is named for the Roman god Janus who is typically depicted with two heads as the Ancient Romans believed that he could see both backward and forwards. Today January continues to be synonymous with this idea of looking to the future while reflecting on what has gone past. Whether it is making new year resolutions or the idea of a clean slate, this is the time to assess and plan for change.
2020 will be remembered as a year of seismic changes – both political and personal. Eighty-one percent, or 2.7 billion people, were affected by COVID-19, the global pandemic that served to remind us how intimate and small the world is. From job losses to moving to remote working, the working experience has been irrevocably altered. Although working from home was initially a temporary response, according to a recent Gartner survey, 74% will move at least 5% of their previously on-site workforce to permanently remote positions post-COVID 19.
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Already in flight, the pandemic accelerated the move to the cloud as organizations quickly saw the need to transform their operations to ensure uninterrupted service. 2020 also saw a slew of new legislation, making compliance and protecting the security of your employee data more critical than ever before.
As we look ahead and organizations continue to grapple with managing the fallout of the pandemic and Brexit, it is imperative that global payroll professionals understand what to expect so that they can prepare their strategies for this year.
An escalation of touchless HR
Innovation and response to user demand will result in a continued push for a truly seamless, even painless, global payroll process. The complexity and labyrinthine nature of many current operations are untenable, especially as the nature and makeup of the workforce evolves. The onslaught of international legislative updates and the consistent threat of a data breach is further driving this need for a frictionless interaction. However, a critical enabler for this is the smooth flow of data between an organization’s HCM systems and its payroll technology. Dig a little deeper, and this also means integration between regional and localized engines. After all, we are talking about the gathering and collating of employee data from multiple local points from Austria to Zimbabwe, each needing to comply with all local and federal government regulations while also adhering to global compliance rulings like GDPR as well as changes that come with Brexit.
An increase in demand for perpetual validation
Given that one of the top concerns for organizations is maintaining statutory compliance, we can expect to see a greater emphasis on accuracy in all facets of the payroll process. However, the challenge is ensuring this without the need to have legal experts on the ground. Organizations must guarantee not only the accuracy of employee personal data such as bank details but also country-specific requirements- for example, in Canada, employees, must have their Social Insurance Number to receive their pay. Missing information can delay a pay run or result in an employee not getting paid. Perpetual Validation addresses this as it conducts an upstream validation of data requirements to process payroll in each country. Local legislative prerequisites are introduced directly in the platform, continually prompting review as gaps in data are identified. Artificial intelligence (AI) looks at the overall data and determines where or what data is inconsistent or missing. For example, a statutory change in a particular country may result in the requirement for additional employee data. And all this takes place in real-time. It consistently checks and alerts the team when an item is missing. As a result, the missing data is retrieved and entered in time for the pay run to be complete and for all employees to receive their correct pay.
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A major focus on the financial wellness of employees
Even before COVID-19 hit, many employees were expressing concerns over their financials. The 2020 Workplace Benefits Report shows that only forty-nine percent of employees feel financially well, down from sixty-one percent in 2018, while fifty-nine percent admitted to not having control over their debt. In other research from the Federal Reserve, forty percent of people in the US do not have $400 set aside in case of an emergency. Employers are aware that they can play a role in improving the financial wellbeing of their employees and are becoming more active in providing guidance and education around financial wellbeing. Again from the 2020 Workplace Benefits Report, we know that sixty-two percent of employers feel extreme responsibility for their employer’s financial wellnesses, up from thirteen percent in 2013. One critical factor employers must remember as they plan a strategy around financial wellness is that we now have a historic five generations in the workplace. Therefore it is not just about creating a one size fits all program. It is about designing and delivering more personalized assistance covering everything from paying off debt to having an emergency fund to cover unexpected expenses to retirement planning and more.
As globalization increases, more organizations are now looking at ways to optimize their international payroll. Fundamentally it is about ensuring the most efficient way to deliver accurate and timely payments to all employees regardless of whether they are in Argentina or Zimbabwe. However, it is also about leveraging the payslip as an opportunity to inform and educate employees about financial wellness, all while adhering to country tax and employment legislation. A daunting task indeed, but one made significantly less complicated with the right payroll solution.
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