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4 trends shaping the future of employee compensation in APAC and globally

4 trends shaping the future of employee compensation in APAC and globally


Cybersecurity and scaling operations are among the biggest priorities for senior payroll leaders surveyed.

Close to half of the senior payroll leaders surveyed in the region are planning to improve data security (44%), the accuracy of employee pay (36%), and reporting capabilities (32%) in 2023, a survey published today (Wednesday, 15 March 2023) has found.

On a whole, the survey, titled The Potential of Payroll: Global payroll surveyand conducted by Automatic Data Processing (ADP), revealed that cybersecurity, scaling operations, legislation, and driving strategy are the biggest priorities for these leaders.

Kylie Baullo, Managing Director ANZ, ADP, commented: "Our data shows that in Australia and across Asia Pacific, the same organisational issues and opportunities are being identified across the board, and these are the ones organisations want to address in the immediate future. This may put additional pressure on existing cybersecurity, HR, and operational skills shortages as the global talent war stretches itself even further."

In line with these findings, the report identified four key trends shaping the payroll landscape in the next three years:

#1 Cyber secure payroll

With high-profile data breaches by global companies, as well as local companies in certain markets, taking place in the past months, data security has emerged as a top-of-mind concern for leaders. However, while nearly all (98%) respondents noted that it had become more important in the last 12 months, less than half (44%) cited it on their list of planned payroll improvements in the next two to three years.

Payroll is also seen as "an urgent and present danger for businesses," with 61% of respondents globally reporting that their payroll operation had been impacted by a cybersecurity breach at least once in the last 24 months.

In more concerning findings, the threat of cyber-attacks has caused many organisations to postpone their plans to standardise and integrate their payroll operations at a global level. In particular, 40% noted that data security concerns are the biggest barrier to implementing a global payroll model across their geographies – more than any other factor.

#2 Futureproof payroll

Despite global skills shortages, a looming recession, and other challenges, many businesses are looking to scale up their operations, which, for some, could mean having more employees onboard. 

With that in mind, close to four in 10 (36%) organisations are looking to increase the accuracy of employee pay reporting. At the same time, about three in 10 (31%) plan to increase the timeliness of employee pay. 

These efforts, as shared in the report, will help to address current issues, with more than half of the respondents (56%) reporting that they currently don’t have full visibility of payroll performance, accuracy, and other data across all their international locations.

The report further highlighted:

  • Almost seven in 10 (69%) say that they’ve introduced more internal audit checks in the last three years, while 61% have brought in employee surveys. Yet, most firms are still not prioritising payroll accuracy, with only a third (36%) of respondents saying they plan to focus on the problem over the next two to three years – raising concerns that payroll errors will continue to go unchecked.
  • Only one in three respondents (33%) report having an average of 90%-or-above payroll accuracy across all the countries they operate in, compared with 52% before 2020 •
  • Three in 10 (30%) admit that errors only come to light when a payroll audit is run, while a quarter (26%) say they are only alerted by employee complaints, and around one in five (22%) only realise when they are contacted by local authorities.
  • More than half (53%) of respondents say their payroll service has been affected by a shortage of payroll staff.
  • More than a third (37%) have seen more than 10% of their payroll professionals leave the business over the last couple of years.
  • When it comes to recruitment, the findings indicate that more needs to be done to attract people into the payroll profession, as almost half of the respondents (48%) say they have difficulty finding payroll skills from outside the business.
  • As a consequence, organisations are opting to train existing nonpayroll staff (64%), upskill existing payroll staff (72%), or review how they do payroll with fewer people (57%).

#3 Payroll that can scale

No doubt, when payroll practices are inaccurate or inconsistent, they can affect many levels of the business and its prospects. On that note, of the leaders surveyed, one-third of the HR and finance leaders reported that they were not confident in their payroll systems to support their plans for growth, or geographic expansion.

Adding to that, two in five (40%) payroll leaders reported that each country has different methods of tracking compliance performance, which has, in Australia for instance, led to a focus on planned regulatory compliance (22%). Additionally, almost a quarter (23%) of respondents would like to transform their operations to deliver standardised multi-country payroll processes.

#4 Foundations for the future: driving strategy with data

Payroll is influencing strategy at the top level, with nearly half (45%) of the respondents reporting an increase in relevant data from senior management. These metrics are being used to inform cost management, growth, and diversity, equity, and inclusion strategies.

Currently, many businesses lack the right tools and big data to inform insights, it was added. Particularly, only 40% are implementing global dashboards and just 29% are using real-time analytics. This has contributed to 32% of payroll leaders’ desire to improve reporting capabilities, the report noted.

Additionally, the opportunity to drive efficiencies and other opportunities across business units is a focus for 25% of respondents, who are looking to increase integration with payroll and other business-critical systems.

About the survey

The Potential of Payroll: Global payroll survey consists of interviews with 1,486 senior individuals, in 16 countries, who were heavily involved in, or had in-depth knowledge of, payroll in their organisation. All respondents work in multinational organisations of more than 1,000 employees globally and all are departmental managers or above.

  • 465 in Asia Pacific (Australia, China, Singapore, India)
  • 303 in Europe (France, Germany, UK)
  • 215 in Latin America (Brazil, Chile)
  • 101 in the Nordics (Denmark, Finland, Norway, Sweden)
  • 302 in North America (USA and Canada)
  • 100 in South Africa

All interviews were conducted online in the local language between 10 June and 28 June 2022.

Photo / Shutterstock

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