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Four key trends in the future of payroll


Back in the good old days employees got a cheque at the end of the month, if they were lucky they got a payslip. How times have changed - salary, commission, bonus, flexible benefits, plus the need for self-service capabilities have all conspired to make a smart payroll package an essential item for all companies.

As we move into 2019, a recent whitepaper from Ascender reveals the top trends to keep a lookout for in the payroll space.

#1 Artificial intelligence (AI)

From ground level to upper management, AI has become more widespread across companies in recent years. Hidekazu Matsubayashi, regional sales director - Japan, Ascender, noted AI had the biggest impact on payroll management in the last year, and that will only continue.

He explained: “Some basic calculation and data tasks can be handled by AI. For example, based on the Japanese law governing payroll, employees have to decide if their spouse will be eligible for tax exemption or social insurance exemption. AI will cover those sort of processes and offer solutions outlining what staff members are eligible to receive.”

That said, Matsubayashi acknowledged that while AI will be applied to some tasks, there will always be jobs that need to be performed by people.

#2 Transition to the cloud as well as a shared services model

The rapid transition to cloud-based services has key advantages for payroll - software programs will be regularly upgraded, information is archived, and computer data access is made easy and can be readily available on smart devices anywhere, anytime.

Krishna Ramalingam, head of Asia account management for single country and small-medium business, Ascender, said: “There is no doubt the move to a cloud-based platform is in big demand. But what I believe impacts payroll more and what has been a trend I have seen recently is a transition to a shared services model and demand from companies to want to consolidate payroll into one or two locations around the region.”

#3 Two-way integration of payroll with human capital management (HCM) systems

What started with a one-way integration from a HCM to payroll system is now seeing payroll data being sent back into the HCM systems, in order for decision makers to have more accurate information around payroll.

However, there is more to the story, as Ramalingam pointed out: “It is not just about automation, it is because they need to have compliance and they (companies) do not want two different systems having two sets of data and therefore an organisation not really knowing where to go for the most accurate information.”

When managed correctly, HCM integration will enable organisations to achieve a global perspective on the workforce with the security of local compliance, noted Ascender.

#4 Data security and compliance

Many changes are happening in this area, especially in terms of legislation and regulation.

Ramalingam elaborated: “There is the General Data Protection Regulation (GDPR) for one. Another example is China, who will be formally releasing a legislation on data security and how data leaves the country.”

The whitepaper noted knowledge in such legislations is crucial for organisations with a presence in multiple countries who are seeking to consolidate their HR and payroll processes to one or two locations, as well as for multi-country payroll providers to remain compliant.

Moving into 2019, HR heads would keenly track these payroll trends to enable their employees to work smarter and more conveniently.

Photo / 123RF

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