Global payroll: from back-office function to a strategic asset

The potential of payroll: global payroll survey

Why ADP surveys global payroll every year

Every year ADP’s global payroll survey takes the temperature of senior leaders with payroll responsibility. The aim of our survey is to assess payroll’s performance, resilience and strategic contribution to today’s global businesses. All of the 1,486 surveyed work in multinationals with over 1,000 global employees.

Key topics included payroll’s:

• Accuracy
• Efficiency
• Strategic value
• Potential to move from a back-office function to a strategic business driver

With businesses continuing to put the COVID-19 pandemic behind them, their focus is now on expanding operations around the world. However, respondents identified several core issues that payroll must first overcome before stepping out of the back office.

What’s on the wish list for improving global payroll?

Key findings: four main themes

1. Payroll under attack

• Six in 10 respondents (61 percent) reported their payroll operations had suffered a cybersecurity breach at least once in the last 24 months
• By addressing this issue head-on, payroll infrastructure will have the resilience to support business growth moving forward.

2. Is payroll futureproof?

• More complex and variable working patterns mean payroll transparency, accuracy and efficiency are more vital than ever - while businesses need scalable payroll teams, technology and processes
• As payroll staff shortages and inefficiencies stretch businesses, now’s the time to embed innovative payroll systems and technology to ease the admin burden.

3. Payroll that can scale

• More than half (56 percent) of respondents reported they don’t have full visibility of payroll performance, accuracy and data across all of their international locations
• Adopting a more joined-up approach will help with global efficiencies, benchmarking and central leadership so vital when expanding into new markets.

4. Driving strategy through payroll data

• Payroll data is influencing strategy at the top level, with nearly half (45 percent) of respondents  saying that senior managers increasingly request it
• Stronger integration across business systems would ensure that business leaders can extract the full value from payroll data.

Under the spotlight

The report showed that data can bring huge value to businesses in helping leaders understand their operations and staff. Yet it can also be a vulnerability if not protected properly.

Cybersecurity breaches risk business continuity

As operations have become more digitalised and connected, the risk from cybercrime has become one of the biggest for business continuity. Of those businesses impacted by at least one cyber-attack in the past 24 months:

• More than half (58 percent) described the attack as ‘major’ (12 percent)
• Nearly one in four (24 percent) said their payroll had suffered three or more breaches

This threat of cyber-attacks is causing some businesses to postpone standardising or integrating their payroll operations at a global level. Doing nothing, however, leaves organisations vulnerable to further attacks which can cause massive reputational, regulatory and staff engagement challenges. The answer? Payroll systems and teams must be prepared to withstand these attacks using robust technology, processes and training.

Pushing payroll security up the business agenda

It’s impossible to ignore the drive for data security in payroll, and this looks set to be an important area of investment moving forward. Nearly half (44 percent) of respondents plan to improve their payroll data security in the next two to three years. Staff and customers might forgive a cyber-attack the first time it happens, but subsequent problems will not be so easily forgotten. Pre-emptive action is crucial. Payroll is perfectly positioned to take the lead in ensuring the safeguarding of employee and pay data.

Combating payroll inefficiencies and staff shortages with automation

Given the importance of payroll to businesses, it’s worrying that only one in three respondents (33 percent) report having an average of 90 percent or above payroll accuracy across all of their territories. This lack of payroll accuracy is also combined with, and possibly hampered by, a shortage of payroll talent. Over a third (37 percent) of respondents have seen over 10 percent of their payroll staff leaving the business throughout the last couple of years.

Maybe as a result, more staff are questioning their pay more frequently, further increasing the pressure on already over-stretched payroll teams. Almost half of respondents (45 percent) say they are still seeing more payroll queries than before the pandemic.

Automating admin

There’s a clear opportunity to automate data entry and reconciliation by integrating systems and using robotic process automation (RPA). Yet for more than half of respondents (53 percent) RPA still makes up less than 30 percent of their payroll processes. Speeding up adoption of integration and RPA technology would greatly boost accuracy and efficiency, freeing employees from admin tasks to focus on more strategic activities.

Next steps: investing in payroll will pay off

Payroll has the potential to be a strategic force within businesses, by enabling an agile, flexible and engaged workforce while facilitating global growth. Payroll can’t progress from covering the basics – paying staff – to the level of driving strategy if employees can’t rely on receiving accurate payslips, or if managers can’t access the data and reports they need quickly and easily.

By eliminating short-term concerns and thinking about payroll as a strategic asset, businesses can build a payroll infrastructure with the agility and scalability to grow with them for the next 20 years and beyond. Payroll needs to keep up with the relentless pace of change. The longer organisations stand still or patch together their operations as they expand, the greater the risk. To help drive innovation, efficiency and growth across the business, payroll needs a unified, global, secure and resilient payroll model. Payroll must be integrated with the wider business, bringing consistency across other operations and eliminating time-consuming admin.

TAGS: Payroll ADP® Global Payroll Global Payroll Trends and Innovation Multinational Business HR Business Owner Guides