At organisations worldwide, payroll has traditionally been characterised by manual data processing and a focus on operational efficiency. However, this perspective is starting to change, creating opportunities for a more strategic, data-driven approach to this business-critical function.
The vast majority of respondents (89%) to a new survey of 1,300 decision-makers around the world believe that their current payroll solution could do more to uncover insights that inform their organisation’s strategic direction. In Asia Pacific, this percentage is even higher, at 91%.
Well over half of the survey respondents in Australia and New Zealand (ANZ) (56%) strongly agreed with the statement that they needed greater transparency of workforce costs and metrics from their payroll system, well ahead of their counterparts globally (42%) and in the Asia Pacific and Japan excluding ANZ (46%).
To overcome this issue, payroll departments need to combine seamless execution of their core responsibility–paying people accurately and on-time–with data analysis and insights that improve executive decision-making and improve employee experiences. This in turn aids employee engagement and retention, thereby helping organisations realise the full potential of their people.
"At organisations worldwide, payroll has traditionally been characterised by manual data processing and a focus on operational efficiency. However, this perspective is starting to change, creating opportunities for a more strategic, data-driven approach to this business-critical function."
Allyson Skene
VP Global Vision and Strategy
Workday
The role of automation and AI in transforming payroll into a more efficient, strategic, data-driven function, is particularly well recognised in the ANZ market. For example, a higher percentage of respondents in ANZ (46%) than in all markets (40%) and APJ excl ANZ (40%) listed surfacing real-time insights to visualise data trends as a decisive feature in selecting a new payroll system. Consolidating global payroll data was also nominated by more ANZ respondents (48%) than all markets (38%) and APJ excl ANZ (44%).
The survey revealed a higher percentage of respondents in ANZ (51%) than globally (45%) and in APJ excluding ANZ (48%) had adopted predictive analytics in payroll for workforce planning, while ANZ respondents (48%) were also ahead of their global (44%) and APJ excl ANZ counterparts (45%) in using AI and analytics for fraud detection and security.
The comparative maturity of the ANZ market in implementing automation is also clearly illustrated in the survey: 60% of respondents in ANZ said their organisations had implemented automated payroll processing, well ahead of the global (50%) and APJ excl ANZ (45%) figures. In addition, only 29% of respondents from ANZ indicated eliminating manual data entry was a priority compared to 38% of all and APJ excl ANZ respondents.
However, questions remain over the ease with which ANZ organisations can progress the deployment of integrated payroll solutions. For example, respondents in ANZ found it difficult to ensure strategic alignment and support growth when adopting these solutions–over half (55%) of organisations in ANZ nominated this as a challenge, compared to 46% overall and 39% of organisations in APJ excl ANZ.
Undertaking the integrations themselves is also a standout issue in ANZ compared to other markets: 44% of ANZ respondents nominated lack of in-house expertise as an issue, compared to 36% globally and 38% in APJ excl ANZ. These obstacles potentially make it more difficult for organisations to adopt integrated payroll solutions that can meet their current or future needs, or deliver the required return on investment.
ANZ, respondents were more focused than their regional counterparts on the use of APIs in new payroll solutions. These can enable seamless data flows between payroll and other business systems or departments, eliminating the need for manual data entry into multiple systems.
The success of payroll transformation depends heavily on board and senior executive support for the change. At Workday, we believe buy-in at this level can help address payroll’s two key challenges: identifying the most strategic use of payroll data and how to align different departments to drive transformation and change. By involving senior leadership, departments can focus on integrating their own data with that of other departments to obtain insights that support strategic decision-making and achievement of key business objectives.
The right technology tools and strategies are equally critical. We see AI and automation continuing to eliminate manual processes and provide deeper insights into operations so payroll practitioners globally can focus on providing a more relevant and strategic contribution.
For that to happen payroll departments will need to consider how AI and automation can reinvent the roles and responsibilities of AI professionals. By working with senior leadership to define strategic priorities, streamline operations through integration, and freeing up time to focus on innovation, payroll is poised to become a key driver of strategic business outcomes.
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