Most business functions are taking advantage of modern technology to migrate from outdated systems - better known as the digital transformation. But for many payroll teams, this doesn’t seem to be the case. Kronos recently explored the evolution of payroll technology in partnership with the American Payroll Association and found that 1 in every 3 payroll professionals is working with a solution that is more than 10 years old. Think about that—the last time a change was made to that payroll management system, the world was just being introduced to Apple’s iPhone for the very first time in 2007.
Here are some other key findings from the research that I thought were interesting:
Half of organizations do not track payroll KPIs.
The findings suggest outdated, manual processes and legacy payroll software limits a payroll department’s ability to track and report KPIs and hinders their ability to keep up with today’s speed of modern business. It’s simple, you can’t manage payroll issues you can’t measure.
According to the survey, approximately half (49 percent) of respondents admitted that their payroll team does not regularly track and report KPIs. For those who do track KPIs (51 percent), the most common metrics added over the last decade include measuring the impact of manual/voided/stopped payment (31 percent), and payment errors as a percent of total payroll payment (23 percent), and total processing time per pay cycle (18 percent) – all of which are direct indicators of payroll performance and accuracy.
If you don’t track metrics, you lack visibility into your organizational performance, good or bad — and you can’t provide quantitative evidence for improving your payroll management systems. Payroll teams that actively track key metrics through current payroll technology are using their data to make more informed business decisions for their team and their company. They also know that measuring key metrics can help them focus efforts on improving the employee experience.
Digital solutions that empower the payroll team are top of mind.
Whether hourly or salary, a manager or employee, organizations understand that their payroll software extends far beyond the back office. To make their own role more effective, payroll professionals responded their next solution must have:
Security-access levels based on position is critical (90 percent)
On-demand reporting and analytics (87 percent)
Seamless integration with time and labor management to improve data quality (81 percent)
Comprehensive ability to track multiple worker classifications (76 percent), such as seasonal and temporary employees in addition to full- and part-time
If your current system lacks any of these key must-have features, you’re already behind in your efforts to support your organization’s business objectives. These survey responses make it clear that payroll professionals know their potential to add business value is being constrained by insufficient software that forces them to be administrators. They want technology that helps them work smarter, is intuitive to their needs, and empowers better decision making.
The time for speed in payroll is now.
The speed with which the payroll team and others within the organization – such as finance, operations, or executive leadership – can access data and extract into their own reports for a more complete look at performance, enables them to make more real-time decisions. The faster the data can be accessed and analyzed, the quicker a company can respond to employee and customer needs.
Without payroll, employees don’t get paid and if employees don’t get paid, they leave. The speed and accuracy with which payroll serves its employees impacts an organizations engagement, retention and brand.
As payroll teams are making their way into the digital transformation arena, they need to evaluate the effectiveness of their existing systems. The world of business continues to evolve and change, and so must payroll and the technology they use.