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At CloudPay, we’re really excited about the future of payroll. All over the world, we’re seeing payroll play a bigger and more strategic role in many organizations, and the power of payroll data and processes is increasingly being leveraged to support more modern pay experiences. This is a sentiment shared by all the attendees at our Service Partner Summit just before the end of 2023, and one of our guest speakers in particular spoke passionately about market trends and drivers, and what’s to come.
Pete A. Tiliakos is a Principal Analyst and Managing Partner at 3Sixty Insights and has a wealth of experience in payroll and HCM solutions, including previously leading the payroll operation for the Walt Disney Company. In this blog, we’ll bring you the highlights from his talk at the summit, sharing his expert insights on the key factors that will shape payroll and how business leaders and payroll professionals alike will benefit in the months and years ahead.
Why is payroll so exciting at the moment?
Pete believes that the payroll profession and practice are heading into a golden age: “We’re seeing more organizations waking up to the fact and recognizing that not only is payroll an employee experience enabler, but it’s, more importantly, a potential strategic value enabler for businesses – particularly as they grow larger in scale and expand globally,” he said.
He was also keen to emphasize that payroll forms part of the foundation of a business strategy, one that can move and scale to adapt to changing business requirements. He analogized the position of payroll within today’s businesses to that of the tires on a high-performance race car, helping the organization handle and pivot around curves: “If a company were a race car, you could have all the best talent (drivers), the best technology (engine), and the best resources and solutions to support both, but if the race car is running on inexpensive or poorly equipped tires the car (organization) can’t pivot and handle on those tires, that’s where I think problems are going to come into play,” he explained. “And that’s where the rubber meets the road – payroll, and the rich data it curates is absolutely critical to help organizations be more agile and execute on strategy.”
Key 2024 pay trends and their benefits
What is becoming clear is that, in order to support the modern pay experience, payroll solutions have to be tech driven. Only when enabled with modern technology can payroll teams provide a timely, accurate, and compliant service, minimize risk, and enable processes to be agile, scalable, and resilient, and empowered by data
For this reason, Pete picked out three major trends that are vital in today’s payroll landscape:
- Keeping your options open: the payroll software solutions that give businesses the most flexibility are the ones that stand out in the marketplace. This is especially the case if they can supplement existing solutions and ensure that previous investments aren’t written off, and if they can enable a single, harmonized view of payroll. As Pete highlighted: “I think you’re really seeing speed, flexibility, and the ability for companies to transform as rapidly as they can very appealing.”
- Exploring new levels of integration: the world of integration between payroll and HCM ecosystems is still being discovered by many businesses, and new integration capabilities are being developed all the time. Now more than ever, businesses must seek to synchronize payroll to a standard data set within a matter of weeks, and to be able to use two specialized solutions in tandem without any confusion or overlap. More importantly, modern HCM and payroll systems must be seamlessly integrated, flowing data in real-time across the organization for agility-rich insights, especially when payroll’s robust data set is paired with broader HR and operational data.
- Embracing on-demand pay: the difficulties that many employees have faced in recent years, such as the cost-of-living crisis and wider employee wellbeing, have put employer support under the spotlight. This is why on-demand pay services like CloudPay NOW, which enables employees to autonomously accrue, view, and withdraw earnings through a mobile app, have become standard fixtures in the payroll operating model and essential to the modern employee experience. CloudPay’s ability to provide global on-demand pay, direct deposits, and cross-border money movement offers a differentiated experience through convergence pay, payroll, and fintech enabled payments.
In summary: what’s to come?
The world of payroll will continue to change in the future, and two areas will be influenced in particular.
The first is that payroll will go truly global: at present, less than 30% of existing client payroll footprints are covered by a single vendor, and this figure should increase substantially. Instead of using different solutions for different regions, using one solution globally can enable data consolidation, improve payroll accuracy, and allow payroll to be fast, flexible, and certain. It’s a key driver of CloudPay’s constant campaign for expansion, currently providing payroll services in 130+ countries and growing all the time.
The second is that on-demand pay innovations like CloudPay NOW will extend the influence of payroll beyond banks and employers, and into the world of open banking. In particular, on-demand pay solutions will enable easy payroll processes in emerging markets like Africa and Latin America, where there are both trust and access issues between employees and traditional banking infrastructures.
What all this means for payroll professionals and business leaders alike is that there is much to gain from embracing the idea of ‘modern pay,’ by scaling their solutions to be integrated, global, and flexible. This represents the best way to develop payroll into a function that works for both employees and employers in the long term.
Find out more on how CloudPay is shaping these new trends in global payroll, and delivering the modern pay experience at The CloudPay Impact.
