The Top Three Global Payroll Trends To Watch In 2021
Just like most other businesses and departments, payroll teams have faced a year of considerable change in 2020. The disruption caused by the COVID-19 pandemic has forced organizations to make major adjustments to the way they operate. New technologies have been adopted, processes have been adapted, and the rulebook for the way we work has been torn up and rewritten.
And, with many of these changes expected to form part of the “new normal”, it seems that 2021 will be no different. But what payroll trends should you expect to emerge in the next 12 months? Well, the future is a little hard to predict at the minute, but there are three clear things to watch out for:
Cloud and data will become critical
We’ve seen the popularity of cloud-based payroll software grow considerably over the last few years. According to this year’s Future Of Payroll Report, conducted by the Chartered Institute of Payroll Professionals, 38% of organizations have now embraced the cloud in this way. This growth is showing no signs of slowing down: in fact, 2021 is likely to be the year that cloud-based payroll becomes a business essential.
There are two reasons for this. The first is that the move towards more remote working prompted by the pandemic means many payroll teams are much more spread out geographically than they were 12 months ago. Only a cloud-based payroll solution can allow every member of the team to access all relevant data, whenever and wherever they’re working.
The second is due to the easy access and sharing of business-critical data that the cloud enables. Increasingly, payroll is expected to take a more strategic role in reporting and compliance. For example, the UK government is expected to bring in compulsory reporting on businesses’ ethnicity pay gaps in the near future. This will require payroll and HR teams to produce accurate and timely pay gap information, both to inform business strategy and ensure compliance - access to real-time data in the cloud makes this considerably easier to do.
Remote security and compliance will come to the fore
COVID-19 restrictions emerged so suddenly in the early part of this year that many businesses didn’t have time to properly respond. Remote working arrangements, both logistical and technological, were hastily put in place, with keeping business and payroll operational very much front-of-mind. But now that initial turbulence has settled down, and the long-term remote work trend has emerged, security and compliance must now take center stage.
Payroll teams handle sensitive data every day, and the consequences if that data is mishandled or intercepted are severe, whether they’re legal, financial or reputational. Many cyber-criminals have enjoyed success in 2020 by exploiting vulnerabilities in remote workers’ computers and devices, because things were set up so quickly that the proper security measures were never put in place. Cyber crime isn’t going away any time soon, and attacks will continue to grow in number and sophistication, so beefing up security and ensuring data compliance must be a top priority for payroll teams in 2021.
On-demand pay will gain traction
The unfortunate truth is that the economic impact of coronavirus may last long into 2021 and beyond. Naturally, this is only likely to increase the number of people experiencing financial stress, especially in the days leading up to their next paycheck. But this isn’t only an issue for employees. A recent EY report has found that $300billion of productivity is lost globally every year because of employees suffering from stress about their finances.
A solution to this, largely enabled by the trend towards cloud-based payroll, is on-demand pay, where employees can access wages they have accrued as and when they want them. This removes the stress of ‘waiting for pay-day’ from employees, improving their mental health and productivity, with knock-on benefits for employers too. This rebalancing of the employer/employee relationship should reap rewards in 2021 for both parties at a time when employees especially are looking for trust and certainty in their working and personal lives.