Payroll automation is the future. Yet, many companies are still concerned about the change and its perceived risks.
In the past several years, Ayanda’s workload has grown considerably. As a payroll administrator, she’s working more closely with the payments team in the finance office. They have more questions because of remote and hybrid working and often look to her for answers. The company’s legal team is concerned about growing pressure around the taxation of salaries and data privacy regulations. Since everyone is riding out a tough economic environment, staff loans are at an all-time high, and there is much less room for calculation mistakes or late salaries.
These problems require attention and accuracy, which is made much harder when Ayanda and her team rely on a largely manual payroll system. Yet, even though payroll automation can solve these challenges, there is still a lot of resistance to the idea, says Sandra Crous, Managing Director at PaySpace by Deel:
“Many companies recognise that payroll automation can be good for them, but they hesitate because they also realise that automation is complicated if you don’t have the right foundation in place. There is also resistance to change. However, it’s the future of payroll. Automation is not something you can afford to avoid indefinitely.”
Concerns About Payroll Automation
Payroll automation delivers results. According to the Global Payroll Efficiency Index (PEI) report, automation has delivered a 35% reduction in payroll issues since 2019, tackling issues such as legislation changes, first-time approvals, and data input.
Still, companies don’t reach those results in a single step, and they expect to encounter several issues, including:
- Reducing payroll staff
- Data silos and fracturing
- Complex integration
- Steep learning curves
These concerns can be valid, but they also often form unnecessary mental barriers and deserve closer inspection:
Reducing payroll staff:
Many payroll employees worry that automation means they lose control or become redundant. But Crous disagrees, “Here’s a fact—payroll is complex and needs a lot of human attention. I’ve never worked with a company that fired payroll people after modernising their systems. Instead, those staff went on to focus on more strategic payroll matters. There’s always something more for humans to do with payroll.”
Data silos and fracturing:
Most companies’ data is in disarray, which can derail the accuracy of automation. Crous says this is a common issue, “You do need a reliable single-source of data, not just for automation but for any digital modernisation. But an experienced payroll platform partner will know how to help you clean and organise your data.”
Complex integration:
Organisations jump into digital modernisation, knowing they can integrate different systems, but then discover that is a lot more complicated than expected, “A lot of service providers undersell the complexity of integration. You need a good plan and a skilled team to map, build, and test integrations. Go with a technology partner who tells you the truth, not tales to make you feel good.”
Steep learning curves:
Payroll systems are often well-embedded in a business, and changing all the processes and accrued knowledge is a big ask. But Crous is sceptical, “People often conflate perceived change with their resistance to change. Sometimes, it’s cultural, such as when management decides to adopt a new system without consulting its users. The benefits of change are almost always superior to the pain of change, and when you use a partner that takes change management seriously, you can avoid much of the pain.”
How to start your payroll automation journey
Judging by the above answers, the right payroll technology partner makes the biggest difference in harnessing payroll automation. There is also a second component: a payroll platform. Companies that use cloud-native payroll platforms see the best automation results. These platforms are innately more flexible and have native automation, data, and integration capabilities.
Legislative updates are a good example. In a standard payroll, such as an ERP module, a change to a region’s salary laws requires an elaborate and often months-long change project that delivers long after the new laws come into effect—and at the urging of the client. On a payroll platform, the service provider loads the changes as they happen and pushes them to all the clients who don’t have to lift a finger. In some cases, they don’t even realise there is a new law (though the best providers do inform them).
For someone like Ayanda, a payroll platform and responsible provider will solve her problems. Payroll automation doesn’t just save time. It delivers clarity, empowers more people to interact with payroll information, and lets payroll administrators focus on their strengths.
“Every company should look at payroll automation,” says Crous. “Start with a reputable payroll technology partner and payroll platform. They have the experience to iron out the tough spots and help guide you to where you want to be with your payroll systems, not just for now but any future changes. Automation future-proofs payroll.”
