With the continuous advances in technology and digitization, global leaders and decision-makers are facing a fast-changing business environment which requires them to constantly adapt to new circumstances in order to stay competitive. Yet, in a rapidly changing world, planning ahead and preparing for the future is becoming increasingly difficult. Especially after the major disruptions caused by the coronavirus pandemic, the future is more uncertain than ever. This also applies to the future of global payroll.
COVID-19 has had a major impact on global payroll operations and payroll leaders all over the world find themselves confronted with a myriad of open questions which need to be answered: What innovations are likely to influence global operations in the future? What are the key global payroll trends to look out for? Where is global payroll headed in 2022?
In this article, we will highlight the most important factors business leaders have to consider in order to prepare their global payroll for the future.
Global trends that will influence the payroll industry in 2022
COVID-19 has caused major disruptions to the business and workplace environment. Although the world is about to emerge from the worst of the pandemic, its legacy is expected to shape the way business is conducted in the future. One of the changes triggered by the pandemic is an increased effort to incorporate more sophisticated automation processes, along with other smart and artificial intelligence technologies and cloud-based solutions. What’s more, experts predict that the importance of flexible working arrangements such as working from home and remote work will remain important in the year to come. Also, as the pandemic has significantly shifted employees’ mindsets, employee experience is said to become more important than ever. These global trends can be observed on an industry-spanning level and will therefore also significantly influence the global payroll landscape in 2022.
1. On the way to next-gen payroll
Next-gen technology is slowly but surely making an entry into all business fields and industries. The payroll sector is no exception to that. In fact, the 2020 Deloitte Global Payroll Benchmarking Survey revealed that 15 percent of organizations were already using next-gen technology in their payroll function. Another 49 percent of businesses were planning on implementing smart technologies within the next three years. When asked which technologies they were looking to adopt, most business leaders answered with engagement platforms, robotics and automation. The 2021 Gartner Market Guide for Multicountry Payroll Solutions also points out that there are early signs of a mainstream adoption of hyper-automation and machine learning in payroll, including continuous payroll processing and payroll fraud detection.
2. Cloud-based solutions will be prevalent
Another technology-related trend that is expected to gain even larger importance is the use of cloud-based solutions to support payroll functions. The Deloitte survey showed that payroll in the cloud was already a reality in 57 percent of organizations questioned, while another 27 percent were already implementing or planning to implement a payroll cloud solution in the next three years. As cloud systems enable remote access from anywhere in the world, they will be a crucial component of making global payroll fit for the “new normal”.
3. Data will be key
One of the key learnings from the pandemic for business leaders with regard to payroll is that being able to access consolidated, real-time payroll data for their entire global team is crucial for making well-informed business decisions and for tracking global payroll costs. According to the Gartner experts, global payroll data has turned into a valuable resource when it comes to workforce management in the post-COVID-19 era.
4. Alternative payment methods on the rise
Payroll processing is on the way to becoming more modern, automated and data-driven. But how about what happens after payroll calculation? If we believe the experts, there will also be some major changes with regard to employee payments. New payment models such as earned wage access which are already on the horizon – and popular in regions such as the Asia-Pacific – are expected to be adopted on a larger scale in the near future. The same goes for alternative ways of employee payment. While alternative payment methods are already gaining traction in the global e-commerce sector, the use of digital wallets and co. is also forecasted to increase significantly in global payroll as a solution to slow and expensive cross-border payments.
5. Employee experience more important than ever
Given that the post-pandemic difficulty for organizations to attract and retain highly talented workers is expected to continue in 2022, it is hardly surprising that employee experience (EX) is among the top priorities for business leaders. In the active attempt to create a positive experience for employees, payroll plays a crucial role. Finding alternative ways of getting globally distributed teams paid on time and in the right currency is, however, only one aspect of achieving this goal. Another emerging global payroll trend is the increased use of employee self-service functions such as electronic payslip visualization, updating personal data or requesting time off.
Prepare for the global payroll of the future with Lano
The trends that have been predicted for global payroll in 2022 reflect the major global trends that are currently shaping the workplace and business environment. Next-gen technologies like automation as well as cloud solutions are expected to gain further importance in global payroll operations. Employee self-service functions and alternative payment methods such as digital wallets will play an important role in creating an optimal employee experience and the relevance of payroll data with regard to business decisions and workforce planning will increase even more.
In order to keep up with global payroll trends in 2022, organizations should seek to modernize their payroll processes by using a cloud-based global payroll solution. Lano provides businesses with a centralized global payroll platform which connects all their payroll vendors, automates data flows and allows them to visualize payroll data for their entire global team on one single screen – including contractors. What’s more, our digital wallet makes paying a globally distributed team easier than ever. Interested in knowing more?
Get in touch with our sales team and start simplifying your global payroll today.