Digital technology has revolutionised traditional processes and procedures across most industries. Significantly, the payroll discipline has been radically changed and the days of having someone specifically assigned to look after this critical area of the business (and only this area) are over.
But all is not lost and, despite apathy among job seekers when it comes to payroll administration as a potential career path, business leaders can always rely on the outsourced back-office function, payroll business process outsourcing (BPO).
Human capital management specialist CRS Technologies says payroll BPO or the use of third-party vendors means instead of having an employee or two focus entirely on payroll administration, the business shifts this responsibility on to an outsourced partner.
“This means that companies can focus on their core, bread-and-butter business without having to spread resources too thinly,” says Ian McAlister, General Manager, CRS Technologies. “One of the reasons payroll BPO is becoming more popular is because people who are recruited to join a company are often hired to work across various disciplines, not just payroll. So they do not tick one of the most essential key performance indicators for payroll professionals – meticulous attention to detail.”
The fact is that payroll – whether or not fully digitised – remains fundamental to a business’s operation.
CRS Technologies says that generally, businesses that do not embrace digital technology can get away with this approach in pretty much most functions or disciplines – except payroll.
“There’s just too much too risk; the stakes are too high,” adds McAlister. “Digital tools are designed to automate, process data in real time, generate and manipulate reports, and ensure that all duties and responsibilities within the payroll domain are covered, and covered properly.”
With legislation like PoPIA (Protection of Personal Information Act) forcing businesses to review their payroll administration capability, administrators have more responsibility than ever to ensure smooth, seamless payment and accurate remuneration. This level of pressure is another reason decision makers take up the payroll BPO option.
No matter the extent to which businesses embrace digital architecture and use this as an intricate part of payroll functionality – and/or negotiate service level agreements with BPO vendors – there are always several factors that must be carefully considered.
Insightsforprofessionals.com features an impressive list of these considerations. This list is as relevant to payroll as it is to any other back or front office functionality, and speaks to some of the challenges businesses pick up – even in today’s data and digital-centric business environment – such as resistance to change, fear of new processes, reliance on technology and disruptive technology like AI, robotics and machine learning overtaking the role of the human being.
The list includes developing a clear digital transformation strategy, encouraging new technology adoption and experimentation, the offer of training to help employees leverage new technology, and reliance on success stories to advertise benefits.
However, the justification case for payroll BPO is very clear. As McAlister explains, while choosing the wrong provider, security and underestimating service costs are all considered risk factors and potential disadvantages, the positive side of maintaining flexibility, facilitating global expansion and improving efficiencies without doubt make a far stronger business case.