Expected global payroll trends in 2023

January 17, 2023 | 5 Mins David Daly

A new year has begun and global payroll professionals across the world are facing into a fresh new year of global payroll processing duties. Many of them are wondering what is going to be different in 2023, both in terms of their daily global payroll processing challenges as well as the overall global payroll landscape.

Remote work, flexible work and hybrid working are the new normal in a post-pandemic working world, and this had a huge impact on hiring and retention policies at multinational companies around the world. With location no longer a priority, candidates could be sourced, interviewed and onboarded into a new job remotely. This understandably, created new levels of challenge and complexity for global payroll professionals whose job it is to ensure that everybody gets paid accurately, on time and in a compliant manner.

2022 ended with a level of economic downturn that particularly impacted the technology sector. International news media websites are filled with articles predicting a potential recession next year so leadership teams at organizations around the world are in planning mode.

There is a lot going on-we are going to examine in this article, some of the likely key trends in the global payroll industry for 2023.

More focus on payroll going digital

Some multinational organizations chose to digitize some of their core business critical services such as human resources and payroll- others have not yet made the move.  But there are clear indications that global companies recognize the importance of digitizing business critical services in response to a global business landscape going digital.

Payroll delivery and management must also transition into a digital cloud-based environment if it is to keep pace. It is a business-critical service and accurate and on- time payroll is the ultimate contract of trust between employee and employer. So, we expect a lot more global payroll digitization in 2023 as it has implications for employee engagement and the employee experience.

This will take the form of the digitization of the end-to-end workflow process of payroll. Payroll will likely be managed in the cloud so global payroll professionals can leverage and utilize innovative digital tools that help them do their jobs and deliver payroll in a smarter, faster and better way. Digitized processes also tend to be far more secure, and this is an important consideration for hugely sensitive global payroll data.

We also anticipate that this level of digitization will happen in alignment with other critical departments that are directly related to payroll, specifically human resources. What we are talking about here are digital integrations connecting to the wider payroll ecosystem of HR and finance. Payroll cannot be processed in isolation and therefore the digitization of payroll should happen as part of an overall digital transformation project of core business services. Hr leaders are expected to support investment in better payroll software which connects seamlessly with hr software and supports the onboarding of top talent in the organization.

The benefits of digitizing the payroll process include much faster data entry and validation, an entirely more transparent and visible process, better control over compliance deadlines, integrations with HR and finance and much more efficient day-to-day processing thanks to digital tools such as dashboards, system alerts and cloud communication tools.

Broader adoption of the Hybrid Model

A hugely significant learning in payroll delivery in 2022 was the death of the myth around a supposed single service delivery model. It simply does not exist, and this was a fact recognized by the leading analysts across the industry.

As a result, the conversation moved away from some mythical silver bullet solution where one individual provider could process payroll across all of your countries under a single contract. Instead, the conversation moved towards a far more realistic acknowledgement that payroll is essentially local and global employers will therefore have a need to engage with as many local country payroll providers as their payroll requirements dictate.  Companies who have payroll obligations in 10 or more countries can only realistically deliver payroll using a hybrid model: a mix of service providers and whatever number of local country vendors is needed.

After the acceptance of this, thoughts then naturally turn to the question of how to manage it all. Hybrid is a perfectly normal and acceptable way of delivering payroll as long as you don’t forget the management question. You need to apply a global framework that covers all of your countries and vendors. It has now been established that no single provider or aggregator services model can achieve this for you.

The level of global management capabilities that can give you the global as well as the local view of what is happening across your payroll can only really be achieved by a technology solution-a global payroll control platform. We expect that 2023 will be the year when global companies stop seeking mythical solutions and look to take back control over their payroll by using as many service providers and local country vendors as they need to get the job done and then using technology to manage it all in a way that gives them visibility and control over every payroll country-this is essentially what all global payroll departments want.

Hyperautomation for payroll processing

The concept of automation and global payroll delivery and management is nothing new – but hyperautomation is purpose-built for payroll and takes automation to a new level. We expect that in 2023, there will be a lot more companies interested in automation that is specific to global payroll and can solve a lot of the complex challenges they face, particularly around data processing in the pre-payroll data stage.

Automation in payroll is the process of using machine learning software or robotic processes to apply automation to any repeat process workflows such as data entry. This removes the individual manual input from these tasks and greatly speeds up the processing time.

Hyperautomation is the concept of automating all parts of an operational process that can be automated. This goes beyond simple, task-based automation -it is next-level automation and can include multiple automation tools & processes working together at the same time.

There are a number of valid reasons why global payroll should be automated:

    • it is much faster and more convenient
    • there is much greater accuracy
    • reduced likelihood of human error
    • create time in the global payroll delivery process
    • frees up professionals to focus their attention on other high-value work
    • create execution excellence and operational efficiency

The list goes on, and it is clear to anyone who looks into automation, that very obvious process improvements will take place very quickly once robotic process automation is applied for previously manual tasks. Vast amounts of payroll data for example could be bulk uploaded, checked, validated and approved in seconds- what kind of difference could this make to your working day?

Put simply, automation is no longer the future, instead it is the present. Those not operating with automation in their global payroll delivery process are behind the curve.

Payslip creates and develops purpose-built automation technology, an advanced form of robotic process automation that is constantly active in the background during all stages of payroll delivery-from pre payroll data input & validation all the way out to last mile reporting and analytics

We automate more parts of the payroll delivery process than anybody else out there in the market. Our market-leading software uses a form of configurable automation of payroll steps similar to RPA but at a higher level, with the ability to perform actions that require critical thinking in specific situations

What this means for global multinational companies is huge time-savings, productivity gains, reduced risk, better accuracy, and payroll professionals free to focus on high-value work. This is likely to be a key global payroll trend in 2023 as who wouldn’t be interested in these kinds of benefits?

On-Demand Pay will be requested more

Payslip attended a lot of international global payroll and human resources conferences and events last year. A topic that came up a number of times is the subject of earned wage access and on demand pay. We think it is going to be a key trend in both payroll and HR in 2023.

It’s a new era of work, global candidates have more choice than ever when it comes to selecting an employer. There now exist a new generation of skilled and available candidates who are approaching new opportunities with certain expectations that were not a part of the employee experience five years ago.

With all the advancements in modern technology, particularly in the area of fintech and digital payments, employees now recognize that the technology to pay them as they earn does exist add earned wage access is appealing. In a post-pandemic world, a lot of old traditions are being left behind-the nine to five office day has become a thing of the past for some organizations and there has been a huge increase in the number of fully remote companies operating today.

Employees are asking the perfectly reasonable question, “ why should I wait for the last Friday of the month to receive payment for work I have delivered 20 days earlier?”. Earned wage access or on demand pay would enable employees to access their earnings at specific times and no longer have to wait for the traditional end of the month paycheck. In a world where financial management stress is very common, it is not hard to see why accessing wages earlier in a month would be very appealing for employees-after all, not every bill arrives in the same week as the paycheck.

Human resources department are looking at this as a potential recruitment tool-it is an attractive offering that could separate them from the competition and enable them to secure top talent in a hugely competitive recruitment landscape. But there are massive implications both for global payroll and HR when it comes to on demand pay initiatives. Inevitably, this will result in some interesting integrations with fintech applications and digital payment software. It is not yet clear what kind of administrative and data related burden this could place on global payroll professionals, most of whom are already under huge pressure to make the end of the month paycheck deadline.

But it is certainly an interesting space, fintech organizations are already making a lot of noise on this subject, and some of the more innovative organizations who are keen to get there first, will be looking closely at this subject in 2023.



For more information about our Global Payroll Control Platform contact us today.




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