The power of payroll: Embracing change and resilience to face COVID-19
Payroll professionals are essential. Most of us understand what a critical role payroll plays, but this year more than ever, payroll professionals have faced and overcome unprecedented challenges. From shifting traditional on-site payroll teams to remote spaces to complying with an ongoing series of COVID-19 legislation, payroll professionals are proving how resilient they truly are. So this National Payroll Week, in addition to saying a heartfelt "thank you" to payroll pros everywhere, we thought we'd take a look at all the challenges payroll has overcome so far and what to keep an eye on as we move toward the future.
How has COVID-19 changed payroll?
Many organizations have had to completely rethink how they process payroll in an effort to limit in-person interactions. Since the start of COVID-19, payroll teams have had to adapt to constant change. Here are a few ways payroll has fundamentally shifted because of that:
1. Payroll has become more of an essential role than ever
While most organizations already classified payroll as an essential role, few had adequate business continuity plans in place to deal with major crises like COVID-19. Now, from printing checks to ensuring sufficient staffing, paying employees during a crisis is top of mind for organizations as well as creating a comprehensive and robust business continuity plan to prevent payroll disruption.
2. The need for modernization has accelerated
Previously paper-based or in-person processes have now moved virtual/digital. For many organizations, many processes surrounding payroll used to be paper-based that require in-person interaction.
Nowadays, of course, to limit in-person interactions, organizations have been pushed to eliminate many of their paper-based processes. This has greatly accelerated payroll’s move to more modern processes for:
- Government forms
- Timecards, employee updates, leave requests, etc.
- Schedule changes/access to schedules
- Check printing
3. Day-to-day flexibility is a requirement
Payroll always needed to stay on top of changing regulations, but COVID-19 brought about a whole slew of new, significant changes – from the FFCRA and CARES Act to the recent payroll tax deferral executive order – with guidance that left many questions unanswered or became different from one week to the next.
And beyond regulations, significant changes to the workforces they serve (such as remote onboarding, layoffs, furloughs, and increased leave) demanded that payroll be in lockstep with their HR teams and processes to ensure that all people were paid correctly and compliantly.
All of these dynamics have pushed payroll teams to become even more efficient and agile so they could adapt their processes to meet the new requirements.
How will COVID-19 impact payroll in the future?
Just like organizations as a whole have adjusted to new ways of working, COVID-19 will continue to have an impact on payroll for years to come. Here are three key trends we see for the future of payroll:
1. The focus on employee financial wellness will deepen
The pandemic has increased the financial stress of many employees. This will push organizations to offer more flexible pay options and financial wellness benefits, including:
- Providing access to earned wages and financial wellness resources through on-demand pay solutions
- Better support for unbanked and underbanked employees who may have increased difficulty cashing paychecks
2. Vendors with great customer support will have priority
Unfortunately, in the midst of the COVID-19 crisis, some payroll teams discovered that their payroll vendor didn’t provide them with the support needed to navigate all the disruption.
As organizations continue to recover, many payroll teams are taking an extra close look at a vendor’s customer support and service, asking questions like the following:
- What are the ways in which customer support is accessed? What is the average response time?
- How often are new enhancements released to support compliance changes?
- How do vendors communicate and collaborate with customers on critical updates?
3. The need for modern payroll solutions will be greater than ever
Before the pandemic, only 39 percent of organizations leveraged a cloud-based payroll solution. However, COVID-19 has stressed how important a modern cloud solution is to ensuring payroll continuity – on-premise solutions or processes that required manual, paper-based workarounds are no longer enough.
As payroll teams move forward, a flexible, cloud-based platform will help organizations:
- Adapt quickly to changing regulations and guidance without manual workarounds or custom code
- Provide remote access to payroll data and collaboration tools from any device
- Increase access to employee self-service tools and mobile experiences
Does this crisis have any long-term benefits for payroll?
While these trends may push payroll to change and update their processes, there are many benefits to doing so, including:
- Improving access to wages through electronic pay info and payments (such as direct deposit), which enable employees to access their pay on payday (no waiting to pick up check), as well as access their pay information at any time.
- Increased accuracy and security by eliminating manual processing errors that result in inaccurate or untimely payments and deepening protections around PII data.
- Increased compliance through automatic compliance updates and electronic audit trails that reduce the risk of penalties/fines.
- Optimization of resources by reducing tedious manual processes, increasing productivity, and going green/paperless.
Conclusion: Payroll is a key part of the future at all organizations
With nearly 80 percent of Americans living paycheck to paycheck, payroll professionals recognize the importance of ensuring people are paid accurately and on time. And in a year where disruptions and financial stress is the norm, let’s take a moment to honor our payroll professionals who have worked tirelessly to keep America paid. Happy National Payroll Week!
If you and your payroll team are looking for more insights into how the right unified HR technology can help you weather disruptions like COVID-19, we're here to help. Check out our Complete Playbook for HR Technology During Times of Crisis and see all the ways you can make a difference for your people.