2019's Biggest Payroll Challenges - The Line Up
2018 is at an end and to bring in the new year we spoke to our Outsourced Payroll Bureau Manager, Clare Temprell, about the key challenges she thinks the payroll profession will face in 2019.
1. Legislation and a bit more legislation.
There’s never a year where legislation doesn’t change in some way or another, so it doesn’t come as a shock that this is at the front of the line-up.
By the time we reach April 2019, the UK will operate under three different tax regimes, when Wales are granted the position to adjust its tax bands – just as Scotland did previously. The next rise of minimum Automatic Enrolment contributions will also occur within this time frame.
On top of this, there will be the changes to post-graduate student loan repayments, with minor deduction nuances for England and Wales. However, if an employee has a Plan 1 undergraduate loan alongside their postgraduate equivalent, payroll will need to calculate 9% of earnings above the Plan 1 threshold (£18,000 in 2018/19) and 6% of earnings above the postgraduate loan threshold (£21,000).
2. Trust the Tech
Good technology is able to alleviate many of the admin-heavy and complicated calculations, as well as reducing the likelihood of errors or misjudgements. However, it’s paramount that payroll professionals conduct due diligence to ensure that any trust they place in technology, as well as the technology vendor, is well-placed.
It’s important to ensure that whatever system you choose, you have complete peace of mind regarding the accuracy and depth of legislative updates. This applies to switching to an outsourced service provider. Double, or even triple checking their credentials, industry foresight and track record is highly advisable.
3. Invest in Insight
However you choose to manage your payroll, and whatever your reliance is on external systems and providers, industry professionals can’t afford for their knowledge to become obsolete. Payroll teams are always going to be consulted for advice, whether it’s by HR, business leaders or the workforce in general, which means their insight needs to stay up to date.
Finding one single place of advice to collect this insight, even when it’s for legislative updates alone, is often particularly difficult – guidance is usually a grey area and it’s not uncommon for decisions to stall. For example, HMRC promised more clarity for RTI information at the end of July, however it didn’t occur within this timescale. As a result, payroll professionals need to ensure a proactive stance towards their development, or they run the risk of being left behind.
4. Shortage of Talent
This is possibly linked to the apparent shortage of experienced payroll professionals, particularly those who are looking for new positions. Therefore, it’s important for the payroll department to work hard to attract fresh talent, especially within a forward thinking HR and payroll team. However, the new payroll apprenticeship framework potentially goes some way to address this. It simply requires some consideration as to how these new apprentices can be adopted into larger teams.
5. Fallout From Recent Developments
Due to the employment landscape evolving faster than it has done previously, it often takes time before the implications of developments are seen on the working front-lines.
As a result of the Taylor Review, for example, the legal obligation to state the number of hours that hourly-paid employees have worked will soon come into force, and it’s unquestionable that more changes will follow.
In order to cater for the needs and wants of today’s workforce, staff are being offered diverse reward packages much more often. Currently, it is optional for benefits in kind to be reported and taxed through payroll; however, it’s inevitable that at some point this will also become compulsory.
It’s challenging for regulatory bodies to police these changes, however, as the Pensions Regulator’s checks on automatic enrolment have shown – compliance, or in some cases, non-compliance, will be investigated.
6. Automation on the Rise
In summer, the chief economist at the Bank of England warned that ‘large swathes’ of the UK’s workforce face the threat of unemployment as artificial intelligence takes over some human jobs. Understandably, this unsettled members of the public.
However, as someone who works within technology – automation is a frequent topic of discussion, but for much more positive reasons. Automation will hugely benefit the modern workforce, it can easily streamline processes by executing simpler tasks that at present, completely take over employees’ days. As well as this, the capabilities of ‘robots’ and Artificial Intelligence are advancing at such a rapid pace, no-one really knows what the next 10 years will look like. Automation can help businesses become much more productive, it doesn’t have to make job roles redundant – simply make the people within those roles more effective. If technology is able to help payroll teams accurately calculate Gender Pay Gap figures, this frees up more time for the profession to work on the more valuable elements, e.g. modelling, engagement with HR colleagues and next step analysis.
7. Now, now, now.
Younger employees within the workforce are well known for their demands for immediacy, fast and simple consumption of information is expected, across multiple platforms as standard rather than any kind of novelty. In previous decades, payroll has been slow to innovate, possibly because the profession itself is burdened with more and more legislative changes, making it almost cripplingly difficult to advance alongside other professions. However, along with efforts to attract young people into the payroll world, there needs to be a commitment to investigating fit-for-purpose technology that contains the depth of information needed to satisfy wider business requirements – but is both simple and effective to use.
Want to make sure all your legislative knowledge is up to date? Our training courses are all available here.
Don’t fancy running payroll in April? Find out how IRIS’s Managed Payroll Service can take 2019 payroll off your hands in our free webinar.