Navigating a modern workforce: the three biggest payroll challenges and how to overcome them

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By Anthony Wolny | 16th October 2022 | 3 min read

The way we work has transformed significantly over the last few years, accelerated by the pandemic and the generational change in employees, bringing new and ever-evolving challenges.

When examining a modern workforce and its potential volatility, it’d be foolish to neglect the challenges payroll professionals face navigating the ‘new normal’ – after all, if people aren’t paid, they won’t work.

The three main challenges impacting payroll today

Every workforce will have its own battles.

From ever-changing employee demands to the legalities around workforce management.

Knowledge is power; to help you overcome the obstacles you may face, below are the three primary challenges impacting payroll today.

1) Workforce trends

Studies found that 7.25 million people are expected to work in the gig economy, and in the next ten years, 30% of employees will be working a four-day week; it’s clear that the workforce is becoming less homogenous, subsequently making payroll far more complicated.

Managing a mixed workforce can mean varying pay cycles, frequently changing employees and requirements for data to be consistently updated.

The consequences? Processes become increasingly time-consuming and prone to human error, which will only grow as these trends gradually become increasingly popular.

2) Changing rules and legislation

A third of organisations consider keeping up with regulatory changes – due to new ways of working – their greatest compliance challenge.

New working models, whether it’s remote work, hybrid or workcations, come with their own sets of rules.

Staying compliant, whilst offering the new generation of workers the benefits they want, is undoubtedly a demanding payroll task.

3) New employee benefits

With the generational dynamics of the workforce changing, organisations are ultimately forced to consider a variety of new benefits.

Apart from alternative working models, a number of employers are now offering new rewards such as wellbeing budgets.

In fact, 38% of employers stated they’ve increased their contributions to financial wellbeing, leaving payroll professionals with the challenge of including these flexible financial rewards in employees’ compensations whilst also managing their business as usual.

Overcoming the payroll challenges associated with a modern workforce  

Bottom line: requirements will continue to change and younger generations, with their own ideas of working, are making up more and more of the workforce.

How can businesses adequately prepare and deal with these challenges?

Create a strategy

Currently, a third of organisations don’t have a formalised strategy for their payroll.

In times of uncertainty and volatility, having a well-thought-through plan in place can help you react and make quick decisions.

I’d advise you invest some time to think through possible scenarios and assess how you would approach them and what solutions could help; once done, formulate it in writing and circulate it to the relevant staff.

What might seem daunting and time-consuming at first can help you significantly reduce decision-making time and speed up employee buy-in when unexpected circumstances arise.

Get the right tech in place

The payroll profession has evolved quickly, and so has the supporting technology.

Getting the right software in place helps reduce mundane and admin-intensive tasks such as data and workforce management.

Additionally, modern payroll software delivers insightful reporting, data analysis and Key Performance Indicators (KPIs), providing the insights needed to further optimise and adapt your payroll strategy.

Focus on training and upskilling

Whether it’s new technology, legislation or rewards systems, payroll is everchanging, and subsequently, so are the skills needed.
To avoid mistakes and give your team confidence, place added emphasis on training and evolving capabilities.

Software vendors can often help with system training while associations, such as the CIPP, provide a wide array of resources to help stay up to speed with the industry.  

Free up time with outsourcing

Outsourcing payroll tasks not only supports you by freeing up time to focus on new initiatives and strategies, but it also gives you access to additional expertise in the field.

Keeping up with legislation, for example, can be a demanding task for your staff, but with outsourcing, you can reclaim time in your day-to-day and ensure you have the headspace needed.

Alleviating the stress of payroll

Clearly, payroll can be challenging, and it is therefore essential to forecast, plan ahead and ensure you have the right support.

Want to focus on planning rather than time-intensive administrative duties? Check out our range of payroll solutions, designed to assist with business-critical tasks.