This is an excerpt from Payroll HQ’s Efficiency, Compliance and Accuracy Whitepaper
It will come as no surprise that we are in a period of advancement where change is taking place at a blistering rate. Klaus Schwab, Executive Chairman of the World Economic Forum defines the current change as so significant that we are witnessing the fourth industrial revolution; that of a revolution of digital technology.
At an individual level, many adapt well to the rapid change taking place and there is an expectation that the way we work outside the organisation will also take place inside the organisation. Take for example the way we interact on social channels such as Instagram, Twitter, Snapchat, WhatsApp and LinkedIn. These social channels put people in an “always on” mindset as everything happens in real time. Ask yourself the question, are our business dealings enacted in a similar“manner? Businessman Jack Welch sums this by saying:
“If the rate of change on the outside exceeds the rate of change on the inside, the end is near”
A recent McKinsey survey found that only 8% of companies believe that their business model will remain economically viable in the age of digitalisation.
With an understanding that we are transitioning from an incumbent business model to a digital operating model here is a three-step framework to help with this change;
The first shift that is required to enable transition to a digital way of working is to align mindset and reimagine your way of work. Open up your thinking from inside the payroll functional to how those outside the payroll function look at it and what they require. Take into consideration how your initiatives will impact not only your people and what they will think and do but also how they will support other business functions including recruitment, training, human resource, operations and finance. Keep the benefits that your activities in payroll can bring to the organisation front and centre including key areas of risk, compliance, experience, productivity and visibility.
When shifting your operating model to a digital one keep your focus. Ask yourself what do your workers require and why do they require it? Take a human centred design approach – sometimes known as design thinking.
One change taking place in payroll at the moment is the notion of payroll moving from a batch function being run at the end of a pay period to an on-demand continuous pay model. Why is this the case? The process of engaging workers in many industries is working on a “gig” worker concept – people working across one or more employers on a task by task type engagement, think Uber, Deliveroo and Airtasker. From the workers perspective, once they have finished a task they want to be paid for the work so they can access their earnings immediately.
From a payroll perspective, this requires a fundamentally different operating model. As McKinsey describes it – the “new digital business model”. People will engage with payroll differently, processes will require realignment and the technology has to be capable of supporting this change.
As we become more and more digitally savvy we will be in a phase of ongoing and continuous improvement. Jason Averbook, HR Thought Leader describes this as a continuous state of “perpetual beta”. What does this mean for payroll processes and how do you address it?
Changing needs of the worker
The way in which people engage with the organisation is changing; gig, full time, contract and so on.
Changing needs to the organisation
Organisations, especially leadership teams, are focused on breaking operating silos and focusing on business outcomes. To support this there is a push to switch from hierarchical based reporting models to team based structures.
Focus on employee experience, customer and digital experience
How do we adapt mindset, people, process and technology to put experience front and centre underpinned by a digital way of working?
More and more manual and administrative tasks are being automated in the payroll function. For example: automation of award interpretation, introduction of voice technology and automation of integration between systems.
There are many areas to focus on including making sure you understand what digital is and how to best embrace and adopt this in your organisation. What are the legislative changes continuously taking place and how can organisations adopt these to mitigate organisational and people risk? What is the payroll data telling you that can be taken back to key business stakeholder across the business to make more informed people and business decisions?
Ultimately, digital transformation gives payroll a unique opportunity to elevate its position in the organisation and be known for continuous improvement, innovation and solving business problems.
With a rapidly changing digital-first mindset and underpinning operating model, business leaders need to ask the question. Is your current digital strategy capable of driving and supporting continuous change?
Author: Jarrod McGrath // Founder & CEO, Smart WFM
Want to know more?
Download the full whitepaper here. This whitepaper is the go-to document for Business Owners, Executives and Directors to examine their payroll processes and put a plan in place for future changes to the workplace environment.Download Whitepaper