The better the question. The better the answer. The better the world works. У вас есть вопрос? У нас есть ответ. Решая сложные задачи бизнеса, мы улучшаем мир. У вас є запитання? У нас є відповідь. Вирішуючи складні завдання бізнесу, ми змінюємо світ на краще. Meilleure la question, meilleure la réponse. Pour un monde meilleur. 問題越好。答案越好。商業世界越美好。 问题越好。答案越好。商业世界越美好。

How are companies preparing for the payroll of the future?

EY 2017 Global Payroll Survey

The disruptive forces of globalization, increasing legislative complexity and the accelerating pace of digital technology are prompting organizations to find new ways to operate their payroll function accurately and consistently across all regions in which they conduct business.

In our third bi-annual edition of the EY Global Payroll Survey, we explore how these challenges are impacting organizations, as well as the solutions they are using to address them. We also delve into the choices providers are making to respond to the challenges their clients face and whether the steps taken are enough to meet growing needs.

Our findings suggest that as companies expand their global footprint to chase new revenue streams, more companies are considering the payroll implications at the outset.

We also note a move toward a global shared services environment in an effort to address the payroll process more efficiently. Whether this is causing more payroll organizations to rely on in-house resources, we cannot be certain, but it is a notable trend to watch. What we can be certain of is that payroll organizations report a reduction in process standardization resulting from either organizational transformation spurred internally or via mergers and acquisitions, or resulting from an increased visibility into their global payroll operations.

Meanwhile, advances in robotic process automation (RPA), artificial intelligence (AI) and chatbots, among others, are enabling payroll functions to automate repetitive processes that have historically consumed considerable time and resources. However, survey results indicate that while HR is slow to seize the opportunity, payroll providers are leveraging digital technologies more and more to deliver global solutions to their clients. Unfortunately, this shift does not appear to lead to increased client satisfaction with the services being provided.

Overall, the trends we are seeing in the 2017 edition of the EY Global Payroll Survey suggest a path of ongoing transformation that continues to change the face of payroll as we know it.

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Jeff J Brown
Partner, Ernst & Young LLP

Kim A Billeter
Partner, Ernst & Young LLP

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Video: Jeff J. Brown discusses his views on the current trends in payroll service and delivery

Global Payroll Service Delivery

When it comes to either insourcing or outsourcing payroll services, we’ve seen a 27% jump since 2015 in the number of organizations when it comes to either insourcing or outsourcing payroll services, we’ve seen a 27% jump since 2015 in the number of organizations who say their payroll organization is currently being serviced solely using in-house resources and a corresponding decrease in the number of companies currently using a fully outsourced solution. This shift may result from the commoditization of payroll, and therefore increased simplicity and cost effectiveness of bringing in house. Additionally, the reason may be due to dissatisfaction with providers as was noted in previous surveys. While the root cause likely varies across organizations, the impacts associated with organizations aligning to their preferred service model, whether in-house or outsource, have noted clear benefits including increased payroll accuracy, better control, and cost savings.

Alternatively, for a third straight time, legislative compliance returns as the number one challenge organizations face when it comes to payroll service delivery. This is hardly surprising given the exponential increase in legislative complexity as digital technologies give governments and policymakers more options for just-in-time or real-time tax revenue collection. At the same time, the rise of the contingent workforce and the need for on-demand payment spawns its own legislative issues.

a 27% jump since 2015 in the number of organizations when it comes to either insourcing or outsourcing payroll services, we’ve seen a 27% jump since 2015 in the number of organizations who say their payroll organization is currently being serviced solely using in-house resources

Vendor Relationships

In recent years, payroll providers have listened to their customers and begun to identify and deliver ways of meeting global payroll needs. Whether expanding their solutions to encompass new countries or developing new reporting layers to tie together existing systems, providers have taken strides to meet the payroll marketplace that continues to focus on globally consolidated providers and global reporting.

Yet, payroll providers are only beginning to recognize the competitive advantage that a simplified process could give them. The workforce is increasingly demanding a workforce experience that replicates their consumer one: easy to use and navigate, full of insight and responsive. Those providers which tweak their services to enable this, will be rewarded with increased loyalty and sales.

Despite the strides global providers have made, there is obviously room for improvement as only slightly more than half of organizations surveyed would recommend their current payroll provider to others. This coupled with the overall vendor performance rating of 3.39 out of 5, indicates that on the whole, organizations continue to understand the need for their vendor, but simply tolerate the relationship.

payroll providers are only beginning to recognize the competitive advantage that a simplified process could give them

Workforce management

When it comes to selecting a workforce management tool, cost remains a leading factor. However, organizations increasingly recognize the need for agility and flexibility in any solution they choose to address complex business issues. Meanwhile, one in five agree that improving the employee experience around their time and attendance tool is a key criterion. This is in keeping with initiatives focusing on employee engagement and the workforce experience to promote retention and productivity in the enterprise.

Additionally, participants report utilizing more homegrown and heavily customized solutions regarding time and attendance, despite an industry trend towards more off-the-shelf and Software as a service (SaaS) solutions. This may be an indication that companies are prioritizing other technology upgrades within HR ahead of the time and attendance system.

one in five agree that improving the employee experience around their time and attendance tool is a key criterion