While implementation of new HR technologies and digital tools is not the top priority for organizations in 2019 (as compared with results from 2017), technology remains a major component of the overall payroll strategy.
Respondents were asked if their organization’s human capital management (HCM) platform in use was an on-premise or a cloud-based solution (a new question added in the 2019 survey), and not surprisingly the results show cloud-based HCM platforms have gained momentum in use among survey respondents, with 55% stating that they have a cloud-based HCM platform (with an even higher rate of response from those with a formal strategy in place).
Cloud-based platform adoption may be attributed to several factors: insourced payroll operations are more common, using cloud-based solutions due to the retiring of legacy on-premise platforms, lack of satisfaction with payroll provider value proposition and greater ability of providers to deliver out-of-box solutions that meet company needs without heavy customization.
Benefits offered by cloud-based products include shorter implementation life cycles and cost savings, but these products often require organizations to standardize their processes so that operations are enabled using these platforms. While cloud vendors have historically targeted smaller and mid-market companies, they have expanded capabilities to meet the needs of larger clients, which may mean the trend will continue.
Payroll can be enabled not only through HR and payroll technology platforms, but also through other digital solutions. Automation remains a top payroll service delivery challenge as companies continue to invest heavily in emerging technologies, with a high percentage of surveyed organizations either using or planning to use intelligent automation and chatbots for payroll processing and interaction with employees.
Finally, as operations are streamlined via the payroll strategy components mentioned thus far (service delivery and operating model, vendor management and technology), increasingly companies are further investing in the employee experience.