January 2023

Survey Sheds Light on State of Global Payroll Operating Models

By Amber Hassid

In partnership with GPMI, Alight Solutions recently surveyed more than 100 GPMI subscribers to understand the current state of transformation and level of value being derived from their global payroll operations.

Although transformation programs are positively impacting global payroll operations, less than 10% of organizations indicated achieving a fully transformed state. However, nearly half (45%) of organizations find their current global payroll operating models insufficient to enable their strategic goals.

A near equal number (43%) of organizations lack satisfaction with the overall level of value being derived from their global payroll operating models. Each concern is driving a steady appetite and uptake of modern global payroll solutions and transformation enablers in the marketplace.

Top Drivers of Value

Not surprising, nearly half of organizations (46%) indicate they are currently planning or considering undertaking a global payroll transformation initiative. The need for transformation was highest amongst firms with more than 1,000 employees, with over half (53%) citing plans to transform their global payroll operating models within 12 to 24 months.

Yet many organizations largely point to a lack of the internal skills and resources necessary to navigate the process alone. All respondents cited the need for third-party support to achieve their transformation goals; the top areas of focus required to achieve payroll transformation included strategy development, re-definition of the operating model, and strategy deployment and execution.

Growing Role of Digital Technology

Digital technology remains the leading vehicle for payroll transformation. Cloud platforms, mobile self-service, and advanced application program interfaces (API) have become standard fixtures in the modern payroll operating model. However, the largest opportunity for greater impact comes in the way of digital payment methods and analytic reporting and integrations. Each of these components are increasingly critical in the modern employee experience and in future payroll operating models.

The cognitive automation (artificial intelligence, machine learning, natural language processing) used in payroll has matured with adoption. Further, firms cite process optimization, redesign, and automation as the top investment areas over the next 24 months. Collectively, these solutions continue to have an increasing impact on the future of payroll.

Organizations point to automation, compliance, and costs as key focus areas for improvement and investment (see the “Top 5” tables).

Alight graphic

Unlocking Full-Value Potential

One survey finding of concern is that over half (54%) of organizations lack overall confidence that their executive leaders and corporate cultures are fully aligned and invested in “elevating payroll” for increased organizational impact and value.

Payroll is a critical element in the modern employee experience, central to the broader human capital management (HCM) ecosystem’s success and essential to enabling the organizational agility required to compete and grow.

To unlock the true value potential of payroll, executive leaders must prioritize and champion payroll’s success and importance in the organization. Adequate investments in a modern tech-enabled operating model are key to obtaining greater agility, resiliency, and scalability. Most importantly, companies need to unlock and engage the insights that can be derived from payroll to support data-driven decision-making for improved business outcomes.

Payroll teams must leverage investments in infrastructure to ensure consistent timely, accurate, and compliant payroll outcomes. The payroll organization must also shift its mindset and role away from being a simple back-office cost center and processor to an analytic strategic advisor and champion for impactful change. Payroll must become a value enabler that supports the business as it navigates strategic imperatives. It must earn and leverage its seat at the table, so it can share insights and perspectives in support of key initiatives.

For a full debrief of the survey and a copy of its findings, register for the upcoming webinar “Payroll Transformation: What to Expect in 2023.

Amber Hassid is Vice President, Global Payroll Solutions at Alight Solutions. A 10-year payroll professional, Hassid has dedicated her career to helping companies build efficiencies and transform their payroll. If you’d like to learn more about how Alight can help you, no matter where you are on your payroll transformation journey, visit Alight Solutions.
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