6 payroll trends to keep your eye on in 2023 and beyond
As we step further into the year 2023, the realm of payroll management takes on a renewed significance, driven by a dynamic interplay of challenges and opportunities that have come to the forefront. Automation and AI are reaching unprecedented heights, while employee expectations undergo remarkable transformations. Amidst this ever-evolving payroll landscape, businesses find themselves at a pivotal juncture, where adaptability becomes the key to staying ahead in an increasingly competitive world.
In this article, we invite you to explore the emerging payroll trends that businesses should keep a close eye on in 2023 and beyond. These trends serve as signposts, guiding organisations through the intricate terrain of payroll management..
The booming gig economy
The gig economy is revolutionising the way we work, with freelancers and flexible work arrangements becoming increasingly popular. As per a recent NITI Aayog report, India had 7.7 million gig workers in 2020, a number expected to skyrocket to 23.5 million by 2030. As companies increasingly turn to the gig economy, it's crucial to have the right tools to manage payroll for both full-time and gig workers while complying with tax and wage regulations.
Increasing role of AI
The rise of artificial intelligence is transforming the world of payroll management, transitioning it from a mundane, transactional process to a strategic, data-driven one. With AI leading the way, the once transactional payroll process is set to become more analytical and decision-focused than ever before. By streamlining the end-to-end payroll process, AI empowers payroll professionals to take on a more strategic role in data interpretation, analytics, and decision-making, enhancing overall labor management decisions and contributing to the success of their organizations.
And the potential applications of AI in payroll management are practically limitless. Just imagine being able to ask an AI chatbot questions like, "Hey ChatGPT, is the difference between this month's payroll and last month's normal? And how does it compare to the variances we've seen over the past year?"
Shift to cloud-based payroll systems
Cloud-based software is becoming increasingly popular in payroll management, and for good reason. By centralising all employee data, from onboarding to benefits to salary adjustments, businesses can manage everything from a single, secure source. This not only simplifies the process of managing employee data, but it also enhances dependability, security, and privacy, allowing businesses to focus on growth and profitability without sacrificing data protection.
Rise of flexible payments and crypto payroll
Organisations are evolving to improve their employee experience, and one way they are achieving this is by offering alternative payment methods beyond traditional direct transfers and paper cheques. On-demand pay and crypto payroll are gaining traction, allowing workers to receive wages as they earn or choose to receive a portion of their salary in cryptocurrency. Payroll software vendors are keeping pace with these trends by enhancing their platforms to support digital currencies and automate crypto payments while ensuring regulatory compliance.
Technology-enabled risk mitigation
Modern payroll systems are highly effective in helping firms mitigate their compliance and security risks. By accessing relevant information and updates regarding tax and wage regulations in real time, payroll systems ensure compliance, preventing firms from incurring penalties and fines. As payroll data contains financial and personally sensitive information, maintaining its security is vital. The ramifications of a data breach for the business could be severe, resulting in financial or personal distress for affected employees and potential penalties and loss of data.
Improved infrastructure, vendor support for payroll outsourcing
To enhance the value provided to their payroll outsourcing clients, vendors are increasing the level of support and infrastructure they provide. Some of the crucial features introduced by vendors in this regard are database centralisation, cross-platform collaboration, flexibility, and a support network for switching to the new solution. As a result, businesses outsourcing their payroll processing can enjoy the benefits of a single source of truth for their data and an elevated degree of customer service.
In order to excel in the rapidly changing business environment, it is crucial for firms to stay on top of the latest payroll trends. A robust payroll system is critical to drive growth and create a highly engaging employee experience.
Staying abreast of these payroll trends is crucial for businesses aiming to excel in the ever-changing business landscape. A robust payroll system serves as a catalyst for growth and creates a highly engaging employee experience.