5 Payroll Trends That Are Shaping the Future of Payroll

Posted on 25 April 2024 by IRIS FMP

Categories: Global Payroll

Each year brings new trends that define the future of payroll. From technological advancements to Artificial Intelligence, payroll systems must continue to evolve in line with the ever-changing global business landscape.

Tomorrow’s payroll systems will be designed to accommodate even newer working patterns and technologies, while ensuring employees are compensated in a timely and accurate fashion, and that all compliance is followed. Below, we will highlight the latest trends that are shaping the future of payroll so that your organization is informed and prepared.

Two people having a conversation while looking at a laptop

The traditional way of running payroll is changing and improving all the time thanks to key trends and advancements in technology. The birth of automation and integrated cloud-based technology has sparked a significant shift from manual processes and lengthy paper trails toward a more reliable and efficient system.

This transformation is due in no small part to the power of Artificial Intelligence (AI) and Machine Learning (ML) tools that have revolutionized what was once laborious, time-consuming work prone to human error. Now, payroll software allows organizations to fully automate routine tasks such as data entry, compliance management, tax deductions, and benefit payments for greater efficiency and accuracy.

Cloud-based payroll software can be accessed from anywhere in the world with an internet connection, which is another of its many benefits given the rise in remote working. Not only that but this type of payroll software can also be fully integrated with other HR management systems to provide a complete management solution for businesses and organizations including those that operate on a global level.

Here, we list the emerging technology trends that will have the biggest influence on payroll systems in the months and years to come.

1. AI and automation

AI and automation in payroll are nothing new, but they’ll become increasingly prevalent in payroll delivery as time goes on. Why? Because they streamline time-consuming, error-prone tasks and provide greater accuracy and cost-effectiveness than outdated payroll methods.

Some of the many payroll tasks AI and automation can assist with include:

  • Data entry
  • Tax compliance
  • Employee benefits
  • Data reporting
  • Fraud detection

Not only will AI and automation free up more valuable time for employees that can be invested elsewhere in the business, but they will keep getting slicker, faster, and more efficient; speeding up every aspect of payroll and its multiple functions.

2. Flexibility in payroll

With more people working remotely than ever before, payroll solutions are becoming increasingly adaptable in order to cope with this shifting labor landscape. Research has shown that remote or hybrid working is three to four times more prevalent than it was in 2019, and payroll software will keep on developing to cope with these evolving demands. As a result, the ability to process payroll quickly and efficiently and from any location using a cloud-based system is becoming highly popular with companies with remote teams.

3. Enhanced cybersecurity

Most businesses and organizations store vast amounts of sensitive data and personal information on their payroll systems. Therefore, protecting this data from cybercriminals is of utmost importance as failure to do so can result in severe fines and penalties, with the average cost of a data breach in the United States reaching USD $9.48 million as of 2023. In order to combat these increasingly sophisticated cyberthreats, data security will play an even greater part in payroll software going forward. From robust firewalls to continuous monitoring, safeguarding data against unauthorized users is set to influence the future of payroll for many years to come.

4. Real-time insights and analysis

The latest payroll software does much more than just automate your payroll function. By integrating with analytic tools, it also provides users with access to important data that provides real-time information about a business’s performance. In turn, this enables better data-driven decisions to be made, while visualization tools make it easier to digest this level of analysis, simplify processes, and identify risks and future trends.

5. Future-proofed payroll

Modern payroll technology is often fully adjustable to meet the growing variety of business demands. Not only does this allow payroll software to integrate with different setups in the workplace, but it is also scalable in line with business growth. As we move forward, new payroll software will seamlessly integrate with existing functions within the business such as HR and become increasingly adaptable.

How should you prepare for the future of payroll?

Two people looking at a whiteboard in a meeting room

All businesses and organizations want to stay ahead of their competitors, and embracing the latest trends in payroll is one way of achieving this. As technology continues to evolve at pace, businesses can acquire a significant advantage by embracing the following strategies:

Adopt cloud-based payroll technology

Moving a manual payroll function to a cloud-based payroll system should be a top priority for any business that hasn’t already done so. As well as enhanced flexibility, greater data security, and increased efficiency, cloud-based payroll solutions can be easily integrated with new technologies as they arise and offer full scalability in line with business expansion and future trends.

Undertake a payroll audit

It is important to perform a full evaluation of your payroll system now and then to ensure its capabilities match your business needs both now and in the future. Discover whether your payroll is compatible with the next advancements in technology and if your current infrastructure requires updating to cope with developing challenges and demands.

Focus on data security and compliance

Data security should be a priority for any business, and adopting the most robust cybersecurity measures will help protect your sensitive information from a cyberattack and maintain full compliance. As with any organization, security processes should be regularly updated and aligned with future technologies, including advancements in cloud-based payroll.

Look out for industry trends

Payroll technology is constantly evolving in line with business demands. It is important to stay up to date with technological advances so that your business is powered by a payroll solution that best suits your needs and embraces the very latest payroll trends.

Are you confused by the future of payroll?

If staying informed about the latest payroll trends isn’t a top priority for your business, IRIS FMP provides a complete global payroll service that ensures your international employees are always paid accurately, on time, and with zero fuss. Contact us today.