10 features to look for in a future-proof payroll system

The Covid-19 pandemic compelled company executives to rethink what it means to manage human resources. In the abrupt transition to remote work, HR managers have led the charge in ensuring business continuity to achieve a full recovery and continued stability.

To realign the organisation towards resilience, HR managers must be able to offload their most manual tasks. The hours spent on menial work such as data-entry, record-keeping, and reporting could be allocated instead to high-value functions such as strategic planning and employee development.

The future of managing HR processes involves automation and AI technologies that help HR teams streamline functions like payroll. According to the Gartner 2019 Artificial Intelligence Survey, 17% of organizations use AI-based solutions in their HR function and another 30% will do so in 2022. HR leaders mentioned that their top reasons for deploying AI are: cost savings, more accurate data-based decision-making, and improved employee experience.

As an HR manager, you are entrusted with designing internal systems and processes. To keep up with the challenging times, you can put forward the proposition of investing in automated payroll software. Here are 10 key features to look for to ensure your selection is fool-proof.

1. Comprehensive and configurable settings for HR personnel

As the HR manager, you must first be familiar with the company's needs and goals. A system that offers all possible features in the market may not be the best one for your growing team. What you want is the right mix of key features used most frequently by your personnel, and the capability to configure and customize settings when you need to.

A payroll system is expected to carry out quick and accurate payroll processing. Will the software help your team make fewer errors? It should enable HR personnel to customise specific formulas and calculations that they can “set and forget”, except for important updates.

An effective payroll system allows you to input multiple types of employees — from full-time and part-time staff to temporary workers or consultants — to reflect the variety of people your company engages with. This prevents you from incurring penalties in misclassification of employees and contractors. It is also the foundation for calculating wages, taxes, withholdings, and overtime pay.

If your company is present in various countries, you will make your HR personnel’s lives easier if you have flexible multi-language settings and currency conversion in the system. Tax calendars differ as well, so you must be able to sync key dates in the system’s calendar and receive notification prompts to process and submit tax documents on time.

2. User-friendly interface for employee self-service

According to Gartner, organizations that embrace a more personalized and consumer-centric approach to employee experience increase the average employee’s performance by 17%. There are many strategies to improve engagement at work, and sometimes it includes providing tools for administrative processes so they do not feel bogged down by paperwork. A 2020 survey on HR digitization in Malaysia, commissioned by Digi and conducted by Vase.AI, found that 88% of employees feel that working in a digital-led environment eases their workload very efficiently.  

A great payroll system must have a user-friendly interface that allows for easy adoption even in a multi-generational workforce. In their self-service platform, they can have real-time access to their pay stubs, work leaves, tax forms, and other withholdings. If they file a leave, their managers can review and approve it quickly on the system sans email threads and antiquated forms.

3. Cloud-based solution for easy scalability

Your business tools must scale with the growth of your company. Cloud-based HR will soon be the standard for globally distributed teams and fast-growing companies. This is even more relevant during and after the pandemic as remote work has the potential to become the norm across industries, as a 2021 McKinsey report estimates.

A cloud-based payroll system allows HR professionals to work with real-time data sourced from teams in different locations. Cloud-based solutions are also easier to set up and deploy, and updates can be rolled out regularly without much effort from HR personnel compared to disconnected spreadsheet-based systems.

4. Designed for mobility and multiple devices

When business and leisure travel resumes, employees will revert to their habit of using smartphones and tablets to access company tools. The mobile application of a payroll system should never be an afterthought, nor so boring and dull that users become frustrated. Rather, it must be intuitive, interactive, and pleasant to use.

5. Smooth interoperability with other systems

According to Gartner, one of the challenges HR teams face in deploying AI solutions is the complexity of integrating AI into existing in-house infrastructures. Some companies may have started digitizing time-tracking or prefer to stick to an accounting software, but these may not align with the data sources of specialized AI solutions.

This does not mean that HR managers have to build solutions from scratch. You may look for a payroll software that offers smooth interoperability with your other existing systems. When you approach a service provider, mention your company’s current tools and ask them how they can integrate these systems with their payroll software.

6. Easy reports generation

A payroll software should allow HR managers to capitalize on their robust databases to process information quickly and export detailed reports. These reports can help employees save costs, identify gaps, or reinforce strategies that work. Within your HR team, you can reduce bottlenecks in HR processes or pinpoint opportunities for employee engagement. Look for a payroll software that helps you make forecasts and solves problems.

7. Data analysis capabilities for improved decision-making

With a payroll system fully integrated with the rest of your HR management system, you can run people or talent analytics to derive insights on employee engagement and productivity.

“Data is the new currency when it comes to the workforce,” said David Millner, Founder and Consulting Partner at HR Curator. “And as long as HR retains that human touch, the advent of data should not scare any HR practitioner.”

Data can concretize the positive impact caused by successful HR practices on company growth, adding value at the strategic level and improving productivity across the board.

8. Updated security features for data protection

Without the secure connections installed in a physical office, remote teams could be logging into business tools using an unsecure network. Choose a payroll software that is ISO-certified and applies two-factor authentication. You may also limit your HR personnel access to a Virtual Private Network (VPN) to prevent  malicious attacks on company tools. Some cloud-based payroll systems even manage upgrades, firewalls, and anti-virus tools automatically.

Blockchain is a technology that experts believe will also find its way into digital HR, as it enables secure processing of personal data, work history, or financial details. Data and information will be difficult to falsify or tamper with.

9. Compliant with local HR laws  

HR managers and company lawyers cannot possibly keep up with the changing HR laws in different countries on their own. Still, there are severe financial consequences for non-compliance — so managers cannot afford to ignore regulations. Consider a payroll system provider with in-house legal experts who can update you on the most relevant HR regulations nearby.

10. Reliable customer service from the vendor

A payroll system is only as good as the after-sales support you receive. A software vendor must be able to walk you through the configurable features of the payroll system, train relevant personnel on troubleshooting and maintenance, and share their expert advice on using digital tools to manage your workforce.

Building proactive productivity in the post-pandemic world

In this crucial recovery phase of the pandemic, HR managers need to take a step back from the daily grind of administrative processes and visualize the ideal environment for employees and executives to be proactive, not reactive.

You don’t have to do it alone. When looking for payroll software for your company, you may ask for recommendations from fellow HR professionals who have deployed various services and experienced challenges first-hand. You may also look for an industry-vetted HRMS vendor that offers a variety of professional services for HR managers that does not only simplify your processes but empowers your staff to accomplish more.