What s Next? Dialogue March/April 2009

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1 What s Next? Payroll technology continues to advance and impact how you perform your job. To help keep you informed, DIALOGUE gathered representatives from key payroll service and software providers to discuss the current and future trends. The topics ranged from payroll/hr systems and platforms to the influence of organizational goals, the impact of legislative requirements, and the effect of the current economy. The following highlights from the roundtable discussion will help payroll professionals and their organizations know what to expect and be prepared for upcoming opportunities and potential challenges. 14

2 What major changes do you foresee in payroll technology in the next five years, including enhancements in payroll/ HR systems? Janice MacLellan, ADP: Over the next five years, we ll see four major trends. First, there will be greater integration between payroll applications and other administrative functions (i.e., time and attendance, HR, Benefits Administration) to improve efficiency. Second, employee self-service will become more prevalent with increased routing and approval capabilities; however, organizations must ensure that technology doesn t replace services, but rather complements it. Third, user interface design will be enhanced to improve user experience and efficiency, as well as security, privacy and auditing. Finally, there will be greater interest in the one stop shop, where interrelated processes for multiple workforce management functions are connected using the services of one supplier. Charlene Brennan, Ceridian: Payroll technology will become more intuitive and user-friendly, and payroll tasks will be more fully integrated with all the related areas to ensure that all the departments are aware of organizational changes, such as a new hire. Payroll services should provide payroll departments with real-time, on-demand payroll processing, and managers and employees with more self-service capabilities to add and edit profile and payment information. Dan Nottingham, Kronos: Payroll technology must be able to support changes made to payroll rules by the Payroll Manager directly, without relying on IT or consultants. This is necessitated by the need to create new rules, as they evolve, regarding an increasingly mobile workforce and the need to better control labour costs just to name a few. Tracy Micciche, Paterson HR and Payroll Solutions: The technology will move towards global, rather than domestic, solutions. Software as a service (SaaS) will become the standard. I also expect multilingual and multicurrency enhancements so that the same system can process several countries at once. Neil Evans, NEBS PAYweb.ca: I think it will become more flexible to handle additional levels of taxation, like in the U.S. model (city, township and county). There will also be increased ability to send/receive payroll from handheld devices. Laura Hills, CyberShift: Historically, payroll technology has focused on automating the processes associated with the capture, calculations and reporting of data. While this will continue to be of paramount importance, new technology will play a greater role in addressing paperless initiatives and ensuring accurate, secure information from an increasingly mobile and global workforce. What is the most popular platform for services among organizations at the moment? Kirsten Thordarson, HR Technologies: Web-based employee self-service and other web-based products are increasingly in demand. The freedom that this platform allows clients and their employees to access, input and update their payroll information from home, work or even while on vacation is well worth the investment. Laura Hills, CyberShift: Time capture through the web for nonmanufacturing organizations and through biometric devices such as time clocks for manufacturing organizations is popular. We are also seeing a trend toward mobile devices like smart phones for white-collar workers and ruggedized devices for workers in locations where the environment is not as friendly, such as manufacturing plants or oil rigs. Marnie Larson, StarGarden Software: Web-based, online systems continue to be at the top of the list and this will likely continue in the future. Not only are online self-service easier to deploy, but they also give managers and employees the power to manage some of their own details and make inquiries that would otherwise have required a call to the HR or Payroll department. 15

3 Many organizations are focusing on quicker turnaround times and cost containment. How do you think new developments in payroll technology will help them reach that goal? Has the need for more customized reporting requirements decreased thanks to more advanced automation techniques? Do you see clients becoming more self-sufficient? 16 Charlene Brennan, Ceridian: The SaaS model provides cost savings in technology and support staff. Web-based products promote flexible work schedules with 24/7 accessibility. Payroll processing will move from mainframes and client-server technology to more flexible systems, resulting in quicker turnaround times. Mark Nickson, Telliris: Cost containment will be better realized thanks to technology that provides more detailed information. For example, by more closely understanding how the workforce is doing its work, organizations can better match labour to the task. Increased functionality like schedule enforcement will also help contain costs by, for example, making sure only time scheduled is actually worked. Laurie Thomas, ITR: In my opinion, while payroll can report on costs and feed information to other systems for analysis, its role in cost containment as it relates to labour comes in an after the fact. For organizations to contain costs up front, they should implement workforce management systems to forecast the labour required before the hours are worked. Labour analytics become especially important when you consider that salaries and wages are typically the largest cost for organizations. Janice MacLellan, ADP: I think that organizations can use payroll technology to support cost containment in four key areas. First, by moving to hosted payroll services, organizations can achieve ongoing functional enhancements with significantly reduced operating costs, as dedicated hardware, internal support and IT resources are not required to develop or operate software. Second, by more fully integrating payroll with other business systems, organizations will reduce manual processing, dramatically improving the efficiency of Payroll/HR teams. Over 50% of organizations currently use manual paper methods for time and attendance. Third, by increasing employee access to personal data and implementing new routing capability, organizations can make the approvals process more efficient, reducing turnaround time. Finally, by improving audit trail capability and using more customized reporting, organizations can mitigate compliance related costs. Marnie Larson, StarGarden Software: Reporting continues to be a crucial part of any system. Certainly, capturing detailed data and providing good reporting tools have helped users become more self-sufficient, but ultimately the strength of the reporting lies not only in the system s tools but also in the knowledge and understanding of the database. Organizations and vendors will continue to need to work together to make sure that knowledge is transferred to the end users and reporting needs are met. Charlene Brennan, Ceridian: There will always be the need for customized reporting. Businesses must be very creative and conscientious in responding to their compensation and benefits needs as well as to union contracts. Often this drives the need for specialized reporting. What is important is having flexible, intuitive, easy-to-use reporting tools for different types of users within the organization, which allow the user to generate the desired level of reporting. Laurie Thomas, ITR: I think the current economy dictates that IT budgets focus on getting more performance for the dollar, making it necessary for users to become more self-sufficient. With enhanced automation and more cost effective, easy-touse reporting applications being implemented in web-based applications, organizations need for fiscal restraint will be more easily accommodated. Dan Nottingham, Kronos: The demand for customized reporting is lessening, as reports-based decisions are giving way to process-based automated decisions. The latter is the best way to consistently comply with all company and regulatory policies. Reports will still however be necessary to validate compliance and support modifications to policies. Kirsten Thordarson, HR Technologies: I think customized reporting has decreased as integration has increased, and advancements in technology have meant greater possibilities for integration with outside systems. Seamless integration with just the click of a button instead of an export/import exercise

4 is becoming more common in systems, which means fewer steps for the client and less room for error thanks to decreased manual intervention. It also removes the need for custom report creation for all practices that can be automated. Neil Evans, NEBS PAYweb.ca: Companies need to develop what if scenarios to ensure that they can handle any changes that could impact their business. They need to be flexible and able to adapt quickly to suit changing business needs. What developments do you predict in terms of payroll and legislative requirements over the next five years? Janice MacLellan, ADP: Being the eternal idealist, I would say that the various legislative bodies governing the payroll industry will find opportunities to cooperate with each other on common issues particularly to standardize legislation and the delivery method for the employer reporting and remittance processes. Perhaps there will be a movement towards harmonized data requirements for employer/employee information. We are starting to see these trends internationally with countries that belong to the Organisation for Economic Co-operation and Development (OECD), such as the Netherlands and the United Kingdom. Mark Nickson, Telliris: I foresee greater electronic data handling and integration, and less paper handling, in government reporting. The government is requiring more electronic submissions and no longer allowing paper-based submission in some cases. Marnie Larson, StarGarden Software: Increases in payroll legislation requirements may increase the magnitude of required system updates. Payroll system vendors need to ensure that updates are applied as efficiently as possible. Product management tools and processes will become more important to the end user and should be evaluated as part of the upgrade or purchase decision when replacing HR/Payroll systems. How do you think the current economic climate will affect payroll and what do you think companies should focus on in these uncertain times to ensure future success? Laurie Thomas, ITR: To ensure future success, payroll and HR professionals should focus on systems that feed data to payroll, namely workforce management and resource planning. Inefficiencies in time calculations and labour planning are best discovered prior to payroll expenditures. By implementing workforce management and resource planning, organizations will maximize their efficiency. Mark Nickson, Telliris: Companies should focus on maximizing the effectiveness of their workforce. In general, employees realize the current economic climate is poor and should therefore be more willing to work hard for their employers; otherwise, they may risk their job. Janice MacLellan, ADP: The most obvious impact of the current economy is a significant increase in the transactional activities in which a payroll practitioner is involved, such as the termination of employees or changes in company compensation policies. However, I see this as an opportunity to increase the internal profile of the payroll function so that it is seen as mission critical and strategic. This is exactly the time payroll personnel should be re-assessing their current processes and tools, seriously looking at the opportunities to save through outsourcing, and making recommendations to senior management on streamlining administration, which would improve the bottom line. They should target manual payroll processes and seek ways to automate. Focus on processes such as time capture, third party administration, government reporting that would provide the largest administrative reductions if the electronic functionality available in payroll applications were implemented. Finally, what would you like payroll practitioners to take away from this article? Charlene Brennan, Ceridian: Keep demanding simplification. Insist that your payroll systems do the hard work, taking the complexity away from end users, and insist that the government streamline requirements so you only provide data once. 17

5 Laura Hills, CyberShift, Inc.: Think strategically! Payroll plays a strategic role in a company s efforts to support its most valuable asset its people. Payroll provides the organization with valuable information about workforce costs and trends. Tracy Micciche, Paterson HR and Payroll Solutions, Inc.: Leverage technology whenever possible. Always be on the look out for new advancements that make payroll processing more efficient and less costly. Dan Nottingham, Kronos: It is more critical than ever to make the most efficient use of your labour expenses. Automation is key. Look for technology partners who have fully automated/ integrated solutions that are easily configurable to meet the needs of an ever changing environment. n DIALOGUE would like to thank the following companies for participating. Their responses are based on their payroll expertise and experience. Janice MacLellan Director, Industry Relations ADP Canada Charlene Brennan Product Manager Ceridian Canada Ltd. Laura Hills Vice-President, Marketing CyberShift, Inc. Kirsten Thordarson Director, Payroll Services HR Technologies Inc. Laurie Thomas Executive Vice-President, Business Development & Marketing International Time Recorder Company Limited (ITR) Dan Nottingham Product Marketing Manager Kronos Neil Evans Executive Director, Payroll and IT NEBS PAYweb.ca Tracy Micciche Director, Americas Patersons HR and Payroll Solutions, Inc Marnie Larson Chief Operating Officer StarGarden Software Mark Nickson President & CEO Telliris The CPA s Certification Programs offer individuals interested in beginning a career in payroll, or enhancing their current payroll knowledge, the professional certifications that can help them succeed in today s competitive business environment. PAYROLL COMPLIANCE PRACTITIONER (PCP) The PCP certification is the foundation of your career in payroll. CERTIFIED PAYROLL MANAGER (CPM) The CPM certification builds on the PCP compliance knowledge by developing your payroll management skills. (under Certification) ext

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