2021 Payroll Trends You Need to Know

2020 and the impact of the pandemic on the workplace has changed the payroll landscape globally. Most companies have had payroll departments in the office, with the global shut down, we see a surge in remote payroll, and it’s here to stay.

2021 looks similar to 2020, and the trends we are witnessing piggyback off of the spiral the pandemic sent everyone into. We see increased work flexibility, digitization, and payroll functions. Companies are rolling out better payroll software and vetting potential employees for the right talent, as things are no longer run the conventional way. Companies have had to make significant adjustments to the norms of running payroll, including new technology and updated processes.

This post will review some of the latest trends in the payroll community that will shape this industry's future.

1. Artificial Intelligence (AI) Driven Payroll

One of the biggest trends in 2021 payroll is the influx in AI Payroll use. AI technology is used across countless fields and has proven to be a great asset to many industries, so adding it to a payroll system makes sense. Human error can be eliminated, and error-prone report generating, delayed payment, and manual process can be done away with. AI payroll simplifies tasks, streamlines payroll, ensures correct tax code input, and correct PAYE.

2. Integration of HR Technology

In the past, payroll and HR management systems have run separately (yet are interrelated). Integrating both systems would allow managers and employees to access all information from a single platform making the HR team perform better. This would streamline managing employee data by allowing HR employees to have all relevant reports and insights in one spot. This helps tremendously in a time where so many HR departments are remote. Without the ability to work side-by-side with all departments within the typical HR structure, this new structure bolsters communication across the board. These integrated systems also save the finance department precious time to focus on other strategic aspects of their jobs.

3. Improved Data Security

With remote working becoming the new norm, cybersecurity must be the top priority. Double authentication, in addition to typical security measures (i.e., security questions, etc.), must be in place to protect employees' personal data. Every organization keeps massive records of personal data for each employee hired. Advances in payroll will help safeguard this information from being leaked or stolen. Mishandling this information could lead to severe consequences. Legal action could be brought against the company, financial hardships could hit, or company reputation could take a massive blow. Cybersecurity needs to be front and center these days, especially with so many people working their jobs remotely.

4. Increase in On-Demand Pay

Financial hardship has unfortunately become the norm for most people due to the pandemic. Because of this, more and more employees are in desperate need of their hard-earned money quicker. Waiting weekly or bi-weekly for their paychecks may become a thing of the past as the millennial generation is turning to digital wallets to get paid immediately. Carrying cash and accessing personal bank accounts is becoming a thing of the past as instant interbank electronic fund transfers are rising. Employees can access these funds via smartphones, laptops, and the aforementioned digital wallets.

5. Employee Benefit Changes

Remote working is changing the face of employee benefits in most workplaces. Employers are finding it necessary to look into mental health and stress relief programs to add as a benefits package to employees. PTO also changes as many companies have employees that cross state lines. It's not as cut and dry as before because local leave laws come into play depending on where each employee is located.

Change can be challenging. New trends bring about lots of change for any company, big or small. As technology advance in the payroll industry, growing pains will come, but it will be worth the payout in the end. Up and coming technology holds a more secure future for employees and employers alike.

Do the newest payroll trends feel overwhelming? We can help! At Cornerstone Payroll Consulting, we have the latest know-how in all things payroll. Have a minor payroll issue? Or a department that needs a massive overhaul? Contact us today!