Research by MHR has revealed that 40% of Payroll workers are unsure whether they will remain in the industry for five years. The findings come from a survey conducted for the 2024 MHR payroll report. The survey found that 56% of respondents feel that greater investment is required in the sector. The report coincides with the start of National Payroll Week, which takes place between September 2nd – 6th
There are other signs that the Payroll workers sector is facing a crisis. It is not just people leaving the industry; applications for existing positions have fallen. Data provided by Veritone hire indicates that applications for contract (-24%) and permanent positions (-11%) have both fallen in recent months. Firms are reacting, though, with salaries increasing by 5% year over year.
Retention and attraction to the industry are not just about salaries, though. The top three concerns highlighted were:
- High levels of stress (34%)
- Job security (31%)
- Lack of investment in individuals (22%)
Is the lack of investment leading to other issues
The lack of investment may not just be about technology. 57% of respondents feel that they need to learn new skills to keep abreast of what is happening in the industry. The pace of change is also causing disquiet, with only 40% comfortable with it. However, despite that, 45% are excited by the industry’s future and what those changes promise.
Jeanette Wheeler, Chief HR Officer, MHR, said, “Our data is clear – it’s time for organisations to take action when it comes to supporting their payroll workers. If they fail to act, then a brain drain is likely to follow. The arrival of new technology has the potential to make a career in Payroll more rewarding and productive, opening up diverse and exciting career opportunities. However, this won’t happen by accident, and organisations must support employees, invest in their skills and development, and champion the function to ensure its potential is realised.”
As well as training, the payroll industry is still rife with manual work. 38% of respondents are still manually inputting data, and 30% are collating information from several reports to produce another. The lack of investment likely increases the error rate. With 89% of payroll workers stating there have been mistakes in the past 12 months which have led to late or incorrect payments. Errors increase manual work as well, as it means payroll workers want to check, double check and sometimes triple-check. Which makes it costly.
Is there a brighter future for Payroll?
It is not all doom and gloom, though. There is optimism that 47% see untapped potential within the payroll function in their organisation. Furthermore, 37% believe Artificial Intelligence is a technology that will have the greatest impact on Payroll over the next five years.
49% of Payroll workers believe their technology can help support colleagues financially, improving their financial well-being. One thing Payroll teams will need to overcome is the view that other departments have. Only 50% believe they understand Payroll well.
Wheeler adds, “As this year’s National Payroll Week theme underlines there are exciting career opportunities for those who choose Payroll. To make this a reality, organisations must innovate their payroll function, maximising the opportunity new technology such as artificial intelligence brings to empower workers, increase accuracy and attract new talent into the industry.”
MHR is also hosting PayFest, which includes not only the report but also a series of webinars discussing a variety of topics, including financial well-being, real-time Payroll and migrating your Payroll with impact, and the evolution of payroll.
Enterprise Times: What does this mean
While Payroll was one of the first departments to outsource elements, it often meant that internal processes were unchanged and used manual administration or, at best, spreadsheets. Modern systems leverage AI to pick up anomalies and help process Payroll information.
Also, technology can make a significant difference for employees in how they deal with their Payroll. Payroll technology can help employees with areas such as loans, advance payments, and financial budgeting. There is also a wealth of downloadable content available. Payroll seems to be having a difficult time at the moment. However, with technology powered by AI, the function can increase its value significantly in any organisation.
