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Trends affecting payroll and HR in 2015 and beyond

By Anton van Heerden

11 Nov 2014

South African companies face a number of human resources- and payroll-related challenges today, and there is no sign that the pressure will let up in 2015. Workforce volatility, talent development, and always-changing tax regulations and labour laws are among the issues that businesses will need to face.

Image: www.freedigitalphotos.net

But, at the same time, there are many technologies and business models that can help organisations in South Africa to achieve better alignment of HR with their business needs as well as to take the pain out of payroll management.

Some of the key trends for next year are as follows:

Compliance complexity: We're expecting to see the regulatory and tax environment continue to become more complex, in line with trends of the past 10 years. Though implementation of pension fund reform has been delayed, it is still very much on the cards, for example. And the environment changes every tax year;

Rising payroll fraud: Incidences of payroll fraud are growing at an alarming rate among SMEs in South Africa. The growing number of clients asking Sage VIP for help with forensic investigations after falling prey to payroll fraud suggests that the crime is on the rise;

Motivation, opportunity and rationalisation: The three components of the classic fraud triangle come together in the payroll to create enormous risks for businesses. An automated payroll solution and good processes are essential to containing the risks; and

New and old businesses using the flexibility of the cloud: We expect to see many entrepreneurs use cloud applications to get up and running quickly with essential business applications, such as payroll and HR.

In addition, many existing businesses will look at the cloud as a way to save operational and capital costs in their IT environments, including payroll systems. What's more, many companies that have not yet done so will put in place online employee self-service solutions to automate processes like expense claims and leave approvals.

Part of the reason that the cloud will play such a big part in the future is the way that it empowers people to be productive while they're mobile. According to the Sage Business Index survey for 2014, 59% of South African businesses believe the mobile infrastructure in South Africa makes it possible to work effectively on mobile devices. And more than 40% think that, in the future, tablets and smartphones will be of most use for accounting and/or payroll;

Strategic investment in HR: Businesses recognise that an engaged workforce with the right skills and competencies delivers a vast return on investment. An engaged and satisfied workforce is more productive and able to deliver the levels of innovation and customer service that companies need to compete in today's environment.

For that reason, many companies are automating or outsourcing routine HR processes so that HR managers can focus on performance management, training, skills development, alignment of the workforce with the business strategy, and other key strategic initiatives;

Outsourcing: Many companies are outsourcing routine payroll tasks, such as processing the monthly payroll and printing and distributing payslips. This allows them to focus on their core business and entrust an efficient, specialist provider with staying ahead of compliance requirements, technology, and other complexities of running a modern payroll; and

Online tools for smoother recruitment: Recent surveys show that up to 75% of organisations are adding online recruitment to their traditional recruitment methods. We can expect more companies to use tools, such as online applicant tracking, talent communities, and internal career portals in conjunction with their traditional recruitment processes.

In time, they'll even be able to export job specifications from their HR systems to online recruitment platforms or import a successful job applicant's details directly into their payroll and HR software. This will bring new levels of efficiency to the admin processes that surround recruitment.