Loosening the strings on HR and Payroll

By Michael Custers, CMO at SD Worx

December 3 2019 - With 2020 just around the corner, it's that time of year to start looking ahead at what's to come. But a new year doesn't necessarily bring about completely new trends. Rather it sees a continuation of developments and shifts in certain areas. Over the past year workplaces have become more flexible and fluid than they've ever been, workers have more autonomy and are actively driving change within their workplaces, and technology has brought about innovations in the workplace, on a nearly daily basis. A lot has evolved in 2019 for HR and payroll, and it is only set to continue as we enter into the next chapter of 2020.

Fluidity of HR and Payroll

For years the world of work had a very mechanistic process, for instance the norm was a monthly paid salary and the standard employment type has been permanent fixed contracts. As such, HR has been very straight and strict in its approach. However, we've seen a cadence in that rigid regime, as transient jobs roles and diversity in employee requirements, especially relating to pay and rewards, has become more popular. Whether you are an Uber Eats delivery driver on the side, a split shift worker or have been in the same 9-5 job for the past 20 years, the ability to request changes when it comes to how you are paid, your benefits, your performance management or how you are contracted has increased hugely over the past year.

In 2020, we will continue to see this move towards people wanting to control their work/life balance. We are moving past using the term 'employees' to describe the workforce. Instead we should be referring to 'workers', as employment terms and contracts are becoming so fluid and not everyone will be an employee, but they may still work for the business. As such, we will see that companies are required to think more deeply on the kinds of workers they need and the ways they want to work, then decide how they can best cater for this. Subsequently, businesses are going to need to adapt their HR and payroll processes to reflect this fluidity, so that the boundaries and fixed agreements of the past are challenged and become more flexible, to accommodate.

It's not all about payday

As people want to be paid in different ways, 2020 will see the demands on HR and payroll departments to move away from set paydays and instead look to adopt flexi-pay. This could be anything from advance pay, to counter payday loans, through to paying people in other ways, not necessarily directly into their banks, on a monthly basis. In the coming year, flexi-pay will be a key element of the employee value proposition, especially amongst the younger generations who are entering the workforce with a different mindset. They come from an on-demand society of choice and will expect the same of their employers. As such, HR and payroll will need to start reflecting this.

Similarly, as the pressure increases to update the way workers are paid, 2020 will also see a change in reward mechanisms. Workers no longer want to be rewarded simply in monetary value, instead we will see a move towards a variety of rewards being introduced in the workplace. For example flexi-working or insurance packages.

Constant performance management

In addition to a change in pay and rewards, 2020 will see even more pressure for continuous feedback relating to performance management, as opposed to the traditional once or twice yearly reviews. The diversification of the workforce could see all kinds of mixes of workers within one business, from full time freelancers to part time permanents, and whilst in the past non-permanent workers have never been inclusive across the board when it comes to performance management or benefits, this has changed. More people are choosing to be freelance as they want more control over their work life balance but they still want to have the same treatment as full time employed, such as regular performance reviews. Although they do not expect to stay in one place forever, they do expect to enjoy the feeling and conviction that what they do matters. As such, there will need to be a shift in HR and payroll to ensure that the variety of job roles are catered for and the fluid nature of the workforce is manageable and inclusive.

Focus on an end-to-end workforce approach and who owns what

What's more, due to the fluidity of the workforce, as an employer in 2020, the default is no longer going to fall to permanent employment for all roles. More workers will start to run through the multiple employment options, such as temporary or seasonal staff through to long term freelancers, and all that's in between, and hire according to demand.The consequence of this fluidity for HR leaders, is that these different roles are currently worlds apart - permanent is the domain of HR, whereas temp is the domain of procurement/operations. In 2020, businesses will need to get visibility across both.

Mid-market is now actively adopting HR tech

Finally, there is one more observation to be noted as we head into 2020. For the last 10 years the focus of HR tech investment has been on the Fortune 1000 employers, however in 2020, the attention is now shifting to mid-sized companies, as evidenced in the rise of various startups and aggregators. Additionally, with employers facing more fluidity amongst their workers, having the correct technology in place is going to vital for ensuring they remain complaint and manage their payroll efficiently.

The consequence for HR leaders is that the mid-market has similar appetite for technology and similar high complexity as enterprise market, but does not have the HR organisation and budgets. This means they will be looking for solutions which can give them enterprise-grade solutions at mid-market rates, with less internal employees in the HR and payroll positions to support this fluidity. Mid-market has been witnessing a surge in HR tech adoption for last 10 years - and in 2020 they want their fair share.

Closing thoughts

2019 was another big year of change for the workplace in terms of work/life balance, employment types and the more flexible approach employees have taken to the way they work. And now, 2020 is the year that HR and payroll needs to reflect this. HR leaders need to move from a 'calendar' mindset, with fixed dates and timings, to a more dynamic approach where boundaries and fixed agreements of the past are challenged and adapted to accommodate for the fluidity of today's workforce.

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