In 2024, payroll software is affordable and accessible for businesses of all shapes and sizes, from sole traders right up to FTSE100 HR directors.

Far from the early days of industrialised labour – when it took several days to manually calculate and pay employees by hand – the capabilities of automation have accelerated the payroll landscape rapidly. AI and machine learning are playing increasingly important roles, and robust data analysis is both essential and in increasingly high demand from the C-suite. And let’s not forget the role that shifting employee needs and dynamics play either. All of this is shaping, and will continue to shape, how HR leaders need to ‘show up’ for their businesses and people – the skills required, responsibilities to own, processes to nail, outcomes to deliver.

So let’s take a look at the factors influencing this, assessing where we are today and where things will go for HR teams over the coming years.

More time back in the diary for strategic initiatives

In a nutshell, payroll management has become quicker and more automated over the last few years, especially with the advent of payroll software. The byword for this development is undoubtedly ‘convenience’, with cloud-based functionality meaning that things can be taken care of anytime, anywhere, in a matter of clicks.

The fact that payroll is taking up less and less of UK HR leaders’ time and headspace means there’s more time for bigger, more strategic tasks. Some businesses have been able to save up to 80% of the time they previously spent on payroll, so that’s a lot of time back in HR leaders’ days, weeks and months. As a result, many are happily spending more time on initiatives such as:

• Retention strategies – Essential when money is tight for new recruitment. Businesses can get creative with low-cost offerings such as extra annual or parental leave, a one-off bonus for lower earners, and better market analysis to ensure you’re fairly rewarding your people.
• Learning & development programmes – It’s more cost effective and rewarding to nurture and develop skills from within. Think lunch & learn knowledge sharing sessions, CPD courses and mentoring programmes.
• Digital transformation – Something that’s high up on the wishlist of HR leaders, and is helping those who have begun the process to free up yet more time, improve processes and get better business insights for making those key strategic decisions.
• Health & wellbeing initiatives – Onboarding mental health providers, setting up fruit & veg box deliveries and even revamping company flexible working policies are just some of the initiatives that HR leaders are spending more time on.

Evolving KPIs and expectations from the C-suite

With the time spent on payroll admin lessening, the C-suite is really honing in on those more strategically-led KPIs. There is an expectation that HR can and should play a more central role in decision making, with the appetite for a people-first approach to running a business thankfully becoming increasingly popular.

On the flipside, owing to the hugely advanced and customisable reporting capabilities of modern day payroll software, the C-suite now expects an elevated level of granular data analysis and insight from HR leaders. So this means they’ll want to know about gender pay gaps, the impact of pension contributions across teams and departments, the cost of sick leave, payments due to HMRC, breakdowns of total costs per employee…the list goes on.

As payroll software becomes more developed and simpler to use, the HR leader both of today and the future should be able to meet these expectations. But payroll automation won’t be able to replace intrinsically human elements such as business acumen, curiosity, the capacity to build strong relationships, and the ability to deal with complexity…not just yet at least. HR leaders are therefore better positioning themselves as partners for their business.

An evolving skill set for the future HR leader

Related both to the capabilities of payroll software and what these enable, plus those changing expectations, the skills required of HR leaders are evolving.

AI and machine learning are starting to play an increased role in payroll management. Machine learning could, for example, be used to handle the majority of payroll, with any anomalies such as month-to-month pay variances being automatically flagged and checked by a human before payday. An advantageous skill for a future HR leader to have, therefore, may be a knowledge of establishing processes and workflows for an AI to replicate.

HR leaders are already expected to be able to accurately interpret the datasets that are coming out of payroll software, and provide insightful action plans for business leaders off the back of them. This will only intensify in the future, as the need to scrutinise and react to the minutiae of business functions increases. The goal for HR leaders is to own the knowledge and understanding of AI and automation, so that they can provide more meaningful insights based on data.

A renewed impact of HR on employees and businesses, driven by tech

The changing outlook for HR leaders and teams was a key tenet of this year’s CIPD Festival of Work. One talking point centred on how great technology could help empower employees as well as HR leaders, enhancing experiences and improving engagement.

And so it falls on HR to embrace this, to use technology that can be beneficial for everyone (e.g.: self-serve expenses, leave or performance management modules), that isn’t exclusive, that all employees feel a part of and empowered by.

Far from coming for HR jobs, tech is going to help leaders perform radically better for their businesses, and help them take the shortest path to the right decisions, reducing friction between processes and humans at the same time.