Future trends in HR and payroll solutions

Francois Steyn, Chartered HR Professional and Sybrand Botes, HOD: HR and Payroll, Lorge.

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The workplace in 2024 looks remarkably different to what it did just a few years ago. The way employees work, collaborate and communicate has shifted, but HR and payroll hasn’t quite kept up with how modern businesses operate. “Business is changing extremely fast,” says Francois Steyn, a chartered HR professional at Lorge. “In the 90s, HR moved beyond record-keeping. HR went from being only operational to transactional, moving to a value-add position.”

While little changed in the 2000s, the coronavirus pandemic accelerated technology to the point that people now expect fast, easy-to-navigate systems for personal use. Today, typical HR and payroll systems with basic functionality are the status quo, but do not cater for industry-specific functionality. The mining industry, for example, has strict rules and regulations around injuries, which require real-time incident recording. Larger retailers with employee scheduling requirements need a time and attendance system that goes beyond clocking in and out using biometrics.

“Historically, HR and payroll is a completely manual, paper-driven process,” explains Sybrand Botes, Lorge’s head of department for HR and payroll. Even though companies have advanced to the point of buying HR and payroll systems, they’re mostly there for record-keeping, helping to meet legislative requirements. “But now as we're moving into the next generation of requirements, people are looking at these systems to act as a guideline to what the process needs to be,” says Botes. “But the moment you automate something that involves people, it doesn’t always work as expected because people are human systems.”

What is actually required from HR and payroll is a solution that needs to be both flexible and configurable, a solution that must fit into multiple business types and industries. Simply put, modern businesses require workflows that weren't originally created in HR and payroll systems. “In the current marketplace, some businesses opt to provide a solution that is plug-and-play and others create a system,” adds Botes. While there is technology to fill this gap, there needs to be a next step, which is where Botes believes artificial intelligence (AI) will have a role to play: “HR has always kind of been an advisory role to business and now systems are starting to become more involved from that perspective. AI has the ability to give recommendations of what business decisions need to be and that’s the direction technology is moving in.”

According to McKinsey’s state of AI report for 2023, one in three businesses plan to increase their investment in AI. In HR and payroll, AI is also accelerating the creation of job roles, creating standardised descriptions based on company data. “A lot of big companies do not have sufficient job descriptions – even if they use electronic recruitment systems. That integration will make it so much easier for HR people to get the information they need to do their business,” says Steyn. “Business decisions will become much faster and more user-friendly.” As more employee data is collected over time, AI may be able to assist with tasks like analysing past hiring patterns or providing recommendations for the best candidates for internal roles.

There’s no question that the requirements from HR and payroll have become more intricate. From a process perspective, there are corporates that treat employee contracts as living documents. “A system not only designs and generates these documents, everybody from legal to HR and the employee need to have a view of this document at all times – and sign it off,” explains Botes. “Everything needs to be an electronic and process flow-driven experience. At the moment, it’s still an expensive solution to get implemented for most companies but we’re moving into an era where that’s going to be the norm.”

Another change is the ability for employees to use WhatsApp to view payslips or apply for leave on ESS. There are even add-ons that include capabilities like loan management – taking salary advances before payday. “That is where employees are moving towards – they want an easy way of engaging with the business and with HR, the way they apply for leave, the way they get scheduled for temporary work… that is where the future lies,” says Steyn. As the workforce becomes more dispersed, HR and payroll systems need to adapt with mobility in mind and provide solutions that are both multi-legislation and multi-currency. “They don't want to use complicated business intelligence systems that require an IT degree to be able to extract data,” adds Steyn. “And while there may not be an architecture right now that completely caters for everything, a step forward is meeting an HR consultant who can find out the bigger picture. It’s not just about the HR or payroll you want to replace, it’s about understanding the whole business ecosystem and tailoring a solution for a more seamless integration and greater functionality.”