Emerging technologies like AI and RPA have brought transformative changes in various processes of modern businesses. One of the major beneficiaries of advanced business solutions is the HR department. It uses features of these solutions for payroll management and employee engagement. Let’s understand what comes ahead in payroll as it is a backbone for any company. Here we mention key payroll trends to watch out for in 2024 and beyond.

Global payroll leaders should focus on payroll industry trends to set new benchmarks staying ahead of the curve. Interestingly, these latest trends in payroll management consider various aspects including outsourcing and compensation. Let’s dig deep into these trends.

Key Payroll Trends to Watch in 2024

We can classify the upcoming global payroll trends into three broader categories- compensation, outsourcing, and technical. Here we mention these trends-

Compensation Trends

Ask for a Raise

Let’s start with an interesting survey. As per the Robert Half Salary Guide in 2024, as many as 63 percent of workers are planning to ask their employer for a raise. As the payroll industry passes through a transition period and battles hard against talent shortages and increasing employee turnover, compensation will play a major role in the coming years.

Competitive Packages

The job market is currently favoring candidates, putting pressure on companies to offer competitive compensation packages to attract top talent. This is reflected in the fact that over half (51%) of businesses plan to raise starting salaries in 2024, and 40% are resorting to signing bonuses.

More Transparency

However, the trend for overall salary increases seems to be slowing down. Another trend impacting compensation is the rise of pay transparency. According to Robert Half, 63% of companies are now including salary ranges in their job postings, believing it to be an effective tool for attracting qualified candidates.

Outsourcing Trends

Payroll Outsourcing

The demand for payroll outsourcing is on a steady rise, with projections showing significant growth in the coming years. As per one prediction, the payroll outsourcing service market will show an increase of USD 6.15 billion by 2025, while Fact.MR forecasts a 6.1% CAGR from this year and up to the year 2033.

Rise of RPA, AI, and ML

Several factors including the growing popularity of cloud-based solutions and the adoption of advanced technologies like Robotic Process Automation (RPA), AI, and ML contribute to outsourcing.

Cybersecurity and Gig Economy

The rise of the gig economy and heightened awareness of cybersecurity risks, particularly data breaches in outsourced payroll operations, are shaping the landscape of payroll outsourcing in the year 2024.

Technology Trends

Cloud-based Management

Cloud-based payroll management offers businesses significant advantages. Additionally, the flexibility of the cloud allows for easier scalability and remote access, making payroll processing more convenient. Furthermore, cloud technology integrates payroll with other HR and financial systems to drive efficiency, streamline data exchange, and minimize manual tasks.

Next-gen Technologies

As mentioned above, emerging technologies like AI, RPA, and ML will transform the payroll process in the coming time. These next-gen, futuristic technologies will set up the right process by including data validation and payroll anomaly detection over the period. Many companies will adopt these global payroll trends in a short time.

General Payroll Trends for 2024 and Beyond

Though technology, outsourcing, and compensation are major themes for the latest trends in payroll management for 2024, here is what the future holds for the industry-

Rise of Gig Economy

During and after the pandemic, many businesses have started utilizing freelancers and independent contractors. This trend has made adaptable payroll systems more necessary than ever. Traditional payroll models will need to evolve to accommodate diverse employment arrangements.

Continuous Transformation

The COVID-19 pandemic highlighted the need for future-proof payroll solutions. An official study shows that integration with other systems, technological infrastructure updates, and employee experience will remain key drivers for these transformations.

Focus on Employee Experience

In a candidate-driven market, attracting top talent hinges on a positive employee experience. Payroll plays a critical role in both employee satisfaction and retention. Businesses can expect to see increased focus on creating a smooth and positive payroll experience for their workforce.

Embracing Flexible Payment

The demand for flexibility extends to payroll. As workplaces become more agile and adaptable, businesses will need to diversify salary payment methods. One of its examples is offering Earned Wage Access (EWA) to cater to a changing workforce.

Let’s go through the key global payroll trends with their impact on modern enterprises.

Global Payroll Trends and Their Impact

While general trends paint a picture of the evolving payroll landscape, visionary leaders look ahead at the impact of payroll industry trends at the international level. Here are key areas demanding their focus-

Bridging Gap

Local expertise remains essential for navigating the complexities of multi-country payroll. However, a purely localized approach is no longer sufficient. The future lies in seamlessly combining local processing and compliance with a global perspective on data, processes, and operations.

Contingency Planning

Securing sensitive employee data has always been paramount in payroll. However, the escalating threat of cyberattacks necessitates heightened security measures across global payroll workflows. Similarly, robust payroll contingency plans and disaster recovery protocols are essential.

Strategic Shift

Emerging trends are poised to reshape priorities within global payroll departments. Moving forward, strategic thinking, data-driven decision-making, robust security practices, and embracing technological advancements will take center stage. This shift will last for at least a decade starting from the year 2024.

Conclusion About Global Payroll Trends

Payroll trends will have a significant impact on enterprises irrespective of the industry sectors. Compensation, outsourcing, and technology-based trends will play a vital role in employee retention, talent acquisition, and other related aspects. It is interesting to see how global trends in the payroll industry will influence the job market and HR departments.

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