New data has revealed that 83 per cent of organisations are using payroll technology developed 20 years ago or more.
The findings come at a time when a wage underpayment epidemic is sweeping across some of Australia’s biggest companies…
The data comes from the 2019 Payroll Benchmarking Report, an annual study by the Australian Payroll Association.
Its survey of 1,831 organisations – which collectively pay 1,577,853 employees and produce more than 48,915,846 payslips per annum – found that the majority (83 per cent) had not updated their payroll software since the year 2000.
Among the 17 per cent of Australian organisations who use payroll technology that is newer, three-quarters (72 per cent) confessed they use products that are mostly suited for small businesses. Yet just 50 per cent of those organisations have less than 100 employees.
CEO of Australian Payroll Association Tracy Angwin says payroll professionals are failing to review the set-up of their payroll technologies alongside legislative changes in employee pay and entitlements.
This is a major factor that has, and will continue, to cause employee payment oversights.
“These days, technology is being developed at a rate unlike we have seen before, and there is now payroll software being delivered on handheld devices and smart phones.
“Despite these developments, our benchmarking report has found that many companies still have manual tasks in their payroll processes.
“The increased security and human error risks associated with these types of processes is concerning.
“With more and more companies facing employee underpayment scandals, it’s crucial that organisations minimise the incidence of payroll errors by ensuring their software is configured based on current legislative requirements and preferably delivered via cloud-based applications.”
Tracy reveals six benefits that an up-to-date payroll technology should have:
- Fit-for-purpose. Good payroll technology should be relevant to the organisation’s industry, to the organisation’s employee payment model (fortnightly or monthly, wage-based or salary-based, casual or full time), and should be able to grow as the organisation’s employee numbers grow.
- Creates a highly efficient payroll office. Good payroll technology should minimise human error, and eliminate most manual processing to create a more efficient payroll office. This will enable payroll managers to devote more time to interpretation of legislation and awards, and payroll strategy.
- Streamlines everything to do with employee payments and entitlements on the one platform. Modern cloud-based payroll platforms come with secure integration options that enable payroll managers to streamline all payroll components on the one platform – this includes employee time sheeting, leave record-keeping, entitlements, and employee award information.
- Good user experience. A modern integrated payroll technology makes it easier for employers and payroll managers to share data, work remotely, manage leave and automate award interpretation. These systems are specifically designed to support the payroll function and are more hassle-free than using manual planning and budgeting tools, such as Excel.
- Greater support services. Good payroll technology should be customer oriented by offering remote and phone support. The support services of these technologies should understand the need for fast problem-solving, accuracy and the legal requirements that must be met by employers.
- More flexible working arrangements for employees. Modern payroll technology will include a self-service payroll portal. This enables employees to enter their timesheets, check and confirm their rosters, update their personal information, and even apply for sick and annual leave – all at their own convenience. This limits the possibility of confidential employee information being sent via email or other non-secure data exchanges, does away with a paper trail, and gives employees some ownership of their working schedules.