A payroll operating model defines how payroll is run, which processes the team is accountable for, how systems are utilized, what is outsourced or kept in house and the technology being used.
Future payroll operating models will have a digital core, with payroll professionals taking a highly consultative role, seamlessly integrating with the HR, Finance, or strategic arm of the organization, and directly providing workforce and productivity insights for enhanced decision making. They will most certainly take on a more formal structure, elevate the payroll professional’s job, result in improved technology and use of analytics, continuous improvement facilitated through service performance, and an enhanced employee experience.
PwC Canada predicts two potential future payroll operating models: The Enhanced Payroll Operating Model and Payroll 2.0 (Digital Payroll Factory).
The Enhanced Payroll Operating Model
The enhanced payroll operating model is a stepping stone from today’s reality to tomorrow. This model introduces a formal structure and interactions model for payroll, an elevated role for payroll professionals, improved technology and use of analytics, continuous improvement facilitated through service performance, and an enhanced employee experience.
This model is already in practice for some larger sized organizations with mature HR and finance operations, and it is therefore achievable for other organizations over the next two to three years.
Payroll 2.0 (Digital Payroll Factory)
The digital payroll factory is a radically agile approach without the operating constraints that limit the traditional payroll operating model. It will allow the payroll function to adapt and change much faster.
The digital payroll factory will use artificial intelligence and automation as the main source of value creation and delivery by converting data into predictions and insights — supporting critical decisions and guiding and automating operational workflows. In this model, payroll professionals will fully leverage digital capabilities to augment and elevate their role and the value of payroll to the organization.
