Don McGuire, CPA, is President, EMEA and Streamline, ADP. He is responsible for driving strategic growth, operational excellence, and client experience improvement across the EMEA (Europe, the Middle East, and Africa) market for ADP human capital management (HCM) solutions including payroll, time and labor management, HR, and benefits. He is also in charge of ADP Streamline, a complete multi-country payroll solution.
What is a top emerging trend for payroll professionals?
Employee experience will become an even more significant factor for determining success in the war for talent. The ADP Research Institute study, “Evolution of Work 2.0” found that even though 56% of employees globally feel extremely or very loyal to their current jobs, even dedicated workers are on the lookout for fresh opportunities to work in ways that better suit their needs. If companies want to retain their talent, they need to ensure their employees feel a sense of purpose in their work, have a positive relationship with their direct manager, and feel as though they are valued and recognized for the work they perform. Employees want to be able to measure and get feedback on their impact on the business and understand how they can succeed both personally and as a team. As such, organizations need to provide useful and easy-to-use talent performance markers and key performance indicators (KPIs), particularly in relation to career planning, time, and performance management. They also need to provide more efficient compensation and benefits tools to help empower their people.
For payroll specifically, this means accelerating digital transformation. Before adopting advanced HCM solutions, companies must be aware of the central and essential purpose of payroll. The pay slip remains one of the most valued communications between the employer and employee. Yet the role of pay in an employee’s engagement is often overlooked or misunderstood. Many companies still have an “if it’s not broken, don’t fix it” approach to payroll. They have a strong aversion to changing their payroll processes and haven’t considered the risk of not applying the digital transformation occurring in their other departments.
A modern payroll solution not only fosters accuracy, better user experience, and significant time and/or money savings for payroll teams, it also delivers a more engaging employee experience. For example, in France, ADP is working with Digiposte, the digital National Mail subsidiary, to deliver pay slips directly into employees’ electronic “safe boxes” that are used for their wider digital life. This creates a secure, sustainable, and certified record managed by the employee.
We are also likely to see more demanding levels of reporting for payroll teams, such as U.K. gender pay gap reporting.
Today, all organizations face the challenge of connecting their global workforce in a compliant way. Businesses are facing a strong need for real-time reporting. Executives need to be able to deliver a fully accurate vision of their organization so they can drive business and anticipate changes. Social security agencies, tax authorities, and pension providers are just some of the bodies that need access to data and are asking our clients to share information more regularly—not only monthly, quarterly, or annually but also in real-time. It’s a challenge for all organizations and a bigger one if you have a workforce in multiple geographies.
I’ve worked in several countries around the world. While it’s important to understand the specific requirements and expectations of local jurisdictions, there are a number of similarities regardless of location. Everywhere there is a need for perfect accuracy on pay slips and the requirement to deliver reports to various agencies is pretty much consistent worldwide. In light of more global regulations, this unified approach to payroll is likely to develop even further.
What emerging trend do you see in regard to technology?
One of the most prevalent trends we are seeing is the convergence of all HR technologies, but it’s also an area where a large number of companies are still struggling. With payroll serving as the core of any HR activity, we should be seeing smooth and efficient data analysis between payroll and other functions of HR, such as talent management, succession planning, performance management, benefits, and more. In a world with advanced data analytics and artificial intelligence capabilities, there should be the opportunity for organizations to break down silos and to have a full and accurate picture of all payroll and HR data. The unification of all HR data—payroll and HCM—allows a more consistent view of the employees, both in-country and across borders, and significantly enhances an organization’s agility to optimize its human capital.
HR professionals usually have the most valuable data in a company, but more often than not they underestimate its potential. More data-driven HR solutions offer payroll practitioners the opportunity to provide more strategic insights and guidance for the business. It’s one of the most important trends in the payroll industry: Allowing the whole HR team to use and easily place value on the data—without the help of data scientists—all the while ensuring compliance with new regulations. This will allow HR and payroll professionals to perform more accurate analysis and benchmark their organizational data with other data sets such as external public data to become more strategic business partners.
What are some essential practices and strategic choices to put in place to manage risk and compliance?
A data-driven approach to payroll and HR is a tremendous opportunity but also a challenge for the industry. Richer data makes a more attractive target in the world of ransomware and hackers, and as a result the compliance workload is increasing. Consider the European Union’s General Data Protection Regulation (GDPR) taking effect in May 2018. Most companies are focusing on their external data, but this new regulation also concerns data that organizations hold on their employees. In a couple of months, individuals will get much greater control over their data while extending the responsibilities of organizations to protect them. Modern cloud-based or outsourced HR data processing has been proven to help reduce risk and address the increasing compliance workload.
ADP works on a regular basis with customers and professional organizations like the Global Payroll Management Institute (GPMI) to keep payroll and HR practitioners informed and prepared for constant change (see this issue’s several articles on the GDPR).
Potential compliance failure could have a huge impact under the GDPR. Penalties include up to 20 million Euros or 4% of a company’s worldwide annual turnover, whichever is greater. But we are also seeing it as an opportunity for organizations to streamline how they collect and process employee data as part of their wider digital transformation.
Why and how did you become involved in payroll?
Early in my career, I spent several years in organizations that focused on consumer products and manufacturing. With ADP, I was presented the opportunity to join a fast-growing service and technology company. The service aspect was what really appealed to me. Working in service means you can partner with customers over the long-term to help drive changes in technology and discover new ways of working. The payroll industry is on one hand very risk-averse and reluctant to change, but on the other has to adapt to frequently changing compliance and employee expectations.
What kinds of skills, training, and education would be most useful for someone moving into a managerial role in payroll?
In the payroll business, you need to have core capabilities with numeracy and mathematics. It could sound strange in a world of increasing automation, but our associates need to have a good understanding of how the core payroll calculations happen and also understand the implications of a wider variety of local workforce regulations.
I need people who never stop being curious and seek continuous learning, which I believe is key to success. Payroll is constantly evolving and shifting, and it’s important to have talent that can keep abreast of these developments.
How do you hire?
Everything we do at ADP is about people. We are always looking for big-thinking associates who want and expect more from their careers, people who want be challenged, take risks, and have fun. I hire people who are able to work and grow in a collaborative and agile environment, with the highest sense of ethics and integrity.
Diversity and being open-minded to other cultures is essential to being part of ADP. Because of the scale of our operations, there are countless opportunities for our associates to have a real impact on the business.
In Europe, we operate directly in eight countries: U.K., France, Germany, the Netherlands, Italy, Spain, Switzerland, and Poland, with partners in many more. We are also working on closer integration between these countries and partners to offer customers both local knowledge and regional capabilities in an increasingly global business environment. It means we need people with a truly international mindset.
Frank J. Mendelson is an Acquisitions Editor for the Global Payroll Management Institute. He has been working with the American Payroll Association since 2009 as an editor for PAYTECH
magazine, and has presented workshops at the Annual Congress on effective communication.