Payroll and HR likely to become more linked

Issues around financial wellbeing are likely to lead to more links being forged between payroll and HR, says a new report.

Pay Day


More than half of employers expect to see payroll becoming more involved in functions that support employee wellbeing – such as HR, according to a report from the Chartered Institute of Payroll Professionals (CIPP).

Data from CIPP’s Future of Payroll Report found 55% of employers said they expect payroll to become more linked to other functions as financial security becomes ever more important to employee happiness and productivity.

Vickie Graham, Business Development Director at the CIPP,  said: “In the current climate, employee wellbeing is synonymous with their personal finances. This is echoed in the data, with payroll professionals recognising their vital role in helping to soften the economic challenges for their employees, both from an employee experience, retention and attraction perspective.

“The findings of our Future of Payroll Report also highlighted how vital payroll data is in tracking and understanding employee finances, and the role the function can play in raising financial awareness among employees.”

The report also found that employers are exploring different ways to help employees with financial issues as the cost of living continues to rise. There was, for instance, a 9 per cent increase in the amount of employers exploring pay on-demand compared to 2021. Pay on-demand allows access to pay earned before standard fortnightly or monthly payroll.

According to the report, employers recognise how this may help employees avoid interest-based alternatives such as payday loans or credit cards, whilst also realising that it presents an opportunity to attract younger talent, used to instant access through technology, through pay on-demand.

Graham added: “While Covid-19 highlighted the importance of payroll in a period of uncertainty and worry, the same can be said again for the cost of living crisis, which we are yet to see the full ramifications of.

“Businesses are clearly and rightly exploring measures to support their workers – with a significant rise in those exploring pay on-demand. This is in addition to wider moves such as employee-wide pay rises, but we expect more innovative solutions to start emerging as we get closer to the winter.”

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