Whether your company is growing organically or through mergers and acquisitions, you need to be able to pay your new in-country staff in full regulatory compliance from the start.
But finding and recruiting qualified payroll staff to enable this to happen can prove challenging. Sixty-one percent report that the payroll service they deliver is or has been affected by staff shortages.1
As your organisation plans to expand, could you be underestimating the value a skilled payroll team can bring to your business and to successfully setting up abroad?
Payroll: A job you fall into, or a profession you aspire to?
In (notably few) countries such as France and Italy, payroll is regarded as a multidisciplinary profession. Higher education institutions offer bachelor’s and master’s degrees in HR management and payroll. Organisations require such qualifications for non-entry-level payroll positions, with some candidates choosing to specialise in areas such as social security contributions.
Despite the inherent complexity of payroll, in many other countries, people tend to view it as an ‘accidental’ career. Staff might find themselves in the payroll team after covering a colleague’s extended leave, for example, or on secondment from another department.
The perception of payroll as a coincidental career path stems partly from the way companies have approached this non-core business function in the past. “It’s still common for firms to hire payroll staff and subsequently introduce a round of redundancies, only to hire staff back at a later point of the business cycle,” says Melanie Pizzey, CEO of the Global Payroll Alliance.
Conventional corporate structures have payroll teams reporting to HR or finance departments (or, increasingly, to shared service centres, who report in turn to HR or finance). Relegated to the status of a satellite to more high-profile business functions, payroll has struggled to establish itself as a discipline in its own right
71%
The high proportion of firms that say they’re training existing non-payroll staff to cover payroll jobs (71%1) is evidence that in many places, payroll is seen as a business activity that anyone can effectively take on.
Do payroll professionals feel valued?
The good news: since 2020, business leaders’ perceptions of payroll teams have begun to shift.
Almost overnight, payroll staff became essential workers (especially in companies still processing employees’ pay on-premise). As they grappled in drastic circumstances to make sure employees were paid in compliance with the raft of rapidly introduced regulations, such as furlough laws, business leaders gained a newfound appreciation for just how hard it is to run payroll successfully. They began to see payroll as less of a boring, back-office necessity and started to grasp its frontline, strategic potential.
The talent crunch hits payroll
Companies are struggling to recruit people into payroll at all levels. This is a perennial concern; HR and finance leaders wonder where the next generation of payroll entrants will come from.
Current tight labour market conditions are having an even more marked effect on the payroll function. Eight in 10 (83%) of organisations say they are trying to grow their payroll team across the business. While for others, simply replacing people who leave — so the team at least stays the same size — is also important to over three-quarters (76%).1
If your payroll service is adversely affected by staff shortages, it could mean major regulatory repercussions and risks to employees’ livelihoods.
Why are payroll people quitting?
Demographic-related reasons. Historically, payroll teams have comprised a disproportionately high number of older workers. The change in the working landscape since 2020 prompted many people to hasten their retirement plans, leaving the payroll function particularly vulnerable to attrition.
Women are also overrepresented in the payroll professional demographic. Melanie says, “The ‘always-on’ nature of payroll jobs may not lend itself to part-time work, which disadvantages the higher number of women who want this working schedule. Current organisational practices don’t facilitate job-sharing arrangements, which women more than men may favour.”
Deserting a function that’s failing? Average tenure in individual payroll roles might be falling back, but staff are staying in the payroll profession generally, according to Melanie. “As professionals, payroll staff don’t want to fail — they know the importance of getting it right,” she says. The question is whether companies are doing enough to support them in this commitment. With two-thirds of firms around the world reporting payroll accuracy rates of less than 89%,1 are companies investing enough in this business-critical function?
How are companies tackling the payroll skills shortage?1
- 81% are upskilling existing payroll staff and changing how they work.
- 76% are replacing payroll staff who leave.
- 71% are training existing non-payroll staff to work in payroll.
- 65% are reviewing how to do payroll with fewer people.
Make sure the payroll skills shortage doesn’t hold back your company’s growth
The changing face of payroll
Payroll leaders aren’t the only ones having to work harder to recruit and retain the right talent to deliver the essentials, such as paying their employees accurately and on time. These days, as businesses make ever greater demands of payroll operations, the responsibilities of the typical payroll team have evolved.
This has resulted in an increasing requirement to bring dedicated technical or specialist capabilities onboard. These range from data analytics and data security to business process improvement, compliance and IT expertise. A prime driver of this change is senior leadership teams seeking data-driven business insights that can help shape both day-to-day operational decisions and longer-term strategy.
What those dedicated resources are doing in payroll
In fact, around two-thirds of payroll operations have bolstered their capabilities to include dedicated specialists with the following skill sets1:
- 69% Payroll processing professionals
- 69% IT (technical) resources
- 67% Data security specialists
- 65% Business improvement skills
- 64% Analytical/reporting resources
- 62% Compliance experts
What’s more, a further quarter of businesses would like to have such resources in the future, but don’t have them yet.
As your company prepares for overseas expansion, it may well be among the 83% of our survey respondents who are growing their payroll team across their global business, or the same number (83%), growing it in one or two countries. You may recognise your own difficulties in hiring payroll talent in the 53% who say they’re having difficulty finding payroll skills from outside the business.1
Companies’ wish list of payroll skills is growing ever longer. Are you clear on the skills profiles that will be needed to support business expansion? How can you structure your internal payroll organisation to optimise the skill sets of in-house staff and outsourced global payroll partners?
Download our guide to payroll skills for internationally expanding businesses.
1 ADP, The potential of payroll in 2025: Global payroll survey
