The Covid-19 pandemic forced many organizations to change how they do business. Payroll professionals were key workers, playing an important role in getting the global workforce paid through uncertain and difficult times. 

A year and a half later, many companies are recognizing the value of a strong payroll team. The path to post-pandemic recovery is rocky, but successful organizations will see the obstacles along the way as opportunities for change. These three challenges are likely to affect payroll departments in 2021 and beyond: 

1. Increased focus on payroll accuracy

The pandemic has shown how inaccurate payroll is for many workers. ADP Research Institute’s new study, People at Work 2021: A Global Workforce View, found that nearly half (45%) of workers are paying closer attention to their paychecks than they did before the pandemic.

This additional scrutiny may have been because of furlough and other support schemes, but it has exposed other causes of payroll inaccuracy. Over 61% of organizations surveyed in ADP’s The Potential of Payroll research said that a growth in payroll queries during the pandemic has meant they can’t focus on more strategic initiatives. Late payments have risen, with 69% of workers paid late at some point, up from 60% before the pandemic. Only 27% of organizations said their payroll was over 90% accurate six months into the pandemic, compared with 52% before the crisis. Payroll inaccuracy has been a ticking time-bomb – it was there under the surface before the pandemic, and the challenges of the past 18 months have not just exposed it, but made it worse.

The opportunity: Automating manual calculations and digitizing paper-based processes not only saves time and effort but also enhances accuracy, freeing up payroll teams to play a more strategic role in their organizations. As companies restructure their relationships with employees after Covid-19, increasing payroll accuracy not only frees up payroll staff for more strategic work, but the reduced stress for staff helps retain and engage your best employees.

Some companies are doing this by implementing self-service portals. Mobile applications and tools that enable workers to digitally track and manage their pay are gaining traction around the world, with higher adoption rates in APAC (51%) and Latin America (48%) compared to North America (31%) and Europe (21%).

2. A more complex and distributed workforce

The pandemic sparked a surge in remote work. Despite closures and movement restrictions starting to ease in many countries, workers continue to seek flexibility in the way they work — be it location, hours or type of employment.

Before the pandemic, only 26% of workers felt they could take advantage of flexible working arrangements. In 2021, employees feel more empowered, and that proportion has soared to 67%, according to the ADP Research Institute, with 47% of respondents saying their managers offer more flexibility than company policy. 

For payroll departments, increased flexibility and an influx of contract workers could lead to more complex calculations for working out pay, leave entitlements and other benefits and deductions.

The opportunity: This is the moment to go all-in on digital solutions that can help streamline and standardize payroll processes. Cloud-based payroll, for instance, allows payroll staff to access data wherever they are, while a configurable system offers the flexibility needed to manage a dynamic workforce. This is particularly important if you’re working with multiple payroll locations – different vendors and payroll systems in different countries means your employees are not getting the same experience, and your payroll staff then have to cope with queries and issues across multiple systems.

To help decrease complexity, document procedures for various employee engagements and ensure compliance controls are in place, informed by the applicable laws. Create a centralized location for employee and payroll data to make it quicker and easier to see an entire workforce in a single view. Use automation where possible to drive efficiency, such as when performing currency conversions or calculating deductions for a global workforce.

3. Evolving regulations and compliance requirements

Last year, because of the pandemic, many countries introduced stimulus packages and relief measures to prevent mass redundancies and unemployment. ADP teams reported a 380% increase in legal communications to process in just the first two months of the pandemic in March-April 2020. That included an additional 900 pieces of legislation on top of existing regulations. As a result, 51% of organizations with little or no payroll integration are not confident about being positively audited on payroll compliance.

Governments around the world also deferred regulatory changes related to taxes and wages. This year, many of those paused regulations will take effect, and some subsidies and relief programs will continue throughout 2021 as nations try to revitalize their economies. Keeping track of these changes is a major challenge for payroll departments.

The opportunity: Investing in both people and technology will pay dividends when it comes to managing ever-changing regulation and compliance requirements. Payroll vendors’ solutions should have built-in compliance checks. Compliance training and upskilling for payroll teams will also give these employees an added edge and make them feel more valued.

To help you understand and compare how the global pandemic has affected companies and employees, download People at Work 2021: A Global Workforce View here. To explore how well organizations are meeting the challenges as a result of the pandemic, download The Potential of Payroll: Global Payroll Survey 2021 here.

Based in New Zealand, Rina Diane Caballar is a freelance journalist. She has written for publications including the BBC, The Boston Globe and The Atlantic.

Bombardier is a global leader in the transportation industry, building airplanes and trains. With more than 30,000 employees in 45 countries, there was a need to have clearer, easier global reporting in one payroll system.

ADP started working with Bombardier in 2008 and currently serves about 95% of the company’s employees. It makes online payroll tools available to white-collar workers and blue-collar workers alike with ADP GlobalView Payroll.

One of the major ways payroll has changed at Bombardier is that payslips are now electronic. Anke Gentele, head of Global HR Data Governance and Integration, says this helps empower employees who aren’t in the office.

“But it wasn’t as simple as just plugging something in; we had to deal with security issues, enabling access to an employee portal with sensitive information from people’s home networks,” she says.

To ensure employees’ personal data remains secure, Bombardier’s IT security teams worked with payroll and ADP to set up multi-factor authentication (MFA) tools.

“ADP offered our data security officer direct contact with ADP teams to help work out the security challenges. We’re now in the process of rolling this out in several countries,” Gentele says. “It really feels like we’re all learning in this process.”

The process has garnered positive feedback from Bombardier’s employees.

“The first country was Australia, and we had really good employee feedback,” Gentele says. “We even had local unions request that we stop printing physical payslips, particularly from younger employee groups. This kind of digital service is just what they expect a modern company to provide.” 

When the pandemic hit in 2020, ADP stepped in to help Bombardier’s payroll adapt quickly to meet both office and factory employees’ needs.

“When Covid-19 happened, we had to have everything in the system to deal with the changes in legislation in all our different countries,” Ellis says. “We worked in partnership with ADP to look at the legislation, interpret and implement it.”

“We had employees adapting to working from home and lots of changes to payroll,” Gentele says. “Because of our existing work with ADP, we had the technical systems in place to cope with this amount of change. Despite everyone, including ADP, having to adapt to the ‘new normal,’ there was no drop in payroll accuracy. Our employees didn’t see anything different. For most people in the company, payroll is something that just happens, and the expectation is that it will continue to happen, even during something as big as Covid-19.”

Ellis says Bombardier’s biggest challenge was in France, where calculating furlough rates is more complex. 

“We had to choose how to do the calculation, and because ADP was solving this problem for a lot of clients in France, we could use their experience to make it work for Bombardier,” she says.

Gentele says the payroll work with ADP has allowed teams from different parts of the world to collaborate in new ways. 

“We’ve all learned from each other through this journey. For example, payroll teams from Australia have worked with teams from the Americas, and they’ve learned how to deal with certain issues. We’ve also established a super-user community where we have regular meetings, a forum on which we share global changes that should be known, and we also learn from country-specific topics,” she says. “As a company we have a reliable base and a reliable partner (in ADP), and this gives us the consistency and transparency that we require.” 

Gentele hopes this is the first step towards more unified HR systems for Bombardier. In the near future, she says, “I hope we can have a system where employees can access more services from one place, with a smoother experience.”

Adejoke Adeboyejo is a freelance writer and journalist based in Lagos, Nigeria. Having worked in human resources for more than 12 years, she now writes about the workplace, women’s issues and the environment.

Dow, a global leader in materials science, has more than 35,700 employees in 106 manufacturing sites in 31 countries. Electrochemical pioneer Herbert H. Dow founded the company in 1897 in Midland, Michigan, where its headquarters remain to this day.

Over the past 120 years, Dow has grown from being a one-product chemical company to a global science company, transforming through many innovations and acquisitions. ADP has been working with Dow for 14 years, supporting over 30,000 of their employees in 16 countries.

Before the pandemic, Dow wanted to make payroll analysis easier, but executives were aware that making any changes required buy-in from employees, especially when it came to payroll. 

“We’ve always run an awesome payroll service at Dow. We did it well when we did it in-house, and we do it well with ADP,” says Laurie Tremper, Dow’s Global Director of Payroll. “I take a lot of pride in making sure we do it without making a noise. People only notice payroll when it goes wrong, so we want to be as quiet as possible.” 

Processing that change began long before ADP’s solution went live. “We had just implemented a new global HCM (human capital management) system, and we were very familiar with what we needed to do for change management. But that piece was the biggest obstacle we had to overcome,” Tremper says.

The solution

With a workforce spread over 31 countries, Dow chose ADP GlobalView Payroll and Enterprise eTIME for its modern, digital approach to global timekeeping. Employees can access their pay information and record their work online, and payroll professionals can process pay more swiftly and consistently. At the end of 2020, Dow rolled out the payroll and time solution for its two largest markets: the United States and Canada. 

“When we went live with payroll, we also went live with Enterprise eTIME, which is really where the high-touch employee experience is, and where we focused on for our change management,” Tremper says. “Being on ADP GlobalView Payroll and Enterprise eTIME gives us lots of new opportunities.”

Advanced scheduling tools allow Dow to better manage employee attendance and time. Tremper hopes to integrate even more countries into the system, especially locations that still use manual timekeeping. “We already have eight countries on Enterprise eTIME, and a roadmap to move another 20 countries to the system,” she says.

“2020 was a challenging year for us, as it was for many companies, where overnight, we were all working from home,” Tremper says. And on top of the pandemic, a dam broke near the Dow headquarters, forcing 15,000 residents to temporarily relocate. “ADP’s accessibility to the systems, their business continuity, planning, and the overall support they provided really allowed us to continue to deliver absolutely seamless payroll, even through the pandemic.”

The future

The ability to access current, past and benchmark data across countries with the Global Insight Dashboard was a big draw for Dow, and the benefits keep emerging.

“We’ve never been able to analyze this payroll data before, so this first phase is really about discovering the stories that we can tell,” she says. “We are really excited to be where we are with ADP: the countries we’ve implemented, the plans for countries going forward. This is our year to showcase that this payroll and time data can really make an impact.” 

In the future, she hopes to use payroll data to shed light on Total Worker Health — how much employees are utilizing their holidays, health and rewards programs. If there are benefits not being utilized, can Dow redesign these benefits? When an employee says they’re stressed but aren’t taking vacation time, how can managers help improve their situation?

Analyzing their huge company repository of payroll data “will change the way that we work as a payroll team,” Tremper says. She also says the implementation has driven Dow to restructure its payroll team and grow their skill sets, including training specialists to work on the analytics from ADP GlobalView Payroll. “We’re much further along this journey today than we thought we’d be.”

“Using the data to improve the processes for other users of payroll data around the company has helped us improve as a team,” Tremper says. “We’re looking for opportunities to improve the team’s analysis skills. We will need more thinkers and analysts in the future.”

Adejoke Adeboyejo is a freelance writer and journalist based in Lagos, Nigeria. Having worked in human resources for more than 12 years, she now writes about the workplace, women’s issues and the environment.

The creation of writing in Mesopotamia was a momentous innovation, perhaps only comparable to the invention of the internet in the modern era. Both mediums transmitted messages in a way that humans had never before experienced. 

Before written communication, conveying information to another person had to take place verbally, face to face. With the invention of writing, humans created a way to inform, remember and communicate without the restrictions of time or place. The story of modern writing bloomed with the civilization of the Fertile Crescent, which was known for its expertise in the domestication of animals, agriculture, pottery and wheel making. The development of cuneiform in Mesopotamia, centered around what’s now Iraq, made possible the advances that followed in mathematics, astronomy, medicine and engineering. 

Cuneiform is recognizable by the wedge-shaped strokes created by pressing reeds into soft clay tablets, which were then hardened by heat. Thousands of cuneiform tablets have survived thousands of years, providing insight into the business world of ancient Mesopotamia: Many of the earliest examples of these ancient texts are records of workers and their wages. 

Payroll in cuneiform

As specialized trades emerged in Mesopotamia, merchants and farmers needed to hire people to work for them in exchange for a fee. And as anyone in payroll knows, recordkeeping is key. Temples at this time were not only the center of religious life but also of the local economy — temples handled tax collection, lent money and invested in real estate. Many cuneiform tablets from the third millennium B.C. include daily tallies and agreements between employers and workers, detailing the obligations and rights of both parties.

In this era, a laborer received payment in kind — working in exchange for a quantity of food, clothing, housing or a share of the agricultural or industrial yield — or payment in wages — in ancient Mesopotamia this was often in barley, though silver was later used to pay wages. We know from these ancient cuneiform tablets that the wages of workers varied based on the type of work they did. Ancient law regulated land rental prices, debt interest and wages for people working in specific trades. The Code of Hammurabi from around 1750 B.C. says, for example, that a ropemaker should be paid four gerahs (a small unit of silver) per day, and a tailor five gerahs per day.

The images below of two cuneiform tablets show the development of ancient payroll. The first from the Neo-Sumerian era, circa 2100–2000 B.C., transcribed by Wafaa Hadi Zwaid. This is a receipt that details the workers’ wages for a period of work. 

The text says that three gurush (free workers who were part of the temple economy) at two-thirds wages and 30 gurush workers at one-half wages were received from Abi-Tuni, the person responsible for managing workers. The date is recorded as “the year which Ibbi-Sin became king,” the first of his 24-year rule, around 2000 B.C. The seal, making the record official, is signed by a clerk under the authority of Shaat-Istar, the king’s daughter. 

Ancient Sumerians were among the first users of fractions, though the Mesopotamian numerical system was based on the number 60 rather than the number 10 as we use today. 

The second cuneiform tablet is from the city of Bekasi, circa 1700 B.C., during the Old Babylonian Empire. The cuneiform text, transcribed by Aram Jalal Hasan Al-Hamundi, reveals how the content and technique had developed in the meantime.

The front of the tablet says that A-pi-la-a–sin has hired Sin-magir from his father, Sa-mi-ia, for two months in exchange for a half gur of dates. (The gur was a standard unit of measurement at the time, equivalent to about 300 liters.) The back of the tablet explains that the dates would be weighed by i-bi Adad and lists the names of two witnesses to the contract. The date is written as the first day of the ninth month in the eighth year of Samsu-Iluna’s reign, and the left edge has i-bi Adad’s seal.

There are important advancements here: The stability of Mesopotamian society led to common units of measurement. King Samsu-Iluna, the son of Hammurabi, is believed to have instituted the standard Babylonian calendar during his reign, which started around 1750 B.C. Clay tablets explaining mathematics have been found dating back to this era, with explanations of algebra, quadratic equations and the Pythagorean theorem, before Pythagoras was even born. 

What it all means

Let’s rewind back to 7000 B.C., when an agricultural society was developing in northern Iraq, especially in the village of Jarmo, where some of the oldest pottery in the world has been found. An ancient farmer in this area wanted to document and calculate his crop yield and keep track of his goats and sheep. So he would collect small pebbles of similar shape and size in a leather bag to keep count, adding or removing a stone when he gained an animal or lost one.

Humans started to migrate south in the fifth millennium B.C., their settlements following the fertile plains of the Tigris and Euphrates rivers. As their accounting needs grew, they began to use shaped clay tokens to keep track of their crops or goods. A unit of oil was depicted by a conical piece of clay; wheat was depicted by an oval shape. Eventually the recording of these goods evolved from collecting tokens to pressing the according shape onto a clay tablet in a line. 

And that led to arithmetic tables — panels drawn on clay tablets, marking the shape of a commodity and drawing small lines to denote quantity. This was a major step toward the creation of writing. The combination of glyphs and accounting allowed ancient Sumerians to document computations and content. Around 3000 B.C., recording the names of people involved in the transactions led to the development of shapes that represented sounds. The seeds for what we now know as an alphabet were planted, as this proto-writing shifted from glyphs to syllables.

About half a million cuneiform tablets have survived to this day — preserved not by importance but by chance. The ancient Mesopotamians’ diligent recordkeeping allows us in the modern era to better understand their lives, and their experimentation in recordkeeping paved the way for all of the things we do today with words and numbers. And so we can assume that Sin-magir received his half gur of dates, and if he didn’t, i-bi Adad surely heard about it. 

Ali H.O. Bnayan is an archeologist specializing in cuneiform at the Iraq Museum in Baghdad. He studied archaeology at the University of Kufa in Iraq and previously worked at the Documentary Center for Najaf Heritage. He is currently working on a new project focused on reviving cuneiform and the Sumerian language.

Let’s go back to the early 20th century, a time where cash was king and most people worked in agriculture or manufacturing. Only a handful of individuals had access to a current bank account and personal checks. Most of the labor force was paid in weekly installments, most often according to the number of hours of manual labor they had put in.

But after World War I, we began to see early commercial use of computers. These devices encompassed punch-card electromechanical tabulators in the 1920s and 1930s, analog devices that emerged in the 1950s, and the widely adopted IBM 360 of the late 1960s. ADP began automating payroll processing using mainframes in 1957, and in 1962 leased its first computer, an IBM 1401, to handle payroll operations.

Today, making and receiving digital payments is as natural to us as breathing, and robotic process automation (RPA) is transforming payroll even further. But, as I documented with my colleagues, the idea of a cashless society first emerged in the U.S. during the mid-1950s with the adoption of computer technology in banking, and the concept was popularized in the press on both sides of the Atlantic in the late 1960s and early 1970s. The digitization of payroll was at the center of this evolution.

In the dawn of the automation age, accounting functions and payroll were usually among the first activities to be mechanized. Management perceived these tasks to be repetitive and the information collected crucial for decision-making. Regulatory changes for financial institutions in the mid-century also played a part. Savings banks, previously excluded from check clearing, were allowed to start offering current accounts. This opened up checking account capabilities to their many existing working- and middle-class customers. Not wanting to be left behind, commercial banks expanded services for companies and their employees.

For example, in 1929, Westminster Bank in England, today part of the NatWest Group, replaced handwritten passbooks with machine-prepared statements. In 1948, the Trustee Savings Bank of Belfast in Northern Ireland deployed a new system of mechanized accounting, which included electromechanical ledger posting machines. Women were hired in ever-larger numbers to operate these devices and perform the repetitive tasks required of payroll. (The word “computer” initially referred to a person who crunched numbers.)

It wasn’t until the 1950s that large and medium-sized Spanish banks began to introduce mechanical accounting machines. And in France, Crédit Industriel d’Alsace-Lorraine imported the first three IBM Proof 803 machines to Europe. These supplemented the mechanical devices already in place to keep track of cash-in-hand client accounts, and the interest to be paid for savings accounts. It expanded again in 1955 to the payroll and equity departments. In 1962, the Texas National Bank of Houston chose the NCR 315 computer system to expand their offer, which included a bureau service where companies could process payroll on the bank’s computer. That same year, the First Bank of Cincinnati chose a similar system to expedite its own payroll processing.

In Mexico, the federal government installed large computers in the mid-1960s, including an IBM 704 at the Mexican Social Security Institution and two CDC 604s at the finance ministry, to centralize the federal employee payroll. In 1965, the largest and oldest university, UNAM, began using an IBM 1400, and it soon shifted its use from technical and scientific computing to administrative tasks such as payroll and accounting. Anything resembling RPA was still decades away.

In a similar vein, the successful civil engineering firm Ingenieros Civiles Asociados installed an IBM 1130 in 1966, and shifted its use from engineering to administration, particularly cost accounting and payroll. However, programming the payroll application from scratch proved to be a challenge. The 1130 wasn’t able to process COBOL, a clunky programming language used for business applications, so the system had to be designed in FORTRAN, an older programming language primarily used for scientific applications. But FORTRAN used a floating-point arithmetic that wasn’t suited to accounting purposes. The programmers had to use adding and multiplying subroutines to ensure an accurate accounting record of pesos and cents.

After winning a major external engineering contract in 1968 to build the Mexico City subway, the firm ordered a larger CDC 3300 unit for an ambitious computer services business. Its first task was to handle the payroll of the 10,000 laborers and engineers involved in the construction of the first two lines of the Metro system.

Also during the 1960s, administrative automation started making it possible for employers to pay wages by bank transfer instead of in cash, and here, Sweden led the way. The decades following World War II were marked by economic growth, increased affluence and expansion of the welfare state in Sweden. Around 1959, Skandinaviska Banken invested in its first mainframe computer, and Svenska Handelsbanken and Sparbankernas Bank followed suit two years later. These computers were initially used to handle the time-consuming task of calculating interest on savings accounts. 

This problem grew as more people got direct payroll payments and opened current accounts alongside savings accounts, increasing the number of transactions the banks had to handle. Handelsbanken and other commercial banks convinced their contacts at manufacturers to sign up their companies for direct payroll deposit services. Initially hesitant, the Swedish saving banks followed suit, using their contacts with labor unions to help convince individuals to opt for direct-to-account payment at their savings bank.

For these direct-to-account payments, banks required employers to provide the relevant information via punched cards, paper tape and eventually magnetic tapes. These were prepared on-site and then taken physically and securely to the bank’s computer centre. It also created a larger banking ecosystem, as we saw happen in the Netherlands. Large companies and the Dutch government identified an opportunity to save money on the labor-intensive and expensive weekly or monthly payroll exercise. Banks were interested because the Nordic countries had found that direct-deposit salary payments had a positive effect on account holders’ average bank balances. In 1966, the banking sector introduced current accounts for private households after the Dutch government developed a system for standing orders and direct debits. 

Digitizing payroll took more than just installing a new computer, though; it required a reshaped regulatory landscape. In the U.K., legislation from the end of the 19th and start of the 20th centuries required payroll to be paid out in cash — this was intended to stop abusive practices by employers such as only offering coupons good at the company store. After a decade of lobbying in Parliament, direct payroll services in the U.K. were born in 1958 after regulatory changes allowed clearing banks to offer payment by checks or bank credit to any worker who wanted it.

The rapidly rising number of direct payroll accounts created its own issues. For instance, the number of accounts in the Netherlands receiving direct payroll payments grew from 165,000 in 1968 to 1.3 million in 1973. And digitizing payroll had only solved one part of the journey: People still had to pay for everyday purchases in cash. Customer congestion at branches became a problem, particularly on payday. To address these issues, a number of banking innovations happened in the 1970s and 1980s to move money out of accounts electronically, like the debit card and the cash machine: But I’ll cover this story in the next edition of the ADP ReThink Quarterly. 

Dr. Bernardo Bátiz Lazo is Professor of FinTech History and Global Trade at Northumbria University in Newcastle upon Tyne, UK. He is a fellow of the Royal Historical Society and the Academy of Social Sciences. He read economics and history and received a doctorate in business administration from the Alliance Manchester Business School. He joined Northumbria after appointments at Bangor, Leicester, Open University and Queen’s Belfast.