The short answer to this question is no.
And so is the long answer.
You will always need to have some kind of in-house payroll team, for at least two reasons:
- As long as your business exists, someone will have to run payroll
- And no just anyone can do that; it's a very specialized field
But while in-house payroll teams aren’t going extinct, certain changes within the world of work are having an impact on payroll, and companies have an imperative to keep pace with these changes, both for their own good and their employees.
Change #1 - SaaS and BPaaS together are making payroll more efficient and more accurate
The technology behind payroll has evolved dramatically, especially within the last decade as SaaS solutions like Workday have displaced legacy solutions for many companies. After all, why would you stick with a patchwork of disparate and dated solutions when you can have a single source of truth based in the cloud?
This question only becomes more urgent in a world where many employees are more likely to be working remotely than from a shared office five days a week.
Adding BPaaS to the mix makes an even greater impact. Now you can offload many of your most routine, time consuming, and—let’s be honest—boring business tasks to a partner who can work seamlessly alongside you, leveraging automation and other tools to do that work faster and often more accurately.
But the addition of BPaaS to your toolset doesn’t make your in-house team obsolete. Instead, it creates opportunities for these employees to finally focus on work that adds more value and is more satisfying on a professional level.
And that leads us to the second big change.
Change #2 – The Great Resignation is proof that employees are hungry for meaningful work—and they’ll leave if you’re not providing it
According to the McKinsey & Company consulting firm, when people feel connected to their work, their performance improves by as much as 33%.
Other metrics improve as well.
Employees who feel that their work is meaningful are 75% more committed to the company they work for and are 49% less likely to leave.
Unfortunately, only 50% of employees feel that their work is meaningful.
That’s not the worst number—but it’s not the best either. And when you consider the degree to which burnout has fueled the Great Resignation, you end up with a pretty clear picture: If you can’t provide meaningful work for your employees, they’re not going to stay with you.
It’s incumbent on leaders to realize that this is just as true for payroll as it is for other departments.
Tracking and managing payroll is a critical part of the job—but it doesn’t have to be the whole job. Regardless of whether your payroll team reports to finance or HR, there are other things those employees could be doing to add value to your company. You don’t want risk losing their specialized knowledge because of old ideas of what a payroll job is supposed to look like.
By changing your mindset and investing in the right tools, you’re paving the way for more engagement and more meaningful work. Read our white paper to learn how leveraging a partner can empower payroll to focus on more valuable initiatives.
Are you asking the right questions?
If you’re wondering whether in-house payroll teams are going extinct, you’re asking the wrong question. You will always need an in-house payroll team, even if the size of that team fluctuates with your business.
The more important question is: How do I make sure my payroll team is equipped to add more value and feel more engaged in their work?
The answer to this question will look different for every business. Maybe you just need a little help or maybe you want a more comprehensive solution. OneSource Virtual offers scalable payroll solutions for Workday to match these different needs.
Explore our HCM services to learn more about what we offer or reach out to us with your questions.