HR and Global Payroll trends for 2023

What will be the trends in global payroll and HR in 2023?

Payroll trends? Payroll processes have a reputation for being boring, and to many, just the idea of having trends can sound absurd. However, it is time to reconsider that attitude.

Changing work ecosystems and the growth of gig economy sectors have added more complexity to how employees want to receive compensation, something that with constant legislative changes has already been quite complicated.

Whether you're a payroll or human resources professional, staying on top of these trends is essential to ensuring your organization is future-proof. So, let's dive into the five trends for Global Payroll and HR for 2023:

1) Payment on demand or real time:

This salary payment method allows employees to receive their salaries as they are earned. Typically, companies allow employees to only access a certain percentage of their salary per pay period, while the rest is paid as usual on payday.

Salary payments tend to be monthly generally throughout the world. However, the employees could argue that the employer is building debt on them daily for the entire month, and if that is the case, where is the interest rate? Society has simply never had the proper framework for paying employees on a daily rate or in real time. In recent years, the rise of temporary and freelance hiring has begun to cause a change in old ways of thinking. However, moving to daily or real-time payroll presents a challenge for companies.

There are several solutions to handle on-demand pay based on when and how employees withdraw funds. Both parties, the employer and the workers, will undoubtedly have different opinions on how this mode of payment should work. It would be better if you balanced the needs of both parties as fairly as possible.

Pay on demand gives employees access to a limited amount of money between paychecks to cover unpredictable or urgent expenses. It gives them a sense of financial stability and security, allowing them to focus on work.

2) Artificial intelligence and process automation: The adoption of new related technologies, including Computer Vision, Cognitive Automation and Machine Learning for Robotic Process Automation in payroll solutions is trending. This convergence of technologies produces automation capabilities that dramatically increase business value and competitive advantages for companies. AI gives HR departments the ability to improve the employee experience by automating low-value and repetitive tasks, freeing up time for the department's strategic and creative work. Examples of use of AI in human resources; Analyze work absenteeism, Design training plans, Self-help chats, Validation and review of data, etc.

3) Increase in cloud technology to store data securely: In the digital age, data security is more important than ever. Companies need to ensure that their payroll systems and processes are secure. This means investing in security measures like encryption, strong authentication protocols, and robust data recovery plans. A security breach can damage a company's reputation and have costly legal consequences. To protect against these threats, companies can educate employees on the importance of using strong passwords to prevent attacks and invest in technology. Outsourcing payroll services can also provide an additional layer of security if the service provider has the necessary measures, such as ISO 27001 certification in Information Security Management.

4) Pay salaries in Cryptocurrencies: Cryptocurrencies, especially Bitcoin, are getting closer to widespread adoption, and there are already large companies that allow their employees to receive part of their compensation in cryptocurrencies. Among the personalities that have opted for this modality are NBA players, the mayors of New York or Miami, or Mesi himself. Getting paid in bitcoins is going into fashion. But is it legal to receive the salary in cryptocurrencies?

In Spain, the Workers' Statute limits the possibilities of using cryptoactives to pay the payroll. Thus, the digital reality once again is ahead of the regulatory reality, which was foreseen for a static and perhaps analogical vision of labor relations.

The short answer is no, since cryptocurrencies in Spain are not considered legal tender (article 29.4 of the Workers' Statute), but bitcoins can be delivered as salary in kind as long as it does not exceed 30% of gross salary.

5) Increased use of employee portal: Many payroll departments are already using employee self-service portals, which allow employees to view and update their personal and payroll information online. This trend is likely to continue in 2023 as it can save time and reduce the workload for payroll departments. Employee self-service portals can also improve accuracy and reduce the risk of errors as employees can review and correct their information.

In conclusion, the HR and payroll industry will see some significant changes in 2023, with increased use of cloud technology, increased use of the employee portal, and AI-powered applications with a greater focus on security data and legal compliance. We will also see more and more companies offer payment on demand and even partial payments in cryptocurrencies. These trends are already underway and are expected to accelerate next year. Companies that want to remain competitive must adapt and invest in the right tools and systems to support their payroll operations to ensure a successful experience for their employees.