Payroll System Innovation: Yesterday, Today and Tomorrow

February 6, 2020      By Patrick Coia

Ultimate Takeaway
  • Maintaining balance between innovation and reliability is crucial, particularly when it comes to high-risk areas like payroll. Here's how we do it.
  • Our philosophy is to maintain and improve upon the well-established tools our customers trust while seeking exciting new ways we can drive increased business value.
  • The key to driving innovation while retaining stability and consistency is also rooted in our ability to provide configurability wherever possible.

Recently, I co-presented a webinar to prospective customers about the “Evolution and the Future of Payroll.” This was a very exciting event and I was very happy to participate. Afterwards, I had two thoughts. The first was appreciating how cool it is that we get to talk about and implement these emerging new technologies that make our customers’ lives better and easier. And the second was a firm reminder that we can never forget about the core functional needs of our payroll system customers.

Should payroll systems be innovative?

This is the easier part of the equation, by far. We focus on innovation because it allows our customers in the payroll (and HCM as whole) world to do things faster, finds things easier, and do incredible new things they could not do before. To elaborate on this, I’ll briefly mention a few topics from the webinar:

  • Artificial Intelligence: AI can boost profitability, aid with error prevention, help prevent fraud
  • Predictive Analytics: Build business model forecasts 
  • Prescriptive Analytics: Recommend actions to eliminate a problem or take advantage of a future opportunity
  • Financial Wellness: Provide employees with information and options to help them manage their life
  • Pay Equity: Transparency to illuminate potential wage discrimination 
  • Serviceability: System-level recognition and identification of underlying issues, with potential for self-healing

It is almost certain that our entire HR/payroll customer base would readily receive and make use of these features to varying levels. We are even seeing that government institutions are streamlining their models to accept more advanced methods of receiving payroll data from companies.

Keeping our customers’ needs at the forefront of innovation

Innovation and all the features it brings will make payroll/HCM better and more efficient, and we expect these innovations to be widely accepted. But we also recognize that, when it comes to payroll systems, there can be a higher level of skepticism towards “brand new.”

I have 27 years of experience in the industry, five of which were spent working as a payroll manager for a company with 10,000+ employees in more than 30 states. I also worked as a systems consultant before coming to Ultimate Software 20 years ago and working on product development. I know firsthand the mindset of managing payroll systems and the constant push to be perfect. For payroll professionals, this means every employee is paid perfectly every time, and every tax, benefit, or other payment reaches the appropriate jurisdiction, vendor, or organization on time and 100% accurate. And for being perfect, there is no celebration, not much of a thank-you, simply silence — which is music to the ears.

Payroll perfection is the most important thing every day, every week, every year. Thus, it makes sense that the mindset for some—possibly many—payroll professionals is a bit more cautious, not wanting to risk anything that could jeopardize a “clean” run of payroll each processing cycle.

Balancing trust, reliability, and innovation with payroll systems

With this in mind, it can paint a picture of tried-and-true vs. innovation. In the skeptics’ mind, too much focus on innovation could potentially overshadow the stability, reliability and accuracy that is critical to payroll system success (even though the goal of innovation is to improve upon these very same things).

So what is our responsibility as a partner? Everything.

We need to be innovative and we need to be a rock of stability at the same time. The key to this is prioritizing trust with payroll professionals, who may not typically be early adopters. This is done by consistently delivering what is expected (calculating checks, for example) while layering in new innovations that compliment, but do not necessarily replace, features that our customers trust and rely on.

The key to driving innovation while retaining stability and consistency is rooted in our ability to provide configurability wherever possible. This allows us to address the varying needs of our customer base while providing our customers with more control over their adoption rates.

Our product development philosophy

The life of product development is about balance, or juggling, as some prefer to say. There are times when requests come in that directly conflict with each other, but we need to figure out how to provide both. As we think about the innovation aspects that excite us, and rightfully so, we also realize the importance of prioritizing what got us here. It’s a balance of maintaining and improving the well-established tools our customers trust while finding exciting new ways we can help our customer do more, have more, see more.


With so much at stake when it comes to payroll performance, it’s time to take a good look at your payroll providers’ long-term plan. Watch for the four signs it’s time to upgrade your payroll system, or learn how UltiPro’s payroll solution can keep you (and your people) at the forefront of both reliability and innovation.

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2 Comments

  1. Avatar Mike Heins on March 15, 2020 at 8:22 am

    I recently hired an outsourcing company to manage payroll for my startup firm. It’s been great experience. Thanks for this amazing post.

    • Karina Schultheis Karina Schultheis on March 16, 2020 at 1:55 pm

      Fantastic, Mike! So glad you had a great experience and thank you for reading!

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