Shift to Paperless Payroll Systems

Chapter 1: Introduction

1.1 Background of the Research

Despite the continued popularity of using paper in the working environment, advancements made in technology in the UK has inspired many UK organizations to shift their attention towards paperless processes. In order to help organizations to become green-friendly, UK government have proposed various initiatives in order to easily access documentation and save storage space in offices (Bradwell, 2005). Paperless payroll refers to those systems which replace paper-based manual process by effective and efficient electronic methods. When a company makes a decision to change to a paperless environment it should help increase the effectiveness of the organization, employees and reduce its impact on the environment (Brooks, 2014). A paperless office can help improve efficiency, for example; an individual employee can manage a larger number of personnel records, which is difficult in the case of the traditional paper recording system (Gupta, 2015). Going paperless gives various other advantages, including possible significant cost savings, improves the speed for providing information and helps offer higher flexibility in accessibility of data by keeping material held on the internet. Paperless payroll helps the employees to access their information online in an easier manner (Sellen & Harper, 2002). In addition to that, a paperless solution also reduces the influx of hard copy documents and adds another layer of security. Using digital collaboration tools not only contributes towards the reduction of paper in office but helps make it easier to share knowledge and circulation of the information (Orantes-Jimenez & et.al., 2015).

1.2 Rationale of the Research

Paperless payroll is a term which explains ways through which whole payroll could be processed without the usage or generation of paper. Online payroll system helps all kinds of business firms to make their process totally paperless. Paperless payroll can not only record employee’s time electronically but can also perform all the paper work electronically. It is highly beneficial for the business to work effectively. However, there is various organizations who haven’t employed this system due to lack of its impact. Thus, this study will be helpful for that organization who hasn’t implemented paperless payroll system as this paper will investigate the impact of the paperless payroll department on the efficiency of the business. It will also assess the approval level of employees for the introduction of a paperless payroll, and investigate the benefits of an electronic process. Moreover, this research will be reviewing potential challenges related to introducing an online pay slip so it will also analyze what other changes will be needed to the payroll system. This research will also be beneficial for that researcher who will be making their study on similar topics.

1.3 Aim of the Research

The main aim of this research study is to investigate the impact of a paperless payroll department on business efficiency with specific reference to SPIE UK.

1.4 The objective of the Research

The objectives of this research study are explained below:

To review the current payroll system and the challenges faced by Spie UK.

To find out the level of employees’ approval for the introduction of paperless payroll in the organization before the completion of the installation.

To investigate the effectiveness of an integrated HR and Payroll platform in the organization through cost-benefit analysis.

To investigate the barriers to delivering online payslips, P45s, P11Ds to the organization.

To identify the impact of General Data Protection Rule (GDPR) changes on the payroll department.

1.5 The question of the Research

The main questions of this research study are as follows:

What is the impact of the paperless payroll department on business efficiency?

What are the challenges associated with the current payroll system and how it limits the organization in achieving its business objectives?

How can the organization promote employee engagement in the change process?

Chapter 2: Literature Review

2.1. What is Paperless Payroll System?

Paperless Payroll is a payroll that is replacing manual along with paper based processes with the effectiveness of electronics. The main intention of paperless payroll is to save time and cut cost and go green. Paperless Payroll system is about enjoying special benefit which includes automating time along with attendance tracking. Automatic integration of the system in the payroll processing effectively manages workforce management. It is noted by Ceridian Corporation (2014) employee receiving two paystubs in a month would save about 1.8 pound in a year if switched to electronic modes. Business selecting automate payroll attains effectiveness as it reduces time spent by the administrative task by 40% as an average. Paperless Payroll System benefits the environment as it helps in terms of greenhouse effect and maintaining atmosphere. In the words of Ceridian Corporation (2014) paperless payroll is about processing the entire payroll without generating any paper thus payroll of data is at a place. According to Relyco Sales, Inc (2018) the paradigm shift from manual to electronic document creation along with acceleration of technologies is converting paper documents into industry standard PDF. The paperless payroll system is about managing payrolls through electronic records so that the communication of information is effective.

2.2. Historic Development of Paperless System in the UK

The aspect of the paperless system is about developing an office without any paper documents with the utilization of various integrated information systems. The historic development is based upon the intention to create an environment without papers to increase the productiveness (Chao, 2015). The historic development is due to the fact that in the last decade’s issues were faced regarding climate change. Use of papers leads to environmental issues and deforestation thus for the sustainability of the world environment paperless system was gaining relevance. The intention to contribute for the sustainability of environment led to reducing carbon footprints and preserving wildlife habitats. Thus the historic development of the paperless system in UK is due to ensuring environmental sustainability. It is noted by World Economic Forum (2017) that a small business uses about 32,000 reams of paper in a month thus impacting the environment. Increase in the paper work affected the business and its accounting process. Thus paperless system was developed in the UK to automate the process of accounting and increase the level of effectiveness. A business environment which is paperless might reduce the usage of paper and lead to rapidness in the approach of business strategy. The historic aspect was to speed up the process of trade and increase the interconnectivity as stated by Carr (2005).

2.3. Functionality of Paperless System

The business environment is changing and global workplace is becoming more intensive. The nature of work is changing and works requires more speed and meet customer demands. The working environment which is paperless is more effective as the documents are recorded through electronic modes and the flow of work is automated (Carr, 2005). The functionality of the paperless system is that documents are being managed through electronic mode and the database is effective of sharing at a rapid pace. The process of management, creation along with distribution maintenance owing to the paperless system is more effective. In the present complex business scenario several operations are being processed to attain relevant operations. The workflow software tools are effective as it manages the flow of work and documents through effective business process. The functionality is based upon the aspect to attain an effective business environment which ensures correct documentation records which is paperless. According to the views of Dhumne (2017) electronic workflow leads to process control that is effective in coordinating activities and monitor information without chaos. The paperless system is effective as it improves the flow of work by improving the tracking and tracing dynamics in the document life cycle. Another aspect of the functionality paperless business environment is based upon enabling technologies. Before the use of automation services information were converted from paper to digital information and then processed. This increased the risk and time factor therefore paperless system made the process easier and effective (Ejiofor & Mgbeafuluike, 2017).

Furthermore, it is determined from the analysis by Ejiofor & Mgbeafuluike (2017) that paperless system is environment friendly and it reduces the cost. The workplace which s paperless saves money and protects the environment as large offices rooms filled with files would create waste. The functionality to convert into paperless system would create opportunity and increase process efficiency inters of analyzing and identifying flaws. Electronic businesses are improved and are free from manual risks. The paperless systems are effective as it is free from physical space and reduces expenses. In the opinion of Dhumne (2017) the chances of losing documents in the electronic mode is less in comparison to the manual files which might be misplaced. This leads to process efficiency and enhances the process of management. It is vital to note that functionality of paperless system is based upon the fact that leads to resource efficiency. Automated workflow eliminates the repetitiveness and improves the productivity that leads to profitability along with cost savings. Standardization is vital thus consolidation of forms and documents leads to greater effectiveness. The business environment is changing due to various reasons it is noted that the paper used in a year by a firm leads to high pollution thus affected the greenhouse effect as noted by Ejiofor & Mgbeafuluike (2017). Thus to safeguard the environment and reduce pollution level paperless system is being used. This has increased the level of effectiveness through proper sharing and collaboration of data through proper networking without much risk of mishandling of data. The idea of paperless system is to increase market efficiency by meeting the customer queries through the use of automated data. The information delivery is faster as the data are well managed and documented so that the automate workflow is evident without much disruptions. In the views of NCB (2017) going paperless is not only about eliminating papers but also saving money that boost productivity and at the same time creates an ecofriendly office. The functionality is based upon increasing the level of security, speed and accuracy without increasing the physical space. There are many aspects that lead to paperless system one of it is the environmental factors and the other aspect is the risk that was faced with manual data. Conversion into paperless system will help to increase the capital management and eliminate the hassle that is experienced during manual documentation. The functionality is based upon the aspects of reliability, security, affordability, confidentiality along with environmental friendliness. The need to go paperless in UK is to increase the process of search and augments business functionality (Hattingh, 2001). The intention is to be quick and relevant so that the decision making process is efficient.

2.4 What is the Benefits Associated with Paperless Payroll System?

There are various benefits for organizations for going paperless.

2.4.1 Environment Friendly

Paperless system minimizes the utilization of paper and save money for organization, therefore making tangible contribution towards safeguarding the environment. Through paperless system, organizations can save space as the large storage rooms occupied with files can be eliminated. According to Hattingh (2001), the influence of business on the environment is much prominent in present days. Every organization is presently looking to minimize the carbon footprint for satisfying the environmental target and for promoting the company as eco-friendly. Turning into paperless system is an important way to accomplish this target.

2.4.2 Process Effectiveness

Transforming paper based to paperless system gives the prospect of evaluating and recognizing mistakes in manual procedure for applying enhanced electronic business procedures and also for initiating new business systems (Sharma, 2000). According to Murthy (2013), one advantage of moving into paperless system is increased operational effectiveness. Important information, such as pays lips and invoices can simply be obtained from any electronic devices within short time. Furthermore, employees in paperless system can access self-service portal and obtain up to date information. By utilizing a centralized and cloud oriented system for payroll and HR management, managers can make real time changes to employee data, while certifying information safety.

Baines (2007) stated that electronic workflow has built in control devices, such as automated activities, automated notifications and audit trial, which help to measure the processing time and generate quality output. The automated paperless system permits tracking against pre-described instructions. It gives better control over the documents, ensures updating and circulation of information and hence give more accurate information than manual information processing. This culminates enhanced effectiveness and better quality (Bradwell, 2005).

2.4.3 Resource Effectiveness

Paperless system eradicates the repetitive managerial activities and enhances the productivity by permitting employees to focus on more intellectual tasks on the way. Increase in productivity and resource effectiveness lead to more profitability and cost saving, while controlling high workload (Mullin, 2001). According to Chao (2015), productivity can be significantly reduced when working with paper. Searching for files and documents wastes considerable time every day. In the payroll division, such can be heightened by paper based system. An overabundance of paperwork can make it hard to find documents rapidly, hence resulting delays and wastage of time. By transforming the payroll divisions into completely paperless with digital environment, documents can be found with few clicks with no time, hence saving time and money and making the employees much productive (Sandhu & Seth, 2014).

2.4.4 Safety and Confidentiality

Paperless system for administering employee information certifies that the functions of business are GDPR compliant, with sufficient safety in position to protect the confidentiality of information. Automatic backup in paperless system signifies that the company will not lose any important file. Furthermore, cloud oriented system permits to manage the authorized person for accessing private information. For audit purposes, it is simple to develop tailored reporting of information as well. Therefore, paperless system can provide actual time access to employee information and payroll (Brooks, 2016). In accordance with Ryan (2008), digital pay stubs are supported by security systems and practices that simply do not exists in paper stubs. In this system, employees will no longer require to have concern regarding who has managed their pay stubs or who may have accessed their file.

2.4.5 Future Proof

It cannot be denied that the future world is digital and businesses are the forefront of becoming digital. By switching to paperless payroll system now, organizations can certify that they will able to compete effectively for years by future proofing the business in the growingly competitive environment. According to Orantes-Jiménez & Et. Al., (2015), digitization is about organizations performing more effectively and competitively at present and in future. There would be technological disruption for going paperless, in which innovation replaces the existing methods of functioning. Paperless payroll will increase the demand for new abilities and techniques for future of work. Through implementing paperless system, organizations are able to better prepare themselves for the changes in work, which can eventually eliminate most of paper reliance activities.

2.4.6 E-taxation

E-taxation comprises filing of payroll taxation online with IRS. For organizations with IRS information returns or statements, electronic filing of different forms is required with Social Security Administration, and paper filing of return when e-filing is essential can subject companies to fines. According to Behl (2017), States are putting growing focus on electronic reporting options for Forms and unemployment insurance returns. Through moving into paperless payroll system, organizations can save payroll, taxation, employee benefits, applicant records and EEO-1 data online. Electronic storage of Forms requires complying with USCIS requirements, making paper based payroll information storage needless.

2.5 Problems Associated with Paperless Payroll System

There are many problems and challenges that can be faced by organizations for moving into paperless payroll system.

2.5.1 High Investment

Transitioning into paperless payroll system will require changing the usual business procedure. The shift to paperless payroll system will generate additional expenses and time. There is certain initial investment that an organization is requiring making for implementing paperless system. Furthermore, the organization must be ready for learning as it transforms to electronic payroll option.

2.5.2 Threat of Information Security and Safety

In case of paperless payroll system in the organization, the management is liable for securing the vital information. There is a need to ensure that the computer system is safe with up to date software and strong virus protection application with firewall protected device. There is always information security threat from hackers in paperless payroll system. Unlike paper based system where information is stored in paper and secured in locker or cabinets, in paperless system, information is stored digitally and secured through password protected system. Any kind of carelessness can make it simpler for hackers to install spyware, to steal information and to capture vital organizational information (Smith & Lasher, 2008). Therefore, it is important for the organizations using paperless payroll to update the software and virus definitions constantly and not to fall for phishing websites or installation of harmful applications in the computer system.

2.5.3 Pay Card Fees

Paperless payroll system necessitates employees to have a bank account in order to obtain direct deposit of their salary. If employees do not have bank account, then the States do not allow providing direct deposit as only form of payment. Although the unbanked employees can be paid through pay card, many States have certain regulation on using it. Furthermore, there are certain amounts of fees which are charged against the pay cards and hence minimize employees’ earnings.

2.5.4 Paystub Regulations

Even when switching to paperless payroll system, organizations require maintaining paystub printing option under certain State regulations. Also, organizations functioning in multiple States require complying with different regulations and maintaining hard copies of records and transactions at officials’ requests (Smith, 2009). Depending on the State and the employees, organizations may also require sending paper based paychecks to certain employees (Smith, 2009).

2.5.5 Hardware and Software Problems

When information is stored only electronically in paperless system, there is possible threat that the system can crash and some vital information can be lost. Therefore, there is a need to ensure that the electronic information is backed up frequently in order to recover the vital information rapidly when system crashes. Furthermore, paperless system can create interruption in work procedure during the time of electricity outrage or problem in internet server (Colbert, 2015). On such conditions, organizations require to have contingency or alternate system to access electronic information even during the event of power or internet connectivity failure.

2.6 Conceptual Framework

The conceptual framework for the research is demonstrated in the following figure.

Chapter 3: Research Methodology

3.1 Introduction

The above mentioned section has explained regarding the impact of a paperless payroll department on business efficiency. In this regard, this chapter will describe in detail regarding research strategy, research design, research approach, sampling strategy, research strategy and research philosophy. Moreover, this section will also have data collection methods techniques and data analysis which has been used in order so as to collect the appropriate data and also allocate the objective of the research.

3.2 Research Philosophy

Since, the aim of this research is to investigate the impact of a paperless payroll department on business efficiency which is based on the subjective approach so the researcher will give focus on Interpretive philosophy. This philosophy will make the assumption that social reality is not objective and is shaped by human experience. In this research, interpretive philosophy will be evaluating the experience of employees and will also get access to the reality of business efficiency. The researcher will act as a social actor and investigate the efficiency of business after applying paperless payroll.

3.3 Research Method

Since, the aim of study is to investigate the impact of a paperless payroll department on business efficiency where data are secondary and subjective in nature so qualitative research approach has been considered. This research will make the usage of the naturalistic inquiry to review the in-depth understanding regarding the impact of paperless payroll department on efficiency. Since, the researcher makes the usage of qualitative research so it will rely on direct experience of the employees of SPIE, UK.

3.4 Data Collection

In this particular study, since the aim of the research is to investigate the impact of a paperless payroll department on business efficiency of SPIE UK so the primary data will be collected with the help of questionnaire survey and interview wherein employees and owner of SPIE company will be involved and secondary data will be collected through legal journals, articles and websites.

3.5 Research strategy

Research strategy are of different form such as case study, survey, interviews and experimental research. This research study will make the usage of the interview in order to investigate the impact of a paperless payroll department on business efficiency in SPIE, UK and also bring about the solution to it. This research study will interview the employees of human resource and finance departments of SPIE company where they will be asked regarding the research question which has given its more emphasis on impact of paperless payroll in an organisation.

3.6 Research Approach

This research study will make the usage of inductive approach to analyse the impact of paperless payroll in an organisation. This approach will start by observation and proposing the theory by the end of the research process after the result of observations. This approach will generate the meaning from the collected data and is also based on learning from experiences. Thus, this research will also analyse the experience of the employees and will build up a theory.

3.7 Interview Questions

This interview will collect information from administration and employees of SPIE company through self-administered structured questionnaires and the management of SPIE company will be interviewed within brief schedules. The number of question asked with each of the respondents will be 10 and sampling technique will be random sampling technique. This interview will be conducted by means of face-to-face interactions wherein the researcher will personally meet the participants and make the process to continue. If the respondents will not be able to have direct face-to-face communication, then researchers will either take the interview over audio or video call. This research will comprise of 7 questions which will give its major focus on topics related to impact of paperless payroll in an organisation. Each of the participants will be given maximum of 30 minutes in the process of interview so as to understand their views regarding the research topic.

3.8 Data Analysis

Data analysis is the analysis process which contributes in acknowledging the gathered data in a better manner by making the usage of different sources so as to achieve growth and effectiveness (Boyce & Neale, 2006). This research study will collect both primary and secondary data related to impact of a paperless payroll department on business efficiency. The primary data will be analysed with the help of thematic data analysis and the secondary data will be analysed with the help of content analysis method.

3.9 Research limitation

This research study has been utilized to perform different steps so as to attain effectiveness in a greater manner. However, there are plenty of challenges and problems which are faced by the researcher while doing the study of the research. The limitation which is achieved in this research study is the size of the sample as researcher could take fewer samples due to time constraints. Paid sources are one of the bigger limitation in which the researchers had to pay lots of money in order to collect the information in relation with the research study. It is very difficult for the researcher to provide huge amount of money in achieving information regarding the research study and hence, researchers limit its research and thus, quality of the research paper deteriorates.

3.10 Ethical Consideration

Ethical consideration is an essential parts of the research study. Dissertation would have achieved failure if the researcher is not able to apply the ethical consideration in their research. This research has applied ethics wherein the participants of the research are behaved in ethical manner while conducting research and proper care is kept to respect their dignity of the research participants (Boyce & Neale, 2006). Moreover, participant’s privacy is given higher focus and adequate level of confidentiality is ensured regarding the data of the research study. This research has also given true as well as valid research data in order to make the research study valid and reliable. Furthermore, participants are communicated in an effective manner. The interviewer has also asked only those question with the participants which was related to the research study and none of the question were personal or related to their organisation secrets. In addition to that, the secondary data are also collected from academic sources where no plagiarism had been performed.

References

Baines, A., 2007. End the paper chase. Work Study, Vol. 46, No. 1, pp. 25–26.

Carr, M.R., 2005. An analysis of the feasibility of a paperless environment - The case of the Mona School of Business. Management and environmental quality an international journal, Vol. 16, No. 4, pp. 286-290.

Chao, C., 2015. Implementing a Paperless System for Small and Medium-Sized Businesses (SMBs). Applied Information Management Program, pp. 1-56.

Dhumne, K.M., 2017. Paperless Society in Digital Era. International Journal of Library and Information Studies, Vol. 7, No. 4, pp. 1-3.

Ejiofor, C.I. & Mgbeafuluike, I.J., 2017. A Fuzzy Based Paperless Office (FBPO) Model facilitating Paperless Office. Journal of Computer Engineering, Vol. 19, Iss. 5, pp. 19-22.

Hattingh, M., 2001. The features and impact of the paperless office, with specific reference to the City of Johannesburg. South African Journal Of Information Management, Vol. 3, pp. 1-14.

Hattingh, M., 2001. The features and impact of the paperless office, with specific reference to the City of Johannesburg. South African Journal of Information Management, Vol. 3, No. ¾, pp. 1-14.

Mullin, T., 2001. The paper chase: deploying enterprise information management in today's print-oriented world. Enterprise Systems, Vol. 2, pp. 18–21.

Murthy, M. S. N., 2013. Paperless Organisation. Asia Pacific Journal of Marketing & Management Review, Vol. 2, No. 9, pp. 87-97.

Orantes-Jiménez, S. & Et. Al., 2015. Paperless Office: a new proposal for organizations. Systemics, Cybernetics and Informatics, Vol. 13, No. 3, pp. 47-55.

Ryan, J. T., 2008. Document-Management Systems Offer Efficiency, Save Paper. Central Penn Business Journal, pp. 1-2.

Sandhu, U. & Seth, R., 2014. Paperless Office: A New Name to Technology. International Journal of Management & Business Studies, Vol. 4, No. 2, pp. 34-36.

Sharma, P., 2000. E-transformation basics: key to the new economy. Strategy & Leadership, Vol. 28, No. 4, pp. 27–31.

World Economic Forum, 2017. Paperless Trading: How Does It Impact the Trade System? White Paper, pp. 2-18.