FORMATIVE ASSESSMENT $1[100$ MARKS$]$

Read the article below and answer ALL the questions that follow

Staying on top: How payroll can become less complex and lead management decisions

As legislation and compliance compound the complexities around HR and payroll for practitioners, technology is creating

opportunities to make HR processes simpler and more authoritative in decision$-$making.

Recent research of more than $1000$ small and medium enterprises revealed that $93\%$ of small and medium enterprises in

South Africa say recruitment and resourcing should be at the heart of growth over the next five years.

But there are at least three reasons why the tide is beginning to turn, highlighting the critical role that technology, HR and

payroll will play in taking a business to the next level.

Getting to grips with complexity

The HR and payroll function is becoming increasingly complex due to changes in legislation, Covid$-19$ aftershocks and the

move to hybrid working $-$ particularly in terms of tax and compliance. While HR professionals need to focus on strategic

concerns such as talent recruitment, development and retention, they are spending more of their time on compliance

instead. Sage research indicated that $77\%$ of SMEs consider payroll taxes complex, while $50\%$ find it challenging to explain

a tax calculation.

To remain compliant, payroll and HR professionals must understand the impact of legislative changes on processes and

systems such as UIF and PAYE calculations, pension and medical aid fund contributions, and $$ a first for many in the

profession $$ data security. Although $91\%$ of payroll and HR professionals say their organisations are fully compliant with

POPIA and the General Data Protection Regulation, $63\%$ worry about securely sharing personal employee information and

$48\%$ still worry about compliance.

$$For HR professionals to step up and take a more strategic role in the business, they need to tame the current challenges

they face in administration and compliance,$$ says Yolandi Esterhuizen, Director: Product Compliance, Sage Africa & Middle

East.

$$This is where forward$-$looking HR and payroll departments see technology playing an increasingly vital role in their future.

Those with accessible, integrated cloud$-$based platforms are already reaping the rewards.$$

Attracting the best talent

Payroll and HR professionals are also spending a lot of time on manual, repetitive tasks and maintaining employee data.

$30\%$ of respondents said they spend a third of their day on manual repetitive tasks. They therefore have little time to take

advantage of Employment Tax Incentives or to position the company as a desirable employer for Generation Z$.$

Younger generations expect more from employers regarding ethics, social responsibility, and social issues. These digital

natives have very different expectations of work and how and where they do it$.$

Here, cloud technology is also playing a huge role in making talent management and engagement less complex.

Cloud technology can automate mundane tasks, improve reporting and compliance accuracy, support data security, and

free up time to focus on things that make a real difference in the business. This can include maximising ETI benefits to

develop in$-$house skills, empower the youth, and position the company as a desirable employer.

$$The most successful businesses will be those that embrace specialised technology to free up time to focus on

understanding employee expectations, grasping the cultural benefits that will attract the best talent, and putting in place the

systems and processes necessary to engage and retain that talent,$$ says Esterhuizen.

Making decisions

According to the research, $62\%$ of HR and payroll professionals say that embracing technology and analytics should be a

top priority for leaders.

Among the key areas respondents wanted payroll to simplify in order to focus on making leading business decisions,

included automating tax calculations$$ integrating payroll, and centralising records using cloud$-$based systems.

Specialist cloud payroll and HR systems, like Sage Payroll, offer all this, as well as ease of integration, online support,

access from anywhere, and direct links to banks and tax authorities. Such systems streamline and automate processes,

provide real$-$time employee and organisational data needed for better reporting, as well as analytics to inform strategy and

planning.

$$This equips teams with the real$-$time insight they need to make substantial contributions at boardroom$-$level discussions

about strategy, data security to improve compliance, and a streamlined payroll process to reduce errorQuestion $2(25$ Marks$)$

From the circumstances arising in the article, you have been tasked with critically analysing the importance of the

relationship between human resources and organisational strategy. Furthermore, highlight the challenges that SMEs may

encounter when implementing human resources strategy and how these may be overcome