What will California’s payroll industry look like 50 years from now?
They say the future is like the present, only more so. Thus, if we can understand where we are and how we got here, a picture of the future will unfold.
As we look back at the challenges of processing payroll in those early days, they seem to be amazingly simple. Then, it was simply a matter of figuring how much money to give the workers and how much taxes to hold back. It was an age before computers, when “cafeteria plan” meant the blue-plate special and “IRA” was just a name.
If anyone spoke of “flexible benefits” they were referring to exercise, and “Keogh” was a sound someone made when they had something stuck in their throat.
Now, payroll services handle a huge array of complex tasks and in the future we can expect that array to grow even larger. Of course, the greatest area of growth will come from the merger of payroll and human resources. Many larger companies have begun to combine these two departments, and we can expect that trend to continue.
Fifty years hence, the two will be inextricably linked, and we’ll forget there was ever a distinction between them. It will simply be called “employee services.”
Employees will be able to handle almost all of their financial needs at the “employee service kiosk,” which will become a fixture in every large office and factory. There, they will guide and control the flow of their income toward their various bills, their mortgages, choices for deductions, investments, and so on.
Gone will be the notion of “the paycheck.” Workers will finally become used to “direct deposit,” and that will become “instantaneous payroll.” There will be none of the lag time we have today, with banks profiting from the delay. The money will accrue in their accounts the moment they do the work and employees will benefit from the extra interest they get on it.
Of course, money in 50 years will look quite different than it does now. Cash will be an anachronism, and almost all transactions will be electronic. We will no longer carry credit cards the fingerprint of one index finger will serve as your ID. You’ll touch your finger to the screen at the “employee service kiosk,” and that will be your time clock.
This bodes well for Los Angeles. The trend toward telecommuting we see today will accelerate, as more and more of our workers move out of the city, out of the state and out of the country. We’ll see a larger and larger portion of our work force that works at home, and comes in once every few months. Keeping track of an ever more decentralized work force will be a huge challenge for payroll/employee services.
While this means even greater traffic on our phone lines perhaps we’ll see 10-digit phone numbers plus new area codes it may mean a reduction in traffic on our streets. Most prognosticators foresee horrendous traffic on our already clogged freeway system, and this may help ease that crunch and that is good news for Los Angeles.
Fifty years from now, life will be even more complicated than it is today. New laws, regulations and procedures will make today’s challenges seem minor by comparison. At the same time, we can expect to see the payroll industry meet those new challenges with technology and ingenuity, resulting in a better quality of life for both employers and employees.
Y. H. “Zeke” Rutenberg is president of Dataccount Corp., an independent payroll processing company headquartered in Torrance.
