5 Jul 2025
Navigating Change: Key Priorities for HR and Payroll
The public sector faces complex challenges including budget constraints, workforce shortages, and increasing demand for agile service delivery. For HR and payroll, this landscape demands a proactive, strategic approach to workforce management and operational efficiency. Frontier Software Business Manager, John Dunham, describes some of these challenges and how they can be addressed.
Adapting to Workforce Transformation: With hybrid and flexible working now widely adopted, John believes the HR team must take a leading role in shaping policies that balance employee wellbeing with organisational performance. This involves rethinking traditional job roles, investing in digital collaboration tools, and ensuring policies accommodate the diverse needs of a multigenerational workforce. Additionally, an ageing workforce presents challenges around succession planning and knowledge retention. Effective workforce planning is vital, leveraging data from HR systems to anticipate retirements, identify skills gaps, and guide targeted recruitment and development initiatives.
Ensuring Payroll Compliance and Accuracy: Regulatory compliance is a critical concern for payroll teams. Rising minimum wage thresholds, and changes to statutory pay, e.g. sick pay, parental leave mean that staying updated with legislation is non-negotiable. Public sector payroll teams must also navigate complex pension schemes, including the Local Government Pension Scheme (LGPS) and Teachers’ Pensions. Given the scrutiny these schemes attract, accurate contributions, timely reporting, and clear employee communications are paramount. John cautions that relying on outdated software that is not maintained can lead to errors in payroll that not only risk financial penalties but also damage employee trust.
Leveraging Technology for Efficiency: Amid evolving organisational demands, John emphasises that “digital transformation is no longer a future ambition, it is a current imperative”. Increasingly, HR and payroll teams are adopting cloud-based systems that unify functions on a single platform, enabling real-time reporting, automating routine tasks, and enhancing data accuracy. Artificial intelligence (AI) and robotic process automation (RPA) are also gaining considerable traction, streamlining processes including leave approvals, payroll calculations, and handling employee queries. Crucially, he continues “the successful implementation of these tools relies on parallel investment in upskilling staff to ensure technology is used both effectively and responsibly”.
Fostering Inclusion and Employee Engagement: Diversity, equity, and inclusion (DEI) play a central role in public sector recruitment and retention strategies. HR teams should aim to embed DEI principles throughout the entire employee lifecycle. Starting with inclusive job advertisements and fair recruitment practices, through to accessible training opportunities and clear, flexible pathways for career progression. Engagement is also key. Amid economic uncertainty and rising workloads, recognising employee contributions, supporting mental health, and facilitating career development can improve retention and morale.
John concludes that the road ahead is both challenging and full of opportunity. By embracing innovation, prioritising compliance, and placing people at the centre of strategy, HR and Payroll teams can play a transformative role in shaping a resilient, future-ready workforce.
Frontier Software has been delivering HR and Payroll software solutions across the public sector for over 40 years, using proven software for recording, managing and reporting on people and pay data.
Article originally published in Public Sector Focus June 2025.