Compensation management are becoming strategic in the face of ransomware attacks and a necessary tool for employee recruitment and retention.
Constant innovation and frequent transformation help keep businesses relevant and successful, but often many day-to-day company processes are left stagnant despite the benefits of the latest innovations and technologies.
Payroll management systems, and the ways employees are compensated, are beginning to change as rapidly as how consumers pay for products. These evolving processes allow companies to better compete as an employer of choice, offer added security and are beneficial to employers and employees alike. In fact, there are four payroll trends that stand above the rest in achieving these goals and keeping pace with the evolving employee compensation landscape.
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1. Alternative payment methods take center stage
Paying employees through mobile wallets is one alternative payment method that provides a long list of advantages. They offer convenience to employees and allow workers to receive pay without using a bank account. In addition, they increase the security of a business's entire payroll system and its employees' earnings and have integrated features to enhance overall financial wellness.
The timeframes in which employees are paid is also a payroll institution that is evolving with the emergence of earned-wage access. Essentially, earned-wage access is the ability of an employee to access funds they have earned before their scheduled payday. This system provides convenience and piece of mind for employees and can bolster a company's appeal as an employer. According to a 2021 Harris Poll, 80% of workers in the U.S. aged 18-44 would prefer to have their pay transferred into their bank accounts as they earn.
2. Mobile employee transactions can streamline payroll systems
Providing employees with mobile platforms for self-service transactions is an emerging method to alleviate traditionally time-consuming tasks that must be manually performed by payroll or HR staff. These systems allow employees on-demand access to copies of their W2s, view how much PTO they have available or change voluntary contribution amounts to streamline overall internal HR and payroll processes. However, 40% of employers have yet to leverage mobile platforms, according to the latest Deloitte Payroll Benchmarking Survey.
3. Next-gen technology grows in use
According to the Deloitte report, 16% of companies surveyed are already using next-gen technology in their payroll systems, and a staggering 49% are planning to implement these systems within three years. These systems may include:
- Customized engagement platforms for each employee and promotion of employer-sponsored financial wellness programs
- Artificial intelligence to replicate human interactions and decision-making, leveraging human-like capabilities such as listening, reading, writing and analyzing
- Machine learning to quickly identify and resolve input errors and enhance decision-making
More importantly, nearly half of the companies surveyed are using next-gen tech to automate payroll processes to increase compliance and efficiency.
4. Payroll evolving from operation to strategic advisory role
As essential as payroll is to the operation of any business, its function has traditionally been viewed as just that — operational. However, there are signs this attitude is changing as compensation management becomes strategic in the face of ransomware attacks and a necessary tool for employee recruitment and retention.
As overall compensation methods evolve, this strategic focus can transform payroll from a back-office function to one that can ensure an organization's long-term success.
Making this transition isn't easy, and payroll can often be overlooked when a company implements plans to optimize its processes and increase employee retention. However, keeping abreast of these payroll trends and potentially utilizing them is a vital means to ensuring your company is a workplace of choice, is kept safe from hackers, enhances your employee experience and streamlines your HR and payroll processes.
Mark Johnson is general manager and vice president of product, payroll and HR solutions at Deluxe (NYSE: DLX), a trusted payments and business technology provider.
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