Payroll management is one of the most crucial services to any organization because it ensures employees receive their wages accurately and on time. As technology advances and the workforce evolves, the landscape of payroll practices is experiencing significant changes.
Key trends shaping the future of payroll include pay access, technology and automation (AI), and integrated workforce management. With companies already adopting these models, your company needs to understand these trends and how they can improve your payroll management as we move toward Q2.
What is Pay Access or On-Demand Pay?
Pay access, also known as on-demand or instant pay, allows employees to access some or all of their paychecks before their traditional payday, usually as soon as they earn it. On-demand pay is an alternative to the traditional weekly, bi-weekly or semi-monthly payroll schedules companies have used historically. Pay access must align with local regulatory bodies to ensure the payment method is fully compliant.
Seventy-eight percent of workers live paycheck to paycheck. Fewer than half of Americans, 44 percent, can afford to pay a $1,000 emergency expense from their savings. Employees can cover unforeseen costs and ease employee stress over inflation and economic issues with on-demand access to their wages.
An employer can limit how much employees can draw down to reduce risks for both the business and the employee. Pilot programs have demonstrated the effectiveness of this approach.
Previously, employees who needed funds between payroll cycles would have to turn to loans or credit cards, which can lead to the accrual of high-interest debt. On-demand pay access offers employees financial protection and investing in their financial future.
Automation and Technology
Employees seek a one-stop shop for everything, including HR, learning management, onboarding, time tracking, benefits and payroll.
Payroll technology has significantly improved employee experience, allowing easy access to payroll-related information and faster tax and direct deposit change updates.
Self-service payroll portals have grown more critical, especially with remote workers. These tools and mobile applications empower employees to manage their payroll information independently, standardizing and streamlining processes.
A self-service portal benefits both the business user and the employee using it. Integrating a mobile app can be another step to simplify employee payroll.
Data security and privacy concerns have gained prominence with increasing reliance on digital systems. Payroll systems are adapting to incorporate robust security measures, including encryption and multifactor authentication.
Kelly Benefits Payroll adheres to strict regulations and implements checks and balances to safeguard sensitive employee information.
Kelly Benefits employs an in-house team of cybersecurity professionals who have put in place an Information Security Program that continues to safeguard processes, personnel, resources, and systems that actively monitor our systems, networks, and facility to safeguard against data loss and breach.
People Solutions, Not Payroll Solutions
Payroll professionals continue to face various challenges.
The payroll landscape continues to become more complex due to diverse regulations, compliance requirements, and intricate calculations. Businesses are recognizing the importance of having an efficient and supportive IT team.
Integrated workforce solutions provide the necessary tools and technology to navigate the complexities of payroll processing. These solutions streamline payroll operations, enhance accuracy, and ensure compliance with specific state rules and regulations.
By integrating workforce systems, payroll professionals can leverage automation, data synchronization, and real-time reporting to simplify payroll processing, minimize errors, and improve overall efficiency. This integration can facilitate communication between different HR and payroll functions, leading to a more streamlined process.
The Future of Payroll
Payroll management is undergoing significant changes as the way we work evolves. Key trends shaping this evolution include pay access, automation and technology, and integrated workforce management.
Pay access, or on-demand pay, enables employees to access their wages before the traditional payday, providing financial security and reducing the need for loans or credit cards. Automation and technology have significantly improved employee experiences, with self-service payroll portals and mobile applications empowering employees to manage their payroll information independently. Data security measures, such as encryption and multifactor authentication, address privacy concerns. Integrated workforce management solutions streamline operations, enhance accuracy, and ensure compliance with regulations, helping payroll professionals navigate the complexities of payroll processing in the evolving business landscape.
Organizations that understand and embrace these trends can equip themselves for the future, stay competitive, and attract and retain highly qualified talent. Organizations that adopt these practices can create a more engaged and satisfied workforce, fostering long-term success in a rapidly changing work landscape.