How can HR leverage flexible payroll solutions to improve the bottom line
The past year has been a watershed for HR teams worldwide. Remote work, dramatic shifts in the labor market, and increasing economic volatility defined most HR tech purchase decisions in 2020. However, as we hit the mid-way mark for the first quarter of 2021, it is time to ask – have we aligned our technology and processes to serve our current business needs better?
While HR transformation has brought about a massive shift in how various HR functions add business value, payroll has largely remained the same. Sure, it is now cloud-based, but it is still something of an afterthought. Payroll is yet to see the same level of fundamental, technology driven transformation that has reshaped so much of HR.
Also read: How HR Can Rethink Payroll Planning for Gig Workers: Q&A With Alight Solutions
The idea of payroll transformation is gradually gathering pace. However, in addition to being perceived as a cost-center, payroll is also a sensitive business function subject to several local, state, federal, and global standards, regulations, and laws. In the U.S., many states and local jurisdictions have laws relating to the minimum wage and family medical leave.
In other words, the demands on the payroll function have been growing. Notably, this is more so in the wake of the pandemic and blended workforce models getting more popular. New-age flexible payroll solutions have been targeting these challenges. As a result, businesses now have a solid foundation for transforming payroll to keep up with evolving business needs.
Off-Cycle Payments: A Talent Imperative for Organizations in 2021?
Businesses now have different payroll needs – on-cycle payroll, bonuses, and off-cycle payroll. For example, as companies grow, supporting employees in new geographies is critical. A dispersed employee-base means that organizations will need to make payments outside the regular payroll cycle. These one-off or recurring payments are known as off-cycle payments.
According to ADPOpens a new window , 62% of global employees would be keener on considering job offers if given the ability to choose their pay frequency. As employees become increasingly concerned about their financial well-being, organizations offering payment options, off-cycle payments, and financial wellness support will have an edge over the competitors when attracting top talent.
Also read: Differential Compensation Packages Causing Friction: Amazon Workers Upset
The ADP survey also found that 29% of employees believed that being able to have early access to their earned wages would make a difference in their decision to accept a job. More than a quarter (26%) of the survey respondents indicated that receiving same-day pay would influence whether they accept a job offer. In comparison, 22% of millennials said that access to saving and budgeting tools would make a difference.
The study also revealed that 78% of organizations believe that they will need to customize pay options to remain competitive and bag top talent. 70% of the organizations already feel the need for different payment options and 63% say that it is important to customize pay methods for different types of workers.
As a result, leading organizations are very likely to offer early access to pay and believe that their employees would use early pay options at least once a year It is clear that providing payment options that reflect employees’ needs has quantifiable cost benefits for employers. It also improves the employer brand, financial health, and productivity.
So, how can employer pay cycles catch up with the consumer payment solutions? The data is all there. Employee compensation has a definitive impact on recruiting, retention, and satisfaction.
How To Improve Payroll Efficiency With Off-Cycle Payments?
Cloud-based payroll solutions help organizations and HR teams address non-conventional payroll flows, making it easy for them to configure these solutions to meet their specific needs. When there is a potential issue, the payroll flows can be stopped for review, and the system alerts HR teams of notifications and actions necessary.
Solutions like DailyPay, Oracle, and Gusto allow companies to improve payroll efficiency, making it easy to collaborate with Finance and Compliance teams. These solutions enable more efficient processes and reduce turnaround times for systems and people.
Some of the must-have features for cloud-based flexible payment solutions include:
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- Dashboards: When working with off-cycle payments, dashboards are critical for providing the big-picture view of multiple active processes. Dashboards allow you to monitor and identify errors in payroll flows. It also helps you make better decisions by providing the visibility needed to manage payroll effectively and the ability to drill down into processes to be able to quickly act on problems.
- Integration: Your payroll solution should ideally be able to share data with all your other HR and finance solutions such as, ATS, compensation, talent acquisition, benefits management, and time and attendance. This means that your payroll solution has seamless access to employee information; so, employees do not need to spend time filling out their data. Administrators’ lives are also much easier – they do not need to manage heavy integrations to accommodate flexi-pay options.
- Mobile Capabilities: With remote work here to stay, your payroll solution must have a mobile self-service option that allows employees to access their payroll data/cycle from any device without the need for a mobile application. Employees and payroll teams can use their computers, tablets or phones to get their jobs done more easily.
With these tools and capabilities, HR teams can streamline payroll processes to increase the efficiency and effectiveness of off-cycle or flexible payment options.
Also read: 3 Ways Compensation Technology Can Create an Equal and Fair Workplace
Succeeding With Flexible Payroll Solutions in 2021 and Beyond
Deploying a flexible on-demand payroll solution goes beyond just choosing the right tool. Decision-makers need to think broadly about the improvements they wish to bring through the payroll solution. They must look beyond merely trying to “re-implement†legacy processes.
A flexible payroll solution offers the opportunity for organizations to leverage the strengths of the solution to standardize processes and procedures. Payroll professionals can also take advantage of the new tools to discover new ways of working. While laws and regulations define many payroll practices, there is still a lot of room for innovation and driving change in the payroll function.
Flexible payroll solutions have the potential to provide a foundation for innovation and change – and organizations must be prepared to use it to discover new opportunities and transform business.
What’s the expectation around on-demand pay in your organization and how are you ensuring financial wellness of your workforce? Let us know your thoughts on LinkedInOpens a new window , FacebookOpens a new window , and TwitterOpens a new window .