Payroll is an essential function for any business and yet, it’s a lot more complicated and time-consuming than one would expect. With technology advancing at breakneck speed along with the rise of new trends in the financial sector, the future of payroll is looking significantly different from what the workforce has been used to for many years, but it remains a pain point for many. In this article, we’ll take a closer look at the future of payroll and some of the trends to watch out for as the HR world continues to transform.
What is payroll?
Payroll refers to the process of calculating, distributing and paying salaries to a company’s employees. It also involves the management of deductions such as taxes and benefits, as well as the tracking of employee hours and absences. Payroll is a highly complex task that requires accuracy, efficiency, and attention to detail to ensure that employees receive their payments in the correct amount and on time, while the business stays compliant with government regulations.
Payroll plays a huge role in the employee experience, as well, and this doesn’t exclude HR. An article by Fintech Futures articulates this point well: “Employees need to be able to trust that their hours are correctly compensated for, their leave is up to date, and their money is easily and immediately available.” To add to that, “HR and finance administrators also suffer from outdated technologies. Those people who pay salaries and access payroll data for business planning, cost-containment, and identifying talent requirements need a more efficient consumer-like user experience.”
Furthermore, startups and SMEs tend to either outsource or process their payroll manually by using spreadsheets, but these unreliable ways of managing payroll are time-consuming, tedious, and highly susceptible to errors. With research revealing that 1 in 4 employees have received a paycheck with errors, and almost 50% of workers began applying for new jobs after two paycheck errors, it’s clear that companies need to step up their payroll game, stat.
Thanks to modern technology, though, all the complexities of payroll can now be taken care of easily with the right tools and practices. So without further ado, let’s see what the future holds!
Payroll trends to watch out for
The rise of fintech
Simply put, financial technology (fintech) refers to the digitalization and automation used to support or enable banking and financial services. Examples of fintech include mobile banking, peer-to-peer payment services like Venmo or CashApp, trading platforms, and more. Some companies are even going so far as allowing users to allocate some or all of their paycheck into cryptocurrencies!
Payroll is also being disbursed via debit cards through a process called payroll card or paycard. A paycard is essentially a prepaid debit card that an employer loads with an employee's net pay. Consider it a cost-effective alternative to a traditional paper check or direct deposit. With this method, employees avoid check-cashing fees, and they can easily track their spending and manage their money through online banking or mobile apps provided by the payroll card issuer.
Fintech has been disrupting the financial sector for a long time now, and it’s set to change the payroll landscape, as well. With new fintech companies entering the market, businesses can expect to see innovative payroll solutions that incorporate the latest technology and features. This is likely to result in a more user-friendly and efficient payroll process, making it easier for businesses to manage their payroll and for employees to receive their salaries and access their pay information.
Automated payroll solutions
Automation has been making its way into almost every industry, and payroll is no exception. In recent years, many payroll software solutions have been developed to streamline the payroll process, making it faster, more accurate, and more efficient. As technology continues to evolve, we can expect to see even greater automation of payroll processes in the future.
Not only can using the right automation tools be more cost-effective and efficient, but it lowers the chance of human error, ensures your company remains compliant, and reduces the number of people that need to be hired specifically for payroll-related tasks. All of this is especially great news for companies that are still too small for a dedicated finance team.
Emphasis on employee experience
In the past, payroll was seen as a necessary but unglamorous aspect of running a business and remaining compliant, but the focus today is shifting to the employee experience and how payroll can play a role in improving it. This means that businesses should really be looking for payroll solutions that offer features such as self-service portals and personalized communication to enhance the employee experience.
Having a user-friendly platform that employees can easily access from anywhere to take care of things such as expense reimbursements, requesting advances, choosing frequency of payment, and more, is a surefire way to enhance the employee experience and take your payroll to the next level. Not only is this going to be beneficial to employees, but it will also make your company stand out as an employer of choice!
The future of payroll is looking bright, with new trends and technology set to revolutionize how businesses manage their payroll. Whether it’s the rise of fintech, increased automation, or a focus on the employee experience, the future of payroll promises to be faster, more efficient, and more user-friendly for everyone involved.
By staying up-to-date on the latest payroll trends, businesses can ensure that they are prepared for the future and able to take advantage of the many benefits that come with a modern payroll process. So, is your company ready to embrace the future of payroll?
Lucky for you, we offer an HR solution with a built-in payroll functionality that makes pay-day a total breeze! If you’re interested in taking it for a spin, go ahead and sign up for free and in just a few clicks www.alfii.co
Featured images sourced from canva.com