News of poor payroll can spread like wildfire. The sign of a good payroll function is often that it takes place quietly in the background. If it goes wrong however, it can have a catastrophic impact on both employees and the business as a whole.
Not only are employees affected, which often impacts employee engagement and satisfaction, but more often than not, the company brand is also damaged. Take for example Debenhams back in 2017, which was named and shamed for underpaying its workforce.
The UK retailer was recently outed
as the “worst offender” in the government's biggest ever list of companies that have paid their employees below the national minimum and living wage. With national coverage highlighting every detail about its neglect surrounding paying employees, Debenhams would have struggled with employee retention and attrition in the months that followed. No employee wants to work at an organisation that underpays its workforce or struggles with payroll accuracy, especially one with such a high profile outage.
The payroll problem
A recent ‘Workforce of the Future’ survey of 250 industry professionals’, which researched how the HR and payroll function will evolve by 2025, found that poor payroll can have an impact on staff motivation (64%), trust in management (60%), employee churn (56%) and productivity (59%).
Without the basics in place, the modern workforce is unable to evolve and progress. These organisations put themselves at risk of losing employees and struggling to find and retain talent.
Employer responsibility is changing with social and economic shifts and new generations entering the workplace. Paying employees correctly at the end of each month, although important, is no longer enough. The modern workforce now prioritise flexibility, personalised wellbeing packages and the opportunity to develop their skills.
Respect and responsibility
There’s no doubt that employees want to see their employers take more responsibility for their financial and emotional wellbeing. As the workplace and workforce is constantly changing, employees are demanding increasing flexibility over working hours, whether it’s flexitime or shorter weeks.
Workplace benefits are becoming progressively important, especially as new generations enter the workplace. For example, millennials are asking employers
for ongoing training and development, family benefits and lifestyle support, alongside their base salary. Generation Z employees also expect authenticity and transparency from employers.
The ‘Workplace of the Future’ survey also revealed that nearly two thirds of employees prioritise being able to work different hours or days. Having a simple way to view and interact with payroll systems, being rewarded for overtime and being offered access to personalised reward packages was also highly rated.
Employers now need to offer employees a mix of accurate payroll, good HR practices and responsible leadership to ensure that the workplace-and its employees-are thriving. Simply paying employees at the end of each month no longer cuts it for the modern workforce.
Payroll professionals are not operating in the dark when it comes to awareness surrounding the changing priorities of employees within their organisations. Employee expectations around how (and how frequently) they are paid is also becoming an increasingly regular conversation, with two thirds (67%) of payroll professionals agreeing that employers should empower the workforce by offering greater freedom and flexibility in how and when employees are paid.
As the workforce becomes more and more flexible, a rigid monthly pay cycle doesn’t always suit every employee. By personalising the way that employees are paid and offering personalised rewards packages, employers will be taking more responsibility for the happiness and engagement of their workforce and will be offering employees a modern alternative to the traditional pay cycle.
Many employers are already offering (or planning to offer in the future) a wide array of financial services, as a newly integrated part of the payroll function. These services include everything from personalised financial advice, debt counselling and both advance and flexible pay facilities. In some instances, these new extended services may even include low interest loans for employees, integrating payroll with a strategic approach to financial planning and management.
Ultimately, maintaining a healthy work-life balance and having access to learning and development opportunities is paramount for the modern workforce, especially as new generations come up through the ranks. By offering a broad range of financial services, ensuring that payroll is consistent and accurate and going above and beyond typical employee reward packages, employers can take responsibility for their employees and offer a modern workplace for a modern workforce.