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The world of global payroll is evolving, perhaps more than it ever has done before. The traditional approach of a payroll operation that is relatively siloed and insulated from the rest of a company is becoming increasingly outdated. Payroll is becoming a global, strategic process with consequences on a similar scale, and so it must now connect with other business areas. Any business that doesn’t have the capabilities to support this evolution is facing a race against time to get them up and running.
Where payroll once stood alone, it has now become one constituent part of a wider philosophy known as ‘employee pay’. There are three interconnected parts that make up employee pay, and only by successfully executing all three can both employers and employees feel the benefits that this evolved function can bring.
1: Payroll
As companies transition towards employee pay, it’s very important that the traditional payroll functions aren’t neglected. Although it may not be as new or exciting as the potential that employee pay brings, those innovative benefits can’t get off the ground if payroll doesn’t work as it should in the first place. In short, payroll represents the foundations on which a successful employee pay function is based.
Where payroll differs from the other elements of employee pay is that it encompasses the more practical, tangible, transactional parts of the process. It covers the physical act of ensuring that employees are paid accurately, on time and are provided with the appropriate information (such as payslips). But within an employee pay function, there is still a need to ensure that these ‘legacy’ procedures remain reliable and compliant.
2: Employee Experience
This strand of employee pay moves away from the nuts and bolts of payroll, and considers the less tangible and more human side of what pay means to people. The money that employees earn in their job affects their wellbeing both in and out of work: how productive they are, how valued they feel by their employer, the financial stability of themselves and their family, and so on. A good employee pay function will take these factors into consideration, and track them through KPIs such as employee satisfaction, retention, and brand image.
The ramifications of these ‘softer’ issues from an employer's perspective can’t be underestimated. Employees who are happier in their jobs and who feel financially secure at home are more likely to maximize their productivity, less likely to fall victim to absenteeism, and will want to stay with the company for longer. And as the business gains a good reputation for employee care within its industry, it should become easier to recruit the most talented candidates within highly competitive job markets.
3: Earned Wage Access
Flexibility is the key to supporting the human elements of employee pay, but how can this be achieved in practice? The best way to do so is by putting employees in control of how, when and how much they’re paid, and to allow them to decide and execute this for themselves with minimal intervention from payroll teams.
The emerging innovation of Earned Wage Access delivers this flexibility. Employees can accrue wages on a daily or per-shift basis, and through an online portal or even a mobile app, they can see their earnings rise. Through this solution, they can withdraw any or all of the wages they have earned to their personal bank account at any time.
The automation of this process by using a self-service solution is essential, as it wouldn’t be practical for payroll teams to deal with endless requests for instant payment. However, using such a platform means that businesses can set parameters to how the EWA system would work, ensuring that while employees enjoy more freedom around their pay, this freedom doesn’t compromise the smooth operation of the business as a whole.
In summary
It may seem like the move towards employee pay delivers far more benefits for the workforce than it does for the business implementing it. But that would be to overlook the strategic role that employee pay - and the data it generates - can play within a wider organization.
As well as the positives of a productive, loyal, motivated workforce, the information that comes from employee pay can help businesses get more detailed insights about how their employees operate. This information can help companies make better, more informed decisions for the future - a vital tool in enabling the agility that has become so important in today’s business world.
CloudPay’s global payroll solution is ideal for businesses exploring the brave new world of employee pay, and how it can integrate with their wider business operations. Learn more about what we do and how we do it here.
