The payroll function is changing, and with that change comes new opportunities and expectations for payroll practitioners. This includes using their skills and payroll data to improve the employee experience – an area they may not have experience with but will soon need to know.
Paying employees on time and accurately was once the beginning and end of the relationship between payroll and the employee experience. But from a tight labour market emerged a renewed focus on improving the employee experience.
Payroll practices became a differentiator. In a PwC survey, 76% of workers who are stressed about their finances said they would be more attracted to an employer that cares more about their financial well-being.
Ceridian’s recent Future of Payroll Survey, conducted in partnership with the American Payroll Association (APA) and the Global Payroll Management Institute (GPMI), shows that employers have more work to do to satisfy employees with modern pay practices. And that payroll professionals will have a role in delivering an exceptional employee experience.
To meet modern employee expectations, employers must think beyond offering employees self-service access to view and update pay-related records – and prepare their payroll teams to do the same. Here are four pay strategies payroll professionals should be prepared to be a part of to improve the employee experience:
A 2021 World Economic Forum report revealed that women globally earn around 37% less than men in similar roles. In our Future of Payroll Survey, 61% of respondents said their organizations are currently working on understanding or resolving pay equity issues. This is progress, but one-quarter (26%) of respondents said their organizations have no plans to implement pay equity initiatives.
Employees can’t feel valued if they – or their colleagues – aren’t being treated fairly. Ignoring pay equity can have a significant negative impact on employee experience, productivity, and retention.
To stave off these problems, organizations can call upon their payroll personnel to proactively conduct a pay equity audit. Should any issues be uncovered, employers can then work to remediate the differences. And as they analyze payroll data to uncover any inequities, payroll professionals can also look for potential causes of these issues so they can be prevented in the future.
With so much information at our fingertips today, it isn’t difficult for employees to determine if their pay is in line with market rates. And given that 55% of respondents in Ceridian’s 2022 Pulse of Talent survey cited pay as what they most value in a job, workers are more likely than ever to seek out that information.
If employees discover that their pay is below market rates, it doesn’t bode well for the employee experience. After all, if they can find pay data, they know their employers can too. But just over half (56%) of our Future of Payroll Survey respondents said their organizations use pay benchmarking to ensure employees are paid at market rates.
Pay benchmarking can be an effective way for employers to improve employee satisfaction and retention. But it shouldn’t be a one-off, check-the-box initiative. Just as labour markets can change rapidly, so can pay rates. Engaging payroll teams in regular pay benchmarking initiatives can help employers keep pace with the competition.
Mapping the journey ahead for payroll professionals
Hear about today's pay challenges and opportunities, plus a step-by-step guide to start taking action today.
While discussing pay was once a workplace taboo, pay transparency is becoming an essential part of employee experience. A recent survey by Glassdoor found that 63% of employees prefer to work at a company that discloses pay information over one that does not.
Our survey data indicates that employers haven’t been as quick to embrace pay transparency. Less than half (49%) of our Future of Payroll Survey respondents said their organizations use pay transparency initiatives to improve the employee experience. And 36% said they don’t plan to adopt pay transparency in the future.
But as pay transparency becomes the law in more geographies and the norm in more companies, it will also become a standard part of the employee experience. Payroll professionals may be first asked to conduct a pay equity analysis to ensure there are no pay inequities prior to publishing salary data. Payroll teams can further contribute to pay transparency initiatives by using their expertise to help build compensation strategies and structures.
If you could choose, would you opt to get paid every two weeks or every day? Increasingly, workers today prefer to receive their pay as they earn it. And this preference drives career choices – with 78% of respondents in a Ceridian/Harris Poll saying access to on-demand pay would impact their decision to choose an employer.
And yet, only 15% of our Future of Payroll Survey respondents said their organization offers earned wage access/on-demand pay. But as employers look for more innovative ways to attract, retain, and satisfy employees, that number is likely to climb much higher.
And as more employers realize the value of on-demand pay, payroll professionals will have the opportunity to be a part of improving the employee experience and employee financial wellness by using on-demand pay technology.
Payroll professionals have always made meaningful contributions to their organizations. But as payroll evolves into a more strategic function, there is more opportunity ahead, and payroll professionals will become a vital and valued part of the employee experience.