To commemorate National Payroll Week, we're reviewing four SPARK articles that highlight various touchstones in the evolution of work and pay. Hopefully, these articles will encourage you to review your payroll processes and strengthen your relationships with your employees.
National Payroll Week annually observes the relationship between workers, businesses and payroll professionals — a connection that drives productivity and the economy.
The week is also an opportunity to look at recent transformations in how people work and expect to be compensated. From the decline of paper checks and the growth of electronic payments, to the prevalence of tech-savvy millennials in the workforce, to the increasing use of freelance workers — these and other dynamic changes are prompting organizations to rethink how they pay people.
An inefficient payroll process can sever the tie between employer and employee, and potentially drive away job candidates and freelancers who want to be paid now rather than later.
To help your organization — and to commemorate National Payroll Week — we're reviewing four articles that highlight various touchstones in the evolution of work and pay. Hopefully, these articles will encourage you to review your payroll processes and strengthen your relationships with employees.
Businesses aren't moving to electronic payment processes because they're trendy. Rather, they're doing so because electronic payment options allow organizations to be more efficient by reducing overhead costs and making accounting more transparent, which can reduce compliance risks.
Not every employer has gone digital; some employees still prefer paper checks. But when comparing the two methods, it's becoming evident that electronic payments are more advantageous than those done on paper. Paper checks are not convenient, can easily be lost. Expect to see even more organizations go digital in the near future.
The move toward digital payments is driven largely by millennials, who make up the largest generation in the U.S. workforce. They expect employers to offer digital payment services. That expectation is logical: Younger people spend more time on their smartphones than older generations do, and many of them conduct banking services on their devices.
The rapid growth of Apple Pay and other digital payment services only emphasizes the need for organizations to understand that digital currency isn't a fleeting trend. Digital payments are easier to use and more secure than paper payments. Your organization's hesitance to accommodate digital-savvy workers could actually be a deal-breaker in hiring the best talent.
Gig workers are becoming a go-to resource for many organizations. Many skills — e.g., writing, accounting, human resources — have large markets of freelancers ready to help. Freelancers lower costs and let businesses be more agile. The freelancers, meanwhile, enjoy the flexibility of being their own bosses and pursuing assignments that matter to them.
Cloud apps allow freelancers and businesses to work together despite being far apart. Mobile technology also allows employers to easily pay freelancers, removing much of the red tape that used to slow the compensation of contractors. There are some potential compliance issues bubbling up that organizations should watch closely, but there's no slowing the gig economy. It's worthwhile for businesses to invest now in mobile technology so they can attract top freelancers.
The shift toward digital and mobile payments and an increase in contract work have three underlying themes: speed, access and engagement.
Workers expect, and sometimes demand, quick access to their earned wages. Several technologies are making that happen, with some enabling businesses to immediately pay workers for part of their pay as soon as they earn it. And as the ubiquity of pay cards and mobile technology illustrates, for most workers — including those without traditional bank accounts — compensation done right means frictionless access to pay. Businesses can go a step further by engaging employees with day-to-day financial offerings like bill pay, savings accounts and budgeting offerings.
No matter how your organization decides when and how to compensate, the technology that best suits your goals will determine what kind of workers you will attract. You can shape your future of pay by taking action now.