Payroll has always been done in a particular way – but realtime payroll is changing that for the better. Could this be the end of the big stressful rush before payday?
It’s no exaggeration to say that payroll professionals are the backbone of organisational operations. In a role with high complexity and administrative burden, they work hard to ensure people are paid accurately and on time, every time.
Unfortunately, month-end stress is all-too-familiar for these business-critical colleagues. As the end of each pay cycle draws near, payroll teams find themselves in a repetitive race against the clock to check and verify pay data before cut-off. Not only does this take a toll on morale; it also increases the risk of errors and is an inefficient use of labour, creating peaks and troughs of activity across each month.
So, in an age where people experience sits front and centre, what can organisations do to improve the payroll talent experience – and what benefits can this also bring to employee experience and the bottom line?
Payroll just got real (and that’s a great thing)
The rise of realtime payroll will play a transformative role over the next year and beyond. For those not yet familiar, realtime payroll replaces traditional ‘batch’ processing with an ‘always in calc’ model that updates pay calculations as soon as new data comes in. This enables payroll teams to distribute their workloads more evenly across the cycle, eradicating month-end stress and creating a more consistent – and more enjoyable – payroll talent experience.
(Note: realtime payroll refers to the continuous processing of calculations, not to pay on demand, also known as earned wage access or flexible pay).
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Realtime payroll also supports greater peace of mind for accuracy-conscious payroll admins. Firstly, by creating more time for payroll teams to review data and drive accuracy, realtime payroll reduces the risk (and cost) of payroll errors. Secondly, and because realtime payroll is continually calculating, pay data can be updated at any point in the cycle, which all but eliminates the cost of late leavers. The cut-off window is greatly narrowed, and so employees who leave towards the end of a pay period are much less likely to fall through the cracks. More than that, payroll teams are also spared the arduous – and engagement-draining – task of trying to recover monies lost to overpayments. And in a market where the payroll talent pool is becoming smaller due to skills shortages and an aging demographic, the retention benefits to be gained here are far from immaterial.
What this ultimately boils down to is the value of putting live data to work, turning a traditional stop-start process into a smoother, more automated one. This is how payroll teams can access the enhanced visibility they need to act in the moment, deliver operational efficiencies, and unlock the exceptional experiences they deserve. Plus, it gives them realtime data to provide valuable payroll information to business stakeholders.
The benefits of realtime payroll are not exclusive to the payroll team, however. Other employees also stand to gain, as does the wider organisation.
Employee experience: fewer errors and faster first-time pay
As many as 77% of employees in the UK and Ireland have experienced financial stress over the past 12 months. Suffice to say there is zero tolerance for payroll errors. Irrespective of how small (or big) a payroll mistake may be, one thing’s for certain: it will create dissatisfaction, de-motivation, and distrust. Once again, realtime payroll reduces this risk by creating more time for payroll administrators to verify data and ensure the highest possible rates of accuracy.
More than just preventing dissatisfaction, however, realtime payroll also plays an active role in building better employee experiences. The onboarding of new hires presents a prime example. It’s still common for joiners who start employment after the payroll cutoff date (sometimes as early as the second week of the month) to have to wait until the end of the following month before receiving their first pay cheque. This isn’t good enough, especially in a time of elevated living costs and financial insecurity. By removing this lag, realtime payroll enables late joiners to be paid much sooner, creating a more positive onboarding experience that drives engagement and motivation.
Building the bottom line
So how do these multi-faceted benefits impact wider business performance?
By reducing errors and the cost of late leavers, realtime payroll creates significant cost savings by avoiding overpayments and eliminating the additional resource needed to correct mistakes. At the same time, this new technology can be leveraged to support long-term savings via more efficient resource planning and more agile, data-driven decision-making.
But that’s before we even touch on the topic of improved experience – and its bottom line impact. Think less stress, less repeat hiring, and more retention. Think greater efficiencies and more time for upskilling and reskilling. Consider the benefit of having a competitive edge when it comes to attracting and retaining top payroll talent. All of these factors come together to build business performance.
The key takeaway is that exceptional experiences pay dividends – and against the backdrop of a tough economic climate, skills shortages, and productivity problems, realtime payroll presents a new opportunity for organisations to drive better people experiences and increased operational efficiencies. Bottom line? This is the future of payroll – and it’s here now.
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