Payroll Industry Trends for 2022
The start of a new year provides an opportunity to make changes and start fresh. After the pandemic caused a shift in many business processes over the past few years, new technology and innovative payroll solutions have emerged to help companies adapt. As 2022 begins and a new normal emerges, payroll industry trends are expected to continue to focus on helping companies facilitate remote work and support complex compensation agreements. New payroll technology may also help meet employees' requests for faster access to funds and more comprehensive salary information.
Faster Payroll Processing
The increased speed of the latest payroll systems has enabled companies to process payroll faster. This has led to innovation and the advent of newer options such as same-day pay for hourly employees and the availability of shorter payroll cycles. Quicker processing capabilities also provide management with timely reporting. This allows HR and executive management to work together to spot trends or issues at an earlier stage and respond as needed.
Greater Transparency Around Payroll
The future of payroll processing will likely support multiple levels of transparency. In the past, employers may have had little insight into their outsourced payroll. Employers need to take accountability for everything that is done by their third-party providers. A transparent mindset must also be communicated from the top-down. This means a willingness for executives to discuss their compensation philosophy. Transparency can provide vital information about the true cost of labor and the available talent pool, as well as data surrounding pay equity.
Flexibility as a Key Differentiator
Even if organizations don't have the budget to offer higher compensation than their competitors, providing better access to payroll information may help to win or retain top talent. Payroll, like many other services, should try to account for employee preferences whenever possible and as permissible within the applicable federal, state, and/or local laws. With the current multi-generation workforce ranging from baby boomers to Gen-Z, information delivery may encompass everything from paper statements to self-service access on mobile devices through text messaging, alongside workforce management or payroll apps. What's more, the latest app capabilities have expanded to run the gamut from student-loan repayment to micro-investing or paying your mortgage directly from your paycheck each month. The ability to help meet people's need for financial information can be a true differentiator, and gives employers another lever to pull when it comes to attracting and retaining talent.
On-demand payroll gained popularity when many workers faced the initial financial crunch brought on by the COVID-19 pandemic. By working with a third-party service, employers were able to give employees the option to access wages as they were earned. Employees typically pay a fee for on-demand pay services, which helps them manage cash flow challenges rising from disruptions to daily life. On-demand pay services may provide additional benefits to employees such as improved financial management, reduced stress, and potentially increased productivity and engagement at work.
Increase Payroll Accuracy, Decrease Payroll Errors
Payroll accuracy is vital. Rather than processing batches of checks and finding errors on the back-end, which takes time to correct, building in more front-end reviews can help ensure that payroll is accurate before it goes out the door. Allowing employees to review their pay information prior to the release of funds is one way to confirm accuracy on the front end. Using Paychex Pre-Check, employees can be involved in the payroll review process, ensuring that their earnings and withholdings are accurate prior to payday.
Implement More Efficient and Effective Payroll Systems With New High-Tech Solutions
Capitalizing on the top payroll industry trends of 2022 requires a strong partnership with your chosen payroll provider. Whether you're limiting services to a basic payroll run from a third party or choosing to outsource your full HR strategy, it's important to bring a service partner into the process sooner rather than later. Technology can be a big part of how business strategies are executed and getting employees on board starts with the fundamentals: a paycheck delivered on time, with access to information and accompanying services when, where, and how they want them.
No matter what technological advancements come along or how the workforce changes, payroll remains a constant. It's a key piece in the relationship between the employer and the employee — and trust is built when employees are paid accurately and on time. As the past few years have shown us, unexpected events arise, from weather-related supply chain issues to a full-scale public health emergency. Preparation and flexibility are the keys to dealing with shifts in economics or the workforce. Employers will want to ensure that paychecks are processed, and that they have a back-up plan to avoid losing the trust of valued employees. If you're ready to capitalize on the latest industry solutions, here is one way Paychex is helping organizations guard against payroll interruptions.