How Payroll Can Enhance the Employee Experience?

PayFit
Last updated on November 11, 2022

Payroll is a process that affects every single employee. So it’s crucial your organisation gets it right. Without an efficient payroll process, it’s possible to cause damage to your employee experience, which, in turn, can impact your bottom line.

Happy employees are more productive, which means you can achieve your business goals much easier if you prioritise your employee experience. According to the 2021 EY Payroll Survey, only 67% of organizations have a formalized payroll strategy — which you will need to improve the employee experience.

Read on to learn how payroll can enhance this experience.

What is employee experience?

From the workplace to culture and processes, everything impacts how employees experience your company. Every touch point plays an important role from the first interaction with your organisation until the day they leave.

You want employees to feel valued, empowered and happy in your company. Adhering to all these things means you’ve got a better chance of retaining the best employees. 

Survey data from the Mercer Marsh Benefits report shows that 69% of companies increased benefit spending considerably in response to the pandemic. But increasing your budget doesn’t necessarily improve the employee experience. 

You can throw all kinds of perks at the wall; fresh fruit, free teas and coffees, flexible working, gym membership, the list goes on. But if your payment process isn’t slick, and your employees aren’t paid correctly, you’ll never improve their experience enough to deter them from looking for a new opportunity.

The effect of payroll on employee experience

Most employees work to live — that’s just a fact. So when payday finally rolls around, imagine finding out your pay is short for the month — you wouldn’t be happy about it, would you? Errors in payroll and archaic payroll processes can leave your employees reeling.

And who can blame them?

The basic expectation of any job is that you get paid correctly and on time. And when you don’t meet these basic expectations, you jeopardise your relationship with your employees. And after the damage is done, it’s hard to regain that trust.

Other effects of payroll on employee experience:

  • Inefficiently managed payroll can cause employees stress

  • Employees can lose faith in the organisation, which can lead to lack of motivation (and job hunting)

  • Your company reputation can become tarnished, which can inhibit your ability to attract the best talent

If the reasons above weren’t enough to encourage you to re-think your payroll strategy, maybe this will be: a study by Gallup shows that companies with more engaged employees are 23% more profitable. So, by improving your employee’s experience, the more engaged they’ll become and the more profit you stand to make. 

So how can payroll help you improve this experience?

4 ways payroll can improve your employee experience

Here are four ways you can use payroll to improve your employee experience:

  • making sure salary data is correct every time

  • offering transparent and accessible payslips

  • using payroll data to benchmark salaries and benefits

  • automating manual processes

Learn more about each below:

1. By making sure salary data is correct every time

If pay packets are incorrect, it causes employees unnecessary worry and stress. The question “can I afford to pay my bills this month?” should never cross any employee’s lips — particularly when the reason they’re asking it is you. And with the cost of living crisis and the ramifications of Covid-19 still rife, whether you’ve been underpaid is not a worry you want to add to employees’ plates.

Payroll mistakes happen, particularly when you manually manage this process. Whether it’s underpaying employees or misclassifying them, your payroll process needs to iron out any consistent payroll errors to ensure employees have trust in you that their pay will be correct every month.

2. By offering transparent and accessible payslips

Gone are the days of receiving paper payslips (in fact, only 5% of companies still deliver them this way [PDF]). But organisations need to do more than just offer digital payslips. According to a report by Mitrefinch, 21% of survey respondents found the terminology and information displayed on their payslips confusing.

Therefore, delivering a digital payslip that breaks down important information clearly and concisely is a must. You want to empower employees by helping them understand where their money is going and giving them the information they’ll find useful, such as taken and remaining annual leave entitlement.

Delivering a payslip that nicely breaks down how much they’ve been paid so far this accounting year and other breakdowns of pay gives the employee knowledge.

P.S. Automated payroll software helps you automate the distribution of payslips, so you don’t even have to think about pressing send.

3. By using payroll data to benchmark salaries and benefits

As you’d imagine, paying a competitive salary directly correlates with employee turnover. In fact, Pew Research found that 63% of workers left their jobs in 2021 due to low pay. 

Accurate payroll data can help your organisation benchmark salaries — an essential strategy for hiring the right people. You need to compensate employees fairly; the only way you’ll know you’re delivering fair salaries is by benchmarking against competitors.

It’s important to remember that it’s not just pay that affects employee turnover — it’s the entire employee experience. Other factors include working too many hours (39%), lack of flexibility (45%), and poor benefits (43%) contribute to high employee turnover. 

4. By automating manual processes

Small business owners spend roughly five hours per pay period processing payroll, with 82% stating they manage the process manually to ensure accuracy. But not only is this process time-consuming, you’re also leaving a margin for human error. 

You can automate many payroll components with the help of payroll software, from pay calculations to pension submissions. Automating these all-consuming tasks frees time to spend on more important things like providing data to drive business decisions or focusing on people-first activities like improving your benefits packages or onboarding process.

Don’t wait until things go wrong in your payroll process. Act now to ensure payroll enhances your employee experience consistently, helping you retain the best talent.

See how PayFit automated payroll software can help you — schedule a demo.

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