As we enter the fourth quarter of our fiscal business year, patterns for 2019 are starting to develop. How can we make next year more productive than this one?
Several trends for payroll process improvements and predictions were highlighted during National Payroll Week 2018.
Here is our recap of some of the most notable trends.
Daily pay options are top of mind for payroll professionals
A recent survey, conducted by Paychex, Inc. in recognition of National Payroll Week, revealed payroll priorities organizations plan to implement within the next year.
The study revealed the following five payroll priorities:
- Offering direct deposit – 27%
- Providing electronic pay stubs – 15%
- Offering smartphone access to payroll information – 11%
- Extending daily pay options – 10%
- Outsourcing payroll – 10%
Not only is it clear that taking payroll into a digital world is on the radar more than ever, but it’s also interesting to note that 10% of respondents believe adding a daily pay option is a top five priority.
By offering a daily pay option, employers could potentially save money on payroll by running it less often, but still allowing employees to tap into their earned but unpaid income at their discretion. Daily pay options are also proven to improve the employee experience, which according to many speakers at the 2018 HR Tech Conference held in Las Vegas earlier this year, is the key toward successful recruiting, retention, and employee engagement.
More and more companies are moving away from paper checks
During National Payroll Week, we polled a handful of business owners to learn more about their payroll process. From our poll, we learned most companies have less than 10% of employees on paper checks. Companies with rates higher than 10% are actively finding ways to minimize the expense and hassle that comes with paper checks.
One respondent of our survey claims she saves $.47 per employee, each payroll, with direct deposit payments. At a company of 500 people, that’s a cost savings of $235 each payday. On a bi-weekly pay schedule that’s approximately $6,000 cost savings each year.
Another respondent said the cost difference was as high as $2.00 per employee at their organization, which equates to $26,000 cost savings each year.
Paper checks cost more than money, too. Donna Michele, CPP, with St. Peter’s Health Partners who completed our survey told us that “cutting paper checks takes their organization more than two hours of extra time per pay period.”
Because DailyPay is only available to employees through direct deposit, companies that offer the benefit have an uptick in employees who opt into the program. We heard from Brandi West, Office Manager for ROI Call Center Solutions, who said, “More employees have opted into direct deposit by enrolling in DailyPay. That means less people coming to the desk to pick up checks, allowing us more time to work on our other needs.”
(A DailyPay partner tweeted to show off her National Payroll Week care kit – a coffee mug, stress balls, a privacy door hanger, and a PayDay candy bar. Want one for yourself or someone on your team? Email email@example.com)
Completing payroll — accurately— is a highlight
More than half of the participants in our poll suggested that their favorite part of payroll is completing it on-time and knowing that everyone was paid correctly. On the flip side, one of the biggest frustrations with payroll was guaranteeing accuracy. Many respondents said that finding errors on a timecard or getting employees to fill out their timesheets correctly the first time is a nuisance to their process.
Even though the majority of respondents claim only 1-10% of employees have payroll errors each pay period, corrections can take anywhere from one to 10 minutes to correct.
When working under time and/or budget constraints, every minute counts. As such, more than half of DailyPay respondents say that on a scale of 1-10, they experience a stress level of eight or higher when running payroll.
Eliminating or decreasing that stress, whenever possible, is a huge win for a payroll department.
Modern payroll advance requests are changing
According to The Society for Human Resource Management (SHRM), the number of organizations that offer paycheck advances has remained mostly unchanged over the last five years. However, the process of handing them out is getting a makeover.
Paycheck advances have gotten a bad rap over the years, they are difficult to regulate, and compliance issues abound. Not only are labor laws and tax codes often mistakenly violated when payroll advances are given, but the perk can also be a burden on your payroll department depending on the volume of requests.
Historically, an employee would ask for an advance, and the employer would grant the request up to a pre-set limit, typically 50% of the employee’s pay. New technology has made it so that employers can offer a “paycheck advance” by way of granting access to one’s earned by unpaid income without the administrative burden. There are fewer compliance issues, and less regulating who within the organization is eligible for the benefit.
We don’t celebrate payroll professionals enough
Payroll can be a thankless job, though every employee depends on it. We think it’s time to start acknowledging the hard work these dedicated professionals put into getting everyone paid. And the professionals think so too.
In honor of National Payroll Week, we sent care kits to the payroll pros at our partner companies. The response we received back was touching. One email we received said:
“I received the box with the AWESOME gifts in it for payroll week. I love the “DO Not Disturb” door sign…I will get good use out of that 🙂 I just wanted to say THANK YOU!! I do the payroll at (regional hospital) and NO ONE has ever recognized me or National Payroll week here. Every other week gets BIG recognition 🙁 I LOVE it all.”
Thanks for your hard work. We know how much heart goes into the payroll process day in and day out. So, let’s make #5 a trend for the years to come.
Are you ready to hop on board with 2019 trends?