Payroll Positions Employees To Take The Lead On Payday Accuracy

Payroll errors are a surefire way to displease employees, and at a time when professionals have ushered in an era of mass resignations and job-switching, employers must do what they can to retain their talent.

While payroll FinTech has driven significant innovation in the space, there remain several longstanding paradigms that can create friction for employees. Among them is the practice of completing payroll without the involvement of the employee themselves, a workflow that Paycom Vice President of HR Jennifer Kraszewski said can cause all kinds of headaches.

In a conversation with PYMNTS, Kraszewski explored the value of a self-service approach to payroll and how shifting the payroll process away from decades-old patterns can help employers align the way they compensate workers in workflows in other areas of human resources, expense management and more.

Employees Take the Lead

The most pressing challenge with HR-directed payroll is that employees are only able to view their paycheck and related data once payroll has already run. That means any adjustments to wages, benefits and expense reimbursements have already been completed before an employee was ever able to identify any potential issue.

“Employees lacked the ability to attempt to remedy any errors that might lead to incorrect payroll amounts,” explained Kraszewski, pointing to mistakes like incorrect hours tracked or missing expenses as key pain points for professionals.

Those mistakes can be costly, and not just for the workers themselves. A 2017 report from The Workforce Institute at Kronos found that 49 percent of professionals would begin to look for new employment after just two payroll errors.

Four years later, the pressure on employers to keep their teams intact has only increased amid what experts are calling a “Great Resignation.” As more professionals seek higher wages and more valuable benefits, employers are struggling with a labor shortage that analysts say may not ease up until the fall.

In the meantime, employers cannot risk making errors in payroll — and losing key talent as a result.

Redirecting The Data Flow

As Kraszewski explained, by positioning employees to take control of payroll data, the burden on HR and payroll departments is lifted. While that burden is then repositioned onto the employee, she noted that professionals could see less time wasted.

“Doing your own payroll is much more time-efficient compared to chasing down HR or payroll after payday, when employees notice a missing expense reimbursement or mistake,” she said, adding that a self-service approach to payroll is aligned with strategies in other areas of human resources.

“When you think about it, employees already manage their timecards, benefits, expenses [and] vacation requests — basically every important HR task that makes up payroll,” she said.

This is the thought process behind Paycom’s new solution, Beti. The tool provides a guide for employees to enter key payroll data and review paychecks before payroll is ever run, providing the opportunity to proactively address any issues or errors. Employers, meanwhile, retain control of how much employees are paid to promote compliance, security and transparency, while mitigating the risk of fraud.

A self-service strategy is the latest in a string of efforts to disrupt payroll traditions, including the weekly, bi-weekly or monthly payroll cycle, and frequent use of physical paper checks. Increasingly, payroll innovation is being fueled by the employees themselves, who are seeking greater flexibility in the timing and method of payment.

It is possible, however, that some employees may feel skeptical about being given yet another task. Such a pain point has largely been the motivation behind reducing the burden on employees in other self-service areas, like expense management, in which organizations are switching to corporate card and spend management tools to negate the need for workers to build and file their own expense sheets.

But for professionals that have experienced payroll issues — such as late or inaccurate pay — having the opportunity to review payroll before payday can be vital to remedying personal cash flow problems before they arise.