The way organizations are doing business is changing, including their payroll management. Technology is forcing companies to become more agile to produce products and services faster, cheaper, and more efficiently, all while transforming the standards by which employees expect to get paid. Machine learning capabilities, the influx of freelancing, and technology trends each have their own implications on the way organizations, their employees, and clients interact and transact.
The world of payroll management is undergoing a shift, and we’ve identified the top trending topics to ensure your organization is ready for what the future of payroll holds.
Artificial Intelligence in payroll management
Chatbots and AI have become so intertwined with casual business processes that it’s almost second nature to interact with a robot daily. Minor transactional tasks can now easily be done by a machine, replacing manual data entry processing. It’s no longer essential for departments within organizations to constantly cross-reference with one another as technology can quickly sort and sift through thousands of lines of data much more efficiently than a human. Chatbots and virtual assistants, like Alight’s Lisa, can quickly answer basic questions for users using machine learning and endless access to databases. This ability to pull employee data at a rapid rate and detect and understand natural language will eventually eliminate the basic needs of data processing and input, transforming traditional payroll management into a job that no longer requires manual contribution—an almost touchless payroll.
Some of these technology products even provide “out-of-the-box” AI efficiencies that could change the way clients buy services and hire talent; no longer will recruiters be looking for call center representatives, but data scientists who can build, integrate and run processes that can leverage historical data to identify and correct anomalies in an organization’s system.
Payment distribution—receiving payroll in real-time
As technology and the use of digital wallets makes immediacy the norm, employees are seeking the advantage of being paid as they earn their wages—that is, receiving payroll in real-time as opposed to waiting for bi-weekly checks or direct deposits. With independent contracting and freelancers on the rise, the concept of continuous pay is coming into play by going up against the typical two-week pay periods during a working month.
Pay Cards, a solution that has been around for some time to service the unbanked is now becoming popular again as an easier means of handling all financial matters from receipt of pay to payment of personal bills.
Concepts such as anytime pay solutions and e-mailable checks are encouraging this trend by making it possible for employees to control when and how they receive their paychecks through their employers. Anytime pay solutions focus on enabling employees the option to be paid for advanced wages as the work is being completed, if needed, instead of at the end of a pay period. This may prevent employees from having no option other than making late payments on personal bills and obligations as the money may not be readily available at the time of need with the standard payroll period pay days.
E-mailable checks aim to make sending and receiving payments possible at the click of a button, eliminating the delay of receiving a paper check in the mail or waiting for a deposit to be available in a bank account. Payments are sent directly through email and can be accessed and printed at the recipient’s convenience, allowing for the immediacy so many employees crave.
The conversation on alternative payroll solutions isn’t a new one. Different means of payment currencies, such as cryptocurrency, are also being considered as an option for paying employees. While not yet readily accepted as currency, it fits well into the digital wallet concept—a fitting direction as we become an even more digitized world.
Shifting to a gig economy and its impact on payroll management
Millennials are dispersing through today’ s workforce, and so are their habits of quickly transitioning from role to role. Gig workers are becoming more common as companies like Uber and Rover make it easier to make money on employees’ own terms. Convenience and flexibility, two valuable benefits employees seek from employers, make freelancing and temporary contracting jobs more attractive as schedules can often be personalized.
This increase in employees splitting time between their permanent employers and additional means of compensation reveals the potential future need of centralized payroll management solutions. Transitioning to a gig economy will increase how many employees will need to be treated as individual contractors, creating complexity behind tax filing status and payroll methods. As the freelance space begins to exceed traditional employment, we may see a shift toward a service offering that will combine a worker’s multiple jobs—gigs—and consolidate their earnings into one form of weekly or monthly paycheck.
Prepping for futuristic payroll
The ways in which organizations hire for and carry out payroll management will continue to shift as technology evolves and processes adjust to accommodate it. Being aware of these trends will assist decision-makers in proactively preparing for payroll transformation and the new ways employers hire and pay their employees—it may come a lot sooner than we think.