Impact of Payroll on the Employee Experience

Alex Margolin December 17, 2019

Business leaders often point to employees as their company’s greatest resource. After all, it’s the employees who execute the day-to-day tasks that lead to a company’s success. When employees give their all for the company, the company reaps the benefits. When they feel alienated from its values and culture, their productivity often drops and the company loses out.

Polls consistently support this view. A Gallup poll for example, found that engaged employees have 41% less absenteeism, and show a 17% increase in productivity. That means they come to work more often and get more done when they are there. They also tend to stay with the company, reducing the costs of finding, hiring, and training replacements.

The stakes are even higher for the employees themselves. According to polls on workplace satisfaction, job quality connects directly to their sense of quality of life. When people feel that they are contributing to something important in a meaningful way, they feel a deep sense of satisfaction. When they don’t, they start to shift away from the company in subtle ways, with polls showing they are significantly more prepared to leave their workplace.

The good news is that businesses seem to be moving in the right direction overall. Gallup has tracked worker satisfaction since 1993, and 2019 had the highest rate on record. In fact, the numbers have been rising overall, with 35% saying they were completely satisfied in 1993 to 55% completely satisfied in 2019.

The bad news is that the situation remains highly volatile. There are numerous ways that companies – even those that place a priority on the employee experience – can lose the trust of their best people. Negative touchstones, such as unreliable payroll processes, rarely show up on opinion polls about workplaces, but they can have dramatic effects on employee trust.

Payroll as Key Touchstone  

When Gallup conducted its poll of workplace satisfaction, it asked questions on topics such as job security, compensation, benefits, paid time off, on-the-job stress, flexibility, and workload. Based on those elements, it was able to create a broad picture of employees and their relationships with their jobs.

However, a person’s relationship with his job is not the same as his relationship with his workplace. A company could score high on the traditional measures but still lose the trust of employees if it does not execute in other areas, such as payroll.

People expect to be paid accurately and on time, every time. There are no exceptions. Errors might occur, and steps taken to fix them. But a pattern of mistakes can have many undesirable consequences.

When a company fails to take immediate stops- often because it is not aware of the errors – the consequences can be far-reaching. In many cases, employees count on it to cover their expenses. When errors in payroll occur, it’s employees who face the biggest difficulties. If their paycheck is short, they could face financial difficulties. If it’s high, they could face tax penalties they don’t deserve.

In either case, the employee could lose trust in the company’s ability to handle its part of the work agreement. That lack of trust can turn a motivated and productive employee into an average one, and could bring her closer to leaving the company.  Even a great benefit package may not be enough to salvage the relationship.

Employee Empowerment – Proliferation of Forums

With manual payroll cycles, as conducted by the vast majority of companies today, errors are unavoidable. Their damage, however, may be greater than ever. Employees have more places to turn to complain about negative experiences than ever before.

There are even forums designed specially to help people learn about companies before they apply to work for them. Glassdoor, for example, is a website that tries to help companies and potential employees find each other. As such, it contains a feedback page for people to share their experiences at the company. When feedback is mixed, it’s possible that some of the top end employees simply bypass a company in favor of others that have positive reviews.

There is also the regular chatter that takes place every day on social media sites. A person does not have to make a specific post about a payroll error at his company. It could be enough for that person to make a random comment in response to something a friend says. Even then, that person’s entire social network will be aware of the situation.

The Challenge of a Global Payroll – And its Solution

With a manual payroll process, avoiding mistakes is a constant challenge. With numerous spreadsheets to review and collate and a hard deadline to beat, the chances of human error are always present. And that’s a regular payroll from one country, with one set of labor regulations and one tax code.

In most cases, the company still receives reports from various department heads in different formats, different reporting styles, and possibly even different types of spreadsheets. There is no uniformity in manual payroll.

When a company expands abroad, the complexity of a global payroll grows exponentially. The payroll department has to navigate the same inconsistent reporting, but now has to contend with different languages, different tax requirements – which require different sets of withholdings – different laws about overtime and paid time off, and different currencies.

As the complexity grows, so does the chance of errors seeping into the process. The only solution is to automate the process.

With an automated platform, spreadsheets are no longer necessary. The reports are added directly to the platform. All the information is processed together in a standard format, making it easy to audit and confirm. Cross-border payments are also simplified through an automated platform, which payments going to all the global branches at one time, in their own currency.

With an automated system, payroll is quick and easy, and errors are eliminated. The company can focus on building an engaged and committed workforce.

Papaya Provides Global Payroll Services for Enterprise

Papaya can help your company navigate the challenges of global expansion. The Papaya platform provides a total workforce solution, covering all types of employees, workers, and contractors. It streamlines all employee data into one view, and provides custom Business Intelligence reports to help companies find the information they need about their payroll spending.

The platform combines the best of automation with in-person support from a skilled CSM team, and provides payments throughout the globe in various currencies, all at the same time. Make your global payroll simple, smart, and secure with Papaya Global.