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Payroll might not always get the spotlight, but it plays a powerful, crucial role in shaping how valued and appreciated employees feel at work.
This month was National Employee Appreciation Day (March 7th), which makes it a fitting time for businesses to review their payroll processes and make sure they’re up to scratch. It's also important to consider how these practices can go beyond the basics to foster a positive and supportive work environment. Employee satisfaction goes hand in hand with how an organisation approaches payroll, so here’s how smarter payroll practices can have a real impact on employee appreciation.
Understanding the importance of smart payroll practices
The job market of today is highly competitive, and many employees are seeking value and recognition for their hard work.
Payroll is an area where this recognition becomes tangible. An employee-centric payroll system offers businesses the opportunity to improve employee appreciation initiatives by embedding smart practices that prioritise employee needs first and foremost.
The role of accurate, timely payroll
At the heart of any effective payroll system is accuracy and timeliness. When employees know they will be paid correctly and consistently, it builds trust and reliability, ultimately leading to a positive relationship between them and their employer. On the other hand however, delayed or incorrect payments can result in frustration, which impacts productivity levels and can even lead to staff leaving to seek the opposite.
It’s absolutely essential to pay employees accurately and on time. Not only is it a legal requirement, it's also a way of showing employees that they’re valued. When paychecks are delayed or wrong, around half of employees experience stress and worry with their finances put at risk. That’s why it’s so important to ensure a consistent pay schedule that helps employees manage their income and outgoings effectively. The outcome for businesses? A happier, more engaged workforce that’s more likely to stay committed to the company.
Flexible options
Flexibility is becoming more popular amongst workers than ever before, giving them a greater sense of control over their earnings. This is where Earned Wage Access (EWA) and same-day pay schemes comes in.
Earned Wage Access (EWA) is a game changing payroll trend that benefits both employees and employers, allowing employees to access a portion of their earned wages before payday, helping to reduce money-related stress, at the same time as improving morale and enhancing job satisfaction. In the context of employee appreciation, EWA acts as a tool to show trust and care for employees’ financial health by offering them some flexibility.
Same-day pay is another flexible pay model, providing immediate access to wages on the same day they are earned. This is particularly beneficial for employees facing urgent financial needs or those who simply prefer more frequent payouts. By doing this, businesses can demonstrate appreciation for their employees by giving them control over their earnings and ensuring they’re supported when it matters most.
Payroll-derived benefits
Smart payroll practices go beyond just salary, they include extra perks that make employees feel valued and appreciated. These benefits provide employees with a real sense of value and reward for their contribution to the company. Some of the most common payroll-derived benefits include:
Salary sacrifice schemes: Salary sacrifice schemes allow employees to give up a portion of their salary in exchange for non-cash benefits such as additional pension contributions, childcare vouchers or gym memberships, helping to support the things that matter in their lives.
Bonuses: Performance-based or 'spot' bonuses are a great way to reward hard work and keep employees motivated. By linking these bonuses to specific achievements or milestones, businesses create a culture of recognition that encourages employees to keep giving their best.
Profit-sharing: Profit-sharing schemes allow employees to receive a share of the company’s profits, giving them a direct stake in the business’s success. This can help employees feel more connected to the company’s goals and rewards them for contributing to its success. It helps businesses demonstrate that they value their employees' contributions and are willing to share the rewards of the company’s prosperity.
The role of managed payroll providers
While businesses can implement some of these payroll practices themselves, working with a managed payroll provider helps ensure error-free and compliant payroll administration. Phase 3 can help companies stay on top of the latest trends in payroll technology, from EWA to salary sacrifice schemes, and implement them seamlessly. Just give us a call to find out how we can support you.
