There is little doubt among business leaders about how important it is to build a winning culture and highly performant team. Employee experience impacts nearly every aspect of an organization’s culture, influencing everything from reputation to bottom line performance.
A white paper by the IBM Smarter Workforce Institute, in partnership with the Workhuman Analytics & Research Institute, analyzed companies across the globe. Organizations that ranked in the top 25% of employee experience boasted nearly three times the return on their assets (people) and doubled their return on sales. In addition to the challenges of finding the right talent and building a world-class culture, the broader challenge is being able to find actionable strategies to improve the employee experience.
This very quickly becomes a nebulous concept when global companies are offering things like unlimited time off, perks for travel, and free food. That said, in the context of employment, the most important driver of employee experience will always be compensation. There are countless intrinsic and extrinsic motivations for employees, but payroll is the primary metric for a positive experience. Bottom line: money talks. Leaders need to be armed with actionable insights and data to make informed decisions. This is only possible by having one unified view into your global payroll reporting, which becomes problematic when payroll is run differently across various vendors and countries.
Accurate Reporting Needs Accurate Payroll
Payroll is a massive part of global operations, but it is frequently overlooked in the context of employee experience. Employees have a much higher tolerance when it comes to other aspects of culture. Nothing, however, is as sensitive as payroll. Employees don’t just expect to be paid the correct amount, at the right time, they demand it. Despite the importance of payroll, there are very few organizations that have prioritized payroll as a critical function. To date, manual data entry is the culprit for nearly 50% of all payroll errors.
Despite the amount of multi-country, global payroll solutions as of 2021, only 36% of organizations were using a cloud-based payroll solution that integrates with their human capital management (HCM) system. Gartner forecasts that by 2025, 65% of global midmarket and large enterprises will have invested in a strategy to unify multi-country payroll using no more than three separate vendors.
Having the right tools in place is a vital aspect of processing payroll accurately. However, that is only one aspect of ensuring your organization has mechanisms in place to protect your employee experience. The other piece is having global visibility into reporting and analytics in just a few clicks. Manual intervention is a cause for errors on the payroll side, but global reporting is often left to manually compiling reports. Few, if any, global companies run payroll the same way with the same vendor in 100% of the countries in which they operate, so payroll needs to find a way to provide comprehensive global reporting to their organizations.
The keyword here is comprehensive. When leaders can confidently understand inequities driven by gender, geography, and individual pay elements, it gives them the power to protect the employee experience. Despite the complications of juggling multiple office locations, several in-country partners and employees all over the world, running payroll in multiple jurisdictions should not get in the way or complicate your ability to consolidate and analyze your employee data in one place.
Close Gender Pay Gap Once and for All
Implementing a cloud-based payroll solution provides transparency and documentation when addressing pay equity issues. But having the ability to rapidly report on fluctuations or gaps in gender is the first actionable step. When analyzing the numbers, there are massive inequities when it comes to equal pay. In two of the world’s leading economies (e.g., United Kingdom, United States), women are paid 90 pence for every £1 earned by men, and 82 cents for every dollar paid to men. This creates a large pay chasm, which dramatically impacts a woman’s quality of life.
Western economies are not the only examples of gender pay gaps either. As referenced in The World Economic Forum’s Global Gender Gap Report 2022, women face pay disparities all over the world, and most of the figures are shocking. Women earn 63.4% of what males are paid in the Middle East and North Africa. The statistic climb slightly higher to approximately 69.1% in Eastern Europe and Central Asia. Full parity will not be realized, even on the pathway of progress the world is on, for 132 years. Adding further context to these percentages, when considering the discrepancy in wages, lack of advancement, and diminished pension contributions, a woman will earn approximately $850,000 less than a man over a 40-year career.
Achieving pay equity based on gender has an exponential impact. Beyond the retention and wellness metrics, it ensures compliance with various equity laws in countries that mandate such reporting (e.g., the U.K.’s gender pay gap regulations). Equity helps you attract top talent by offering an analytics-based assurance of equal pay for equal work. Lastly, it enhances your organization’s reputation on such social issues connected to diversity, equity, and inclusion.
Acting and establishing measures is one side of the equation; tracking and analysis is the other. Without relevant data and metrics, organizations cannot focus their resources and see positive change. Having the ability to see the data is nearly step one. Organizations that have yet to implement a cloud-based, global-managed payroll system do have options for software-as-a-service (SaaS)-based reporting platforms.
Equitable Pay, Financial Wellness Are No Longer Nice-to-Haves
The last two years have been extremely trying. Businesses have had an unprecedented level of adversity and obstacles, including recessions, resignations, a pandemic, and the list goes on. This has created a ripple effect in how organizations approach both operations and workforce management. PwC research has identified that the workforce is both the leading risk to growth and the principal means by which companies can execute growth-driven strategies. As mentioned above, there’s no question that talent is the key driver of business success—and potential failure. So, how do organizations protect themselves?
Employee engagement is not as easy as company-wide meetings, water cooler conversation, and travel and entertainment budgets. As inflation soars, and the world becomes more and more connected, talent is largely being driven by financial wellness. Workers are feeling the burn, as they are also leaving the workforce altogether for a break to recharge their batteries. Financial drivers and the confidence of having an opportunity when they decide to return shows that workers feel empowered by their current circumstances. More than one-third of respondents plan to ask for a raise in the coming year. One in five said they are extremely or very likely to switch employers. This is a very real hurdle that employers must address.
On the job hunt, employees are not just measuring salary, perks, and benefits. They are also weighing payroll services and ownership over their financial wellness as a value-add. According to PwC’s 9th Annual Wellness Survey, 54% of workers who were polled said financial matters were their leading cause of stress. This becomes an even more powerful statistic when considering that a Bank of America Study finds that 84% of employers now say offering financial wellness tools will increase employee retention.
Payroll is one of many components that companies can offer support. Paycheck insights and a unified approach to payment, irrespective of where an employee is being paid, is a big start. Having the ability to provide a consistent employee experience across the globe while giving full autonomy to employees to view their payslips is a big driver of wellness. What might be considered a small feature goes a long way in providing financial control to employees.
The responsibility and onus are on the company to support employees and offer visibility into the following areas:
- ●Thorough breakdown and outline of any (and all) deductions
- ●Explanation of services that might be covered or partially paid by an employer each month (e.g., health care benefits)
- ●Tracking of pension/retirement contributions
Payslips and confirmation emails on payday can also be a fantastic way to include messaging regarding financial wellness initiatives. Leveraging payday can be particularly effective as economic issues are top of mind. Employers that are proactive about financial wellness will be winners in attracting and retaining talent.
How Data Gives Power to Create Own Destiny
A famous British physicist and mathematician once said, “what cannot be measured cannot be improved.” This could not be more relevant when it comes to proactively making changes and improving your employee experience. Onboarding a fully-managed, cloud-based, global payroll platform helps eliminate errors and minimizes manual intervention.
However, for organizations not ready to onboard a fully managed solution, explore a SaaS-based reporting solution like One View. This software lets your payroll specialists do what they do best—process payroll their way. Prevent reporting from being an afterthought and equip the team with the reporting tools they need. Shorten onboarding time from years to months and begin making actionable decisions to your business.
To further understand how to improve employee experience through global payroll and reporting, navigate this link to view more context and statistics. Also, to explore a fully integrated payroll solution, visit Immedis.com.