In today's business world, where technology, employee preferences, and global connections come together, businesses need to keep on top of these trends to stay competitive. We'll explore incorporating AI into payroll and adapting to changing economic needs, which we believe will reshape how organisations handle their payroll in the upcoming year.
" Significant changes are underway in how businesses handle their payroll processes. From the integration of AI to the rise of on-demand pay, each trend reflects the evolving needs of the workforce."
7 important payroll trends that will shape 2024:
1. AI-Powered Payroll: Expect more companies to use AI (Artificial Intelligence) in payroll. This means using smart software to do tasks like checking if everything follows the rules, analysing payroll info, and finding pay mistakes. Also, companies might use AI chatbots to help employees with simple payroll questions.
2. On-demand pay: With many employees feeling the squeeze of the rising cost of living, employers around the world are looking for ways to help them manage their finances and stretch their paycheck further. Companies are starting to offer a perk called "on-demand pay." This lets employees get some of their pay before their usual payday. It helps them manage their money better, especially when unexpected expenses arise.
3. Keeping payroll data safe: A recent survey revealed that more than 50% of businesses are planning to increase their investments in security. This includes spending on things like incident response planning, employee training, and threat detection. With more companies dealing with employees from different countries, it's important to keep payroll data safe. Expect more focus on making sure data doesn't get stolen or leaked.
4. Being clear about pay: One of the biggest payroll trends we’ve seen over the past few years is the rising demand for pay transparency — both in terms of legislation and employee expectations. In simple terms, people want to know how much others are getting paid. Some places are making laws to make pay more transparent. This means companies need to show clearly how they decide what to pay people.
5. Changes for contractors: With more people choosing to work as contractors, companies need to update how they pay them. Contractors often prefer getting paid right after they finish a job because their work is usually project-based. Unlike regular employees, contractors have different tax rules to follow when it comes to getting paid. Understanding these rules is important for companies to avoid any legal or financial issues. By adjusting payment practices to meet the needs of contractors and following the right tax rules, companies can build better relationships with independent workers and ensure everything runs smoothly.
6. Getting help with international payroll: It's easier for companies to hire people from other countries now. However, dealing with payroll across borders can be tricky. So, more companies might use outside help from companies providing employer of record services (EOR), like Giant Group, to make sure worker classification is done correctly.
7. Combining HR and payroll systems: Many companies are putting HR (Human Resources) and payroll together into one system. This helps make things simpler for HR teams. They can manage everything in one place, saving time and effort.
In summary, significant changes are underway in how businesses handle their payroll processes. From the integration of AI to the rise of on-demand pay, each trend reflects the evolving needs of the workforce.
Furthermore, as companies expand globally, partnering with external payroll providers like Giant Group can offer essential support in managing international payroll while ensuring compliance and regulations. By staying informed and adapting to these trends, businesses can optimise their payroll processes, enhance employee satisfaction, and drive success.
