How global payroll affects employee morale

Paying employees accurately and on time is a key requirement for keeping them happy and engaged. But the role payroll plays for employee engagement and morale goes well beyond this simple needs-fulfilling function of getting everyone paid.

Payroll should be seen as a strategic asset for businesses which they can leverage to foster engagement and boost their employees’ morale. Especially for organizations with globally distributed teams, payroll can be an important enabler for smooth pay processes and a key contributor to elevating the overall employee experience.

How does global payroll affect employee morale? What are potential negative repercussions on employee experience and engagement if international payroll processes are non-standardized and disrupted? What should an organization’s global payroll set-up look like so that it can foster motivation and engagement?

Payroll plays a crucial role in creating a positive employee experience which, in turn, is crucial for keeping up employee morale. A negative workplace experience naturally weighs down on an employee’s engagement at work and might ultimately negatively impact his or her loyalty towards the company, resulting in employee attrition and increased turnover rates in the long run.

Employee experience drives engagement and boosts morale. And payroll is an important contributor when it comes to creating a positive experience for employees. Elevating the employee experience, however, is becoming increasingly challenging for businesses. That’s because employee expectations are growing.

Growing demands and expectations make it difficult to keep employees happy. Their expectations towards work encompass a wide range of aspects, including financial stability and wellbeing, professional fulfillment, workplace inspiration, corporate culture, and recognition.

Payroll, or global payroll, is the process that ensures that employees get paid for their work, which enables them to fulfill their most basic needs. By ensuring accurate and timely payments, payroll plays a crucial part in installing psychological safety in employees, which is an important prerequisite so that employees can be productive.

Creating a digital experience that matches the standards they are used to from their private life is yet another factor that businesses should take into consideration when evaluating the impact global payroll has on employees.

In the digital age, it’s completely normal to order food in a couple of seconds from our phones or manage our finances online. So employees expect their employers to recreate the same level of digital experience in payroll and HR.

Before looking at the different ways businesses can leverage their global payroll to boost employee morale, let’s shed some light on the negative impact a mismanaged international payroll can have.

Disrupted payroll experience due to disconnected systems

Disconnected payroll systems can negatively impact employee experience. The reason behind this is that disconnected systems prevent organizations from providing a unified payroll experience to all their employees.

Also, a decentralized global payroll with different subsystems increases the likelihood of payroll errors and is more time-intensive in terms of maintenance and management, which means that there is less time for payroll-related employee queries.

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Inaccurate payments due to currency exchange and payroll errors

Timely and accurate salary payments are crucial for putting employees at ease, safe in the knowledge that their paychecks will arrive on time so that they can pay their bills. The problem with global payroll is that payroll errors are far more likely due to its complexities.

Another aspect to consider in this context is that exchange rate fluctuations can lead to differing amounts on paychecks. And while it isn’t impossible to correct payroll errors, it’s hard to repair the damage inaccurate payroll can leave on the employee-employer relationship.

Incorrect paychecks can give employees the impression that they are not being valued and that the company doesn’t care about their wellbeing. In fact, payroll being wrong or late knocks employees’ confidence in their employer’s ability to ensure their financial wellbeing, with detrimental consequences. A study led by UKG revealed that 49% of employees will look for a new job after two incorrect payroll cycles.

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Now that we’ve looked at the negative side of things, it’s time to explore the potential of global payroll for boosting employee morale and job satisfaction. A well-managed, unified global payroll can help businesses improve employee morale in several different ways.

For instance, by reducing financial stress, creating a more positive work environment, making employees feel respected and valued, and by giving employees more autonomy and access to their payroll.

AI-powered payroll checks for greater accuracy

The use of AI in payroll and HR is rapidly growing. One way of harnessing artificial intelligence to improve global payroll operations is to implement AI-powered payroll checks to reduce payroll errors and increase payroll accuracy. Payroll accuracy, in turn, helps keep employees happy in the knowledge that they will receive the correct amount of pay month after month.

Digital global payment solutions for greater flexibility

Timely and accurate salary payments are essential for ensuring the financial security of employees. Automated payouts can help reduce financial stress by ensuring that salary payments will hit employee bank accounts on time.

Businesses that want to take this one step further should look into diversifying their payment methods to not only ensure timely payments but to also provide their employees with greater financial flexibility.

By introducing flexible payment options, such as Earned Wage Access (also known as On-Demand Pay), businesses can show their employees that they are looked after, which increases their loyalty towards the company and motivates them to give it their best at work.

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Employee self-service functions for more autonomy

Self-service functions for employees are yet another great way of leveraging global payroll to create a positive employee experience and foster employee morale. A self-service portal can be used to give employees the possibility to accomplish certain HR and payroll-related tasks themselves, such as updating personal information and bank details or accessing and viewing payslips.

This creates a greater level of autonomy which is valued by many employees. Also, by letting employees carry out simple administrative tasks themselves, HR and payroll teams gain more time to engage in more important tasks and address more complex employee queries regarding payroll.

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Unified global employee payroll portal for a great digital experience

Enabling self-service functions for employees not only gives them greater autonomy, but it also enhances the overall digital experience. By digitizing employee-facing payroll processes, businesses can ensure that the payroll experience matches the level of digitization employees are used to from their private life.

The first step is to consolidate all things payroll in a single platform, which creates a seamless and positive experience for employees. In a next step, the payroll portal should be made available in the form of an intuitive, easy-to-use mobile application—maybe even complete with an AI chatbot that can answer basic payroll-related questions employees might have.

Streamlined processes for better employee payroll support

A positive global payroll experience for employees stands and falls with the provided payroll support. In order to enable the payroll and HR team to offer employees the best support possible, businesses need to streamline their processes and replace time-consuming manual tasks.

This can be achieved through a unified global payroll solution that leverages payroll automation to maximize efficiency and standardizes processes across geographies as much as possible. As a result, the payroll and HR team has more time for going after value-creating initiatives that can help improve employee morale and reduce frustration in payroll.

Global payroll analytics for fair compensation and better planning

Another way of using a global payroll solution for making a positive impact on employee morale is the use of global payroll analytics. Analyzing global payroll data can help ensure pay equity and fair compensation practices which, in turn, make employees feel more valued.

With access to consolidated global payroll reporting, businesses can leverage the strategic potential of payroll and utilize their payroll data to improve their people strategy and implement strategic workforce planning. Critically reviewing overtime hours, sick leave, and other related metrics can indicate potential workforce problems which can then be solved to enhance employee wellbeing and boost morale.

Global payroll can be an important driver for employee morale and engagement. But for this, a business’s global payroll set-up must fulfill certain requirements. These requirements include:

• Centralization,

• Standardization, 

• Automation,

• Consolidation,

• Integration,

• Employee self-service capabilities, and

• Multi-currency support.

The easiest way for businesses to achieve this is to invest in a global payroll solution that brings together technology and global payroll expertise.

With Lano’s global payroll solution, businesses get access to global payroll services across 170+ countries and a global payroll consolidation platform that comes with a built-in global payments solution for frictionless payments in 28 supported currencies.

Streamline your payroll operations across geographies and make sure that your international team receives the employee experience they deserve. Book a demo with one of our payroll experts to learn more.