Pay Transparency: Handling Senselessly Will Cost Businesses Their Employees
October 7, 2022
Late payment or unclear payslips can trigger employees to quit their job. Hence, Payroll outsourcing services are considered an effective solution for businesses to tackle this issue.
An unclear and non-transparent payroll is where ”break-up” starts
Financial security is one of the employees’ motivations to do their best at work. The slightest payroll errors would confuse and dampen morale among employees since they care about on-time and transparent payments. 51% of 1,000 employees who responded to Bequom’s survey shared that they would switch companies to one with more pay transparency. This demonstrates the importance of the pay transparency policy in attracting and retaining talent nowadays.
According to HR experts, an unclear and non-transparent payroll process not only affect trust and internal unity but also cause some legal regulations issues. Mr. Jack Nguyễn – Deputy CEO of Talentnet provided two main reasons why businesses still make mistakes even when they deeply understand the problems which are payroll practitioners shortage and the investment they need in building a methodical, professional payroll system.
Effective solutions for businesses
In order to provide a transparent and on-time payroll process, businesses first need to deal with a great administrative workload that includes: keeping labor records; processing manual data, complying with and paying labor tax, data security and fraud prevention, etc.
For SMEs, it is difficult for them to handle all the workloads mentioned. Making an immediate investment in finance, technology, and manpower is also an impractical solution for these businesses. Meanwhile, large companies tend to focus more on developing the company’s business strategy than building and maintaining a payroll system. More than that, payroll outsourcing services also help ensure accurate, timely, and transparent payroll processes, as well as support businesses in responding to questions about salary, insurance, etc. Some professional payroll outsourcing services can also provide businesses with new salary trends and update on labor laws and legal regulations.
Businesses gradually realize the positive effects that outsourced payroll services have brought to their business. In 2021, the revenue of outsourced payroll services reached 8.6 billion USD globally and is expected to reach 11.5 billion USD by 2027.
Mr. Jack Nguyễn shared: “The number of businesses choosing to outsource payroll services will increase over time and “’liberate” HR from the administrative workload. Once the workload is reduced, SMEs can focus on strategies for the company, not just retaining talents.”
For employees, outsourced salary payroll services ensure a pay transparency policy, which makes employees feel safe and understand the value of their contributions. The HR department can put more effort into taking care of talents, listening to their career expectation, and investing more in building professional skills for them. These factors contribute to strengthening the connections between businesses and employees.