Top 5 Payroll Trends To Watch Out In 2024

Amaey Anand

Senior Writer

Top 5 Payroll Trends To Watch Out In 2024

Key Takeaways:

  1. Embrace AI-driven payroll solutions to boost payroll efficiency, enabling accurate calculations and data processing.
  2. Address employee expectations by embracing on-demand pay options and aligning with the growing demand for personalized and timely compensation.
  3. Prioritize pay transparency to build trust and meet the increasing demand for openness in compensation structures.
  4. Stay vigilant on global compliance requirements as the workforce becomes increasingly international.

In the 1970s and 80s, there were no tools or technology for payroll processing; everything was done manually. However, a recent survey by Deloitte found that 57% of organizations are currently using automation for payroll, with an expectation of this number reaching 80% by 2025.

Looking for Payroll Software? Check out SoftwareSuggest’s list of the best Payroll Software solutions.

What does this mean? The payroll industry is continuously evolving, just like other sectors. This also means that as an HR professional, you must keep up with the changing global payroll trends to ensure compliance with regulations.

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Pro-tip

Stay ahead in 2024's dynamic payroll landscape by integrating AI-powered tools, embracing modern payroll solutions, adapting to on-demand pay expectations, and prioritizing pay transparency. Additionally, regularly update your skills and processes to steer these payroll industry trends successfully in order to ensure compliance and efficiency in an evolving payroll culture.

Top 5 Global Payroll Tends In 2024

Let’s examine the top 5 payroll trends that we may see in 2024, which could significantly change the payroll landscape forever.

1. Adoption of Technology

The first major change in the payroll trend that we expect in 2024 is the extensive adoption of technology, like modern payroll software, by companies of all sizes. This is because, in 2024, tech isn’t just an option; it’s becoming essential for businesses of all sizes to stay competitive and efficient.

Benefits of cloud-based HR technologies By SoftwareSuggest

But why the sudden tech surge?

It’s simple: businesses are realizing the immense value technology brings to the table. A recent study by the American Payroll Association revealed that 68% of organizations plan to increase their technology investments in payroll by 2025.

This shift isn’t just a trend – it’s a necessity in today’s fast-paced, data-driven world.

Here are some key areas where we will see major adoption in 2024:

  • Cloud based payroll software: Cloud payroll solutions offer anytime, anywhere access, automatic updates, and enhanced security. All these factors make cloud payroll systems a game-changer for companies of all sizes.
  • Artificial intelligence (AI): AI is no longer just science fiction – it’s revolutionizing payroll! From automating repetitive tasks like data entry and calculations to identifying potential errors and compliance risks, AI is set to become an invaluable asset for payroll professionals.
  • Machine learning: Similar to artificial intelligence (AI), machine learning algorithms can analyze vast amounts of payroll data to uncover trends, predict future needs, and personalize employee experiences.
  • Mobile-friendly solutions: In today’s fast world, employees expect convenience. Mobile payroll apps allow them to access pay stubs, request time off, and manage their benefits anytime, anywhere.

In a nutshell, the adoption of modern payroll solutions is going to be one of the major global payroll trends that we will witness in 2024.

2. On-demand Pay

Forget about waiting two weeks (or even a month!) for your paycheck. In 2024, the traditional pay cycle is undergoing a major makeover with the rise of on-demand pay, also known as Earned Wage Access (EWA).

This innovative trend allows employees to access a portion of their earned wages before the official payday.

But why is this buzz on the rise?

Well, 55-63% of American workers live paycheck to paycheck, often facing financial stress between paydays. On-demand pay empowers all these workers to manage unexpected bills, avoid predatory loan sharks, and take control of their finances.

It’s a win-win– employees feel more financially secure and valued, leading to increased productivity and reduced turnover for employers. However, it’s essential to note that on-demand pay isn’t just about convenience; it’s also about financial wellness.

Here are some key stats that explain the reasons behind the rise of on-demand pay:

On-demand Pay By SoftwareSuggest

So, is on-demand pay just a trend or the future of payroll? The signs point to the latter. As the demand for financial flexibility grows, expect more and more companies to embrace this innovative trend.

3. AI-based Payroll Management

Remember that robot assistant from your sci-fi movies? Well, in 2024, it’s not fiction anymore. Artificial intelligence (AI) is rapidly transforming payroll, automating mundane tasks, and streamlining processes like never before.

Here are the five reasons why we think AI will be one of the most groundbreaking HR payroll trends:

  • Efficiency: AI doesn’t need coffee breaks or sleep. It works tirelessly, automating tasks such as data entry and calculations. This benefit has also been established by a recent study from the McKinsey Global Institute, which found that AI can automate up to 40% of routine payroll activities.
  • No Room for Errors: Payroll errors can be costly and stressful for both employers and employees. AI-powered solutions can analyze vast amounts of data and identify inconsistencies with incredible accuracy. A study by Deloitte found that AI can reduce payroll errors by up to 80%, saving businesses an average of $3,000 per year.
  • Cost Efficiency: Investing in AI for payroll might seem daunting, but the long-term benefits outweigh the initial costs. A study by PwC revealed that AI can help companies reduce overall payroll processing costs by 15-20%, freeing up valuable resources for other crucial areas.

Automation in HR operations By SoftwareSuggest

  • Time Saver: AI not only ensures more seamless payroll processing but also helps you save time by automating repetitive tasks like data entry, calculations, and compliance checks. This will allow payroll departments to focus on more strategic aspects of their roles. Research by Gartner also concludes the same, stating that AI can help reduce the time spent on payroll processing by up to 50%.
  • Enhanced Security: Data security is paramount in today’s digital landscape. AI-powered solutions can implement robust security measures and proactively identify potential threats. A report by Accenture found that businesses using AI in payroll experience a 30% reduction in security incidents, protecting sensitive employee data from breaches.

Considering all these benefits of AI in payroll, we are certain that AI-powered payroll management will be one of the major global payroll trends in 2024.

4. Pay Transparency

Remember that awkward moment when you and your colleague whispered salary ranges during lunch? Well, in 2024, those hushed conversations might become a thing of the past.

Pay transparency is increasingly gaining popularity, with many companies choosing to shed light on their salary structures.

Pay transparency statistics 2024 By SoftwareSuggest

This shift towards openness isn’t solely about numbers; it signifies a cultural change within workplaces. But why this shift? In our opinion, multiple factors are at play:

  • Employees demanding fairness: A 2023 study by Glassdoor found that 70% of employees believe companies should be transparent about salaries, with 44% stating it would improve their trust in their employer.
  • Legislation pushing for openness: Several US states, like California and Colorado, have enacted laws requiring companies to disclose salary ranges in job postings. This trend is expected to continue, advocating for more national transparency.
  • Building a competitive edge: Openness about pay can attract and retain top talent, especially younger generations who value fairness and ethical practices. A study by PWC revealed that 77% of Gen Z applicants consider pay transparency important when evaluating job offers.

At this point, it is crucial to understand that this trend isn’t just about revealing individual salaries but also about sharing the company’s overall compensation philosophy. This openness helps employees see the bigger picture, aligning their goals with the organization’s objectives.

Similarly, companies embracing pay transparency are likely to enjoy better employee engagement and retention. This is because when employees feel recognized and fairly compensated, they are more motivated to contribute to the company’s success.

All in all, pay transparency is poised to be one of the key global payroll trends in 2024.

5. Alignment with Global compliances

The world of business is shrinking, and payroll is no exception. As companies expand internationally, navigating the complexities of global payroll compliance becomes crucial. For this reason, we believe that aligning with global compliances will emerge as one of the critical payroll trends in 2024.

Some of the major reasons we think will contribute significantly to this trend are:

  • Rising global workforce: The number of remote workers crossing borders is expected to reach 36.3 million by 2025, according to a study by UpWork. This surge in international talent as well as independent contractors necessitates compliance with diverse regulations.

Best countries for remote working By SoftwareSuggest

  • Intensified scrutiny: Tax authorities worldwide are tightening their grip on payroll compliance, increasing the risk of penalties for non-compliance. A 2023 EY report revealed that 71% of global businesses faced tax penalties in the past year, with an average cost of $1.7 million.
  • Protecting your brand: Failing to comply with global regulations can damage your company’s reputation and lead to legal repercussions. Transparency and responsible business practices are essential for global success.

This payroll trend also implies that in 2024, we will have more advanced global digital payroll systems capable of keeping up with diverse laws and regulations, saving companies from legal hiccups, hefty fines, and bad reputations.

Conclusion

As we can see, the payroll landscape will undergo a major overhaul in 2024. Some of the major reasons include AI-powered tools, the rise of on-demand pay, and increased demand for pay transparency. This means that in order to keep up with these latest trends in payroll management, you need to continually update yourself with the latest challenges and embrace the new payroll culture.

Frequently Asked Questions

In 2024, we can expect increased adoption of AI payroll solutions, emphasis on global compliance, integration of on-demand pay, and enhanced pay transparency.

The latest HR payroll trends focus on tech integration, AI-powered efficiency, on-demand pay, transparency, and global compliance. Overall, they reflect a dynamic shift towards advanced and employee-centric payroll practices.

Global compliance will be a crucial aspect of payroll industry trends in 2024 because it ensures adherence to diverse regulations. This eventually mitigates risks and develops responsible business practices on a global scale.

Businesses can adapt by prioritizing technology integration, embracing AI payroll tools, offering on-demand pay options, ensuring pay transparency, and staying informed on global compliance requirements.

AI revolutionizes payroll by enhancing efficiency, automating calculations, and reducing errors. In simple words, the integration of AI-driven tools ensures accurate and streamlined payroll processes.

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