With advancements in technology, the adoption of artificial intelligence software, and the ever-changing workforce, it’s an ideal time for payroll providers to take a hard look at their solutions.
Why? Because employers are looking for innovative solutions and more complete payroll offerings to engage their employees and minimize costs. As of 2022, North America alone contributed to 54% of the growth in payroll outsourcing providers. The need is there, as payroll can be complex and time-consuming.
That’s why it’s crucial for payroll providers to stay on top of future trends to stay competitive. If you’re a payroll service provider, it’s beneficial to think outside current payroll practices to reduce costs, all while modernizing and keeping your clients happy in 2023.
Fortunately, there are simple solutions to help you start getting ahead. This article will cover the top 2023 trends among payroll processes and tools, starting with optimizing your payroll pricing.
1. Finetune Pricing for Payroll Service
Regardless of whether a company handles payroll internally or outsources it to a payroll service provider, running payroll can be costly. Not only does the process is there a financial cost, but it also requires a regular time commitment.
According to Forbes, there’s a growing trend of businesses preferring to keep payroll services within the company instead of outsourcing those tasks.
How can payroll providers continue to grow revenue despite this trend? Payroll is far from a one-size-fits-all service. This presents an opportunity to adjust pricing from the traditional “per employee” model, toward a more customized pricing approach. Some factors that can be considered for more custom-tailored pricing include:
- Payroll frequency
- Turnover rates
- Geographical location(s) of employees
- Tax filing requirements
- Benefits administration needs
- And much more.
Finding innovative solutions to this pricing dilemma will be necessary in order to stay competitive. Dispatching pay and benefits through a modern FinTech solution as part of their core offering can serve as a useful answer to many payroll providers.
These Fintech solutions can cut down on costs associated with paper checks. Some Fintech partners even offer revenue sharing – an innovative opportunity for payroll providers to generate more revenue.
2. Artificial Intelligence is Ready for Tedious Tasks
AI is a hot topic across virtually every industry – payroll included. With modern technology and constant flow of employee data, many payroll companies are looking into AI for support with manual tasks.
While every employee counts on being paid without issues, there are many factors that go into making that process agile. Depending on the size of a company and levels of employment within, calculating and preparing for payday can take more than half a day each pay cycle.
Payroll providers must ensure payouts are not only accurate but also on time. In fact, nearly half (46%) of the American workforce would look for another job opportunity after just one payroll error. This means that payroll providers must ensure proper calculations and timely services in order to keep their clients happy.
The good news is artificial intelligence and computer learning have come a long way. These systems are now ready to take on the more tedious tasks of payroll calculations. A payroll service provider can finetune their per-employee-associated costs, while accurately and reliably paying employees on time with AI technology.
The capabilities of artificial intelligence would reduce human error or oversight and streamline calculations. With their adaptive ability, an AI can also help with fluctuations involving the more tedious payroll operations, including:
- Personnel Reporting: From tracking hourly wages to employee turnover, AI can help maintain an errorless employee roster.
- Data Management: Instead of paper timeslips or leave requests, AI can automate the approval and tracking needs of these complex and fluctuating data.
- Compliance Management: A significant issue within payroll services includes the heavy fines for violations. An AI system can help ensure continued compliance and more innovative reporting.
3. Modern Fintech Solutions to Enhance Perks and Benefits
Fintech allows for faster and more reliable payroll transactions. Many payroll providers are incorporating Fintech solutions in order to stay competitive.
Why is such technology on the rise? A Fintech solution allows providers to stay competitive while minimizing costs. For example, issuing payroll perks like Earned Wage Access (EWA) is easy through a Fintech platform, and payroll can be dispersed using apps in a neo-banking account, or a digital wallet. Payroll service providers can leverage modern Fintech to not only stay competitive but also increase their pricing.
Paper checks are out, and digital pay is in. In fact, the use of digital wallets has seen an unprecedented growth rate among payment options. People prefer a digital means of conducting their finances, as nearly 32% of mobile wallet users now have three or more mobile wallets. A payroll provider could find itself left behind if it is not using Fintech as part of its offering.
Leading Fintech partners can even allow payroll providers to offer new benefits to their customers at low to no cost. This can be a major differentiator for payroll firms.
Is Your Business Ready For These New Payroll Trends?
Technology advancements are rapidly growing in use and capabilities, and payroll processes are evolving. Such trends, such as AI automation, streamline specific tasks while providing more efficient means of conducting payroll. The good news is that almost every payroll provider can use these tools and upcoming trends to their advantage.
Competitive payroll service providers will be engaging these trends and using them for more timely and accurate services while also delighting their customers. Once you have happy customers, you have a competitive edge in negotiating pricing.
Are you ready to join them?
Juice helps payroll providers stay competitive by enhancing their client experience with customized digital solutions. Learn more about our solutions for payroll providers.