There are many reasons why this has become the norm, but one key factor is the work involved in payroll management.
Gathering timesheets and expenses from every employee, checking discrepancies, calculating statutory time off and sick days, deducting for social benefits, and factoring in overtime and bonuses involves a great deal of effort. Manual payroll management offers too many opportunities for errors to creep in. Verifying and correcting payroll is an added headache for a task that’s already tedious and time-consuming. Monthly payroll means just 12 pay periods in a year, which limits the burden on payroll teams.
However, many traditions around finance are being disrupted by new technologies and innovative approaches, like digital wallets, digital payments, cryptocurrencies, and automated workflows. At the same time, work practices underwent a seismic shift in the last few years, with the rise of remote work and the widespread embracing of flex work.
Employees’ payroll expectations are changing too. Research by Indeed Flex found that in the UK,34% of employeeswant to be paid weekly, but only 15% are. The vast majority, 77%, still receive a monthly payslip. Close to one-third of employees say they run out of money by the last week of the month, and that weekly pay would help them withbudgeting.
While many organisations want to meet these demands, the effort involved in payroll calculations presents an enormous barrier. Thankfully, new tools such asPentosimplify the work involved in calculations and operations, to help payroll teams to overcome those challenges.
With automated payroll management, companies can rethink pay periods from the beginning. It places them in a position of strength in which they can consider which pay frequency will be the best for the company and its employees, rather than being forced to adopt the least difficult option.
Here are six reasons why your business could benefit from shifting to weekly payroll.
#1 - It’s better for your employees
As mentioned above, a significant percentage of employees prefer to get paid weekly instead of monthly. With weekly payslips, they feel more in control of their money and better able to manage their budget to meet their needs, which results in greater financial stability, lower stress, and greater productivity.
Weekly payroll also means that employees see prompt compensation for their work, especially when they are working overtime or shifts. For employees who are in a precarious financial situation, receiving swift payment for extra work hours can make all the difference to their sense of stability. It’s worth remembering that current economic conditions are pushing ever more households into financial difficulties.
#2 - It’s more suitable for certain industries
In industries like retail, hospitality, healthcare, and manufacturing, weekly payroll is vastly more convenient. It's common for companies in these verticals to use shifts, overtime, and temporary workers, which are much better administered with a weekly payroll that can capture work closer to real-time.
Monthly payslips make it difficult to operate successfully in these industries, and weekly pay is the norm. Pento’s automated solution allows payroll teams to bulk upload all their employees’ timesheets at once, saving effort and making it very friendly for shift situations.
#3 - It simplifies your cash flow
Weekly payroll means that your payments to employees are more regular and predictable, which helps make your expenses more reliable and stable just as it helps employees to have a steadier income.
This makes it easier to track and forecast cash flow, helping improve the trustworthiness of your financial planning and make your business projections more reliable.
#4 - It improves strategic financial planning
Improved visibility into cash flow and reliability for business projections brings added benefits. Your business will enjoy increased adaptability to economic fluctuations because you’ll have a far clearer grasp of your business situation. Weekly pay periods also allow for quicker adjustments during economic uncertainties or changes in business needs, assisting in greater flexibility when managing labour costs.
Pento integrates directly with leading accounting platforms to help clarify your view of financial conditions. Detailed, easy-to-read reports allow business leaders to make more confident data-driven decisions that build a more resilient business profile, contributing to a company that can better weather unexpected market forces.
#5 - It raises employee engagement
Employees are more likely to step forward to take extra shifts or work overtime when they’re confident that they won’t have to wait weeks for the extra money to come through. Knowing that their employers care about their financial situation enough to deliver the pay frequency that’s best suited to their personal financial needs also translates into increased motivation and productivity.
Offering weekly pay can be an attractive feature for potential employees, which can give your company a competitive edge when it comes to recruitment and talent acquisition. The sense that they are working for a company that places employees first also boosts employee engagement and retention, giving the organisation a competitive advantage.
#6 - It improves payroll operations
When you run payroll more frequently, you’ll also increase the number of checks and balances without your system. This can help to reduce errors and identify mistakes and discrepancies more quickly, resulting in faster resolution and fewer delays in the payroll process. The average Pento user spends only 45 minutes processing payroll per pay cycle because operations are streamlined and errors are quickly resolved.
Employees who get paid weekly have an incentive to approve their timesheets on time each week because otherwise their pay is delayed. This alone can help reduce frustration for payroll personnel who may otherwise have to nag workers and decrease friction between HR and employees.
Weekly payroll could be beneficial for your business
As the technological landscape evolves rapidly and work-life expectations change almost as quickly, weekly payroll could soon become the norm. With automated payroll management solutions like Pento, your finance team is free to choose the pay frequency that is best suited to both your employees and your business needs.
