Employee retention has recently become a subject of greater concern for employers. Faced with the aftermath of the pandemic and movements such as “The Great Resignation” – which, in theory, would see workers quit their full-time jobs for greener pastures – employers are, understandably, concerned by their turnover rates. As such, many organizations are exploring new avenues to create a better employee experience. But there is one often overlooked HR function which employers can improve upon to strengthen their employee experience: payroll.
Read on to find out how and why payroll plays a crucial part in the employee experience, and how to leverage this tool to your company’s benefit.
As the term suggests, employee experience (EX) is concerned with the way employees feel about their role and the treatment they receive within a company. This encompasses all aspects of their experience: from the tools and equipment they are given, to meritocracy within the workplace, their relationship with management, overtime work and so much more. As such, a good employee experience is key to retaining an employee. Indeed, research conducted in 2020 by McKinsey & Company shows that employees who report having a positive experience are 16 times more engaged than those with a negative experience, and they are also eight times more likely to want to stay at a company.
Other factors are also at play when it comes to improving employee experience. Indeed, previous generations had a near-blind loyalty to the companies they worked for, making it easier for these organizations to create a satisfactory employee experience. But now, younger generations do not possess that same attitude. In fact, millennials – who currently make up the majority of the workforce worldwide – tend to value their own benefit over company loyalty. Research by McKinsey further shows that even pre-pandemic, Gen Z employees were putting a greater premium on workplace well-being because they already felt disengaged from their jobs.
Companies, therefore need to do more to provide the same level of employee satisfaction as they did before.
In an attempt to enhance employee experience, well-meaning companies often invest in well-being programmes, reward schemes, and the creation of an ‘inspirational’ working environment. While these measures may prove to be efficacious to boost morale, they may ultimately fail in the absence of a robust payroll system. Put simply, if the basic conditions of an employee’s contract are not respected, there is little point in trying to provide more sophisticated benefits.
Studies by The Workforce Institute from 2017 have shown that 49% of American workers would start a new job search if they experienced only two problems with their paycheck – a fact which brings to light the correlation between a functional payroll system and employee retention.
Issues with payroll can affect employee experience in these 3 ways:
As an employee is preoccupied with the consequences of a late or incorrect pay check, their morale may, understandably, falls. Indeed, studies by The Workforce Institute report that over a third of workers claimed they were compelled to make late payments on their mortgages, credit cards, auto loans, and other bills – a situation which brings about considerable anxiety. When at work, these employees may also be focused on finding a solution to the problem instead of carrying out their duties, resulting in lower productivity. Now, one can only imagine how much more serious the consequences would be if a whole team was impacted by an issue with the payroll system.
Repeat issues with payroll – even minor ones – can build up and fester into mistrust towards the employer. Employees may begin to feel as though their contribution to the workplace is not respected, or worse, that their employer is being unfair to them. Once an employee’s trust begins to erode, they may start considering other job opportunities.
Looking back on their experience, some ex-employees may keep in mind that there were issues with the payroll system, showing a lack of seriousness from the company. Whether it be in terms of delayed salary payment or in terms of miscalculating overtime hours and leaves, employees tend to remember negative experiences more easily than positive ones. Word spreads fast in the age of social media and websites such as Glassdoor provide a ready platform for employees to air out their grievances to a public of potential candidates for their replacement. As a result, the company’s employer reputation is damaged.
Many of the issues companies face with payroll stem from their manual payroll process. Collecting, collating, and otherwise processing the data for all the labour force, while striving to meet a deadline is bound to result in human error. This process gets infinitely more complex once companies cross the border and expand across the world – in Africa for instance. The laws change; language barriers crop up, and taxation must be processed differently. Still, payroll must imperatively keep up or the company may face fines or other sanctions as a result of non-conformity with the local labour laws. The chance of errors grows considerably in these cases.
Switching to an automated payroll system is not the only option. Now, companies may choose to adopt this new system in-house, but they will then have to shoulder the accompanying costs of hardware, software, and training. Instead, as a more cost-effective alternative, businesses may partner with an Employer of Record (EOR) who will take on the responsibility of payroll and compliance with local regulatory frameworks, among others.
Africa HR Solutions has considerable experience as an EOR service provider, helping clients from across the world get their operations running across Africa. Partnering with us means entering a secure arrangement and having the peace of mind that your HR operations are in good hands.
Get in touch with us now to find out how we can help you with your EOR needs.
Grant Geraghty is the longest-serving member of the Africa HR team. This resident subject matter expert and client champion is responsible for gaining a deep understanding of our clients’ unique HR needs in Africa and providing tailored solutions that align with their business objectives. Grant collaborates closely with our clients to ensure that their requirements are properly implemented, providing ongoing support and guidance throughout the process.
Grant brings a wealth of experience to his role, having served as Africa HR’s longest-serving employee. He holds a Bachelor of Commerce degree, with a major in Economics and Business Finance, from the University of Natal in South Africa. Additionally, he has completed a certification program in Payroll and Tax Administration from the University of Cape Town, further enhancing his expertise in HR operations and compliance.
His commitment to delivering exceptional service and his extensive knowledge of HR in Africa make him an invaluable member of the Africa HR team.
Kevina Takoordyal has a BA Hons Business Management from the University of Glamorgan, UK, with MBA in leadership and Innovation, MBA General, PMP Certified, and Agile Scrum Master. She currently works as the Head of Operations at Africa HR Solutions Ltd with more than 20 years of proven leadership capabilities in Operations, Business Development, People Management, Process Optimization, and Project Management in the Financial Services, BPO, Banking Industry, and Heath Care Industry. In Senior leadership roles with an international footprint across Europe working and extensive Pan- African experience from a compliance, finance, and operations angle, Kevina comes across with a panoply of cross-functional skills. Kevina also serves on a few Boards, Non-Independent Executive at MioD and for NGOs on a voluntary basis, a coach and mentor to aspiring female leaders across Africa and Mauritius.
Kevina is a firm believer in Servant Leadership with a strong focus and commitment to uplifting others, with the ability to deliver through a highly engaged – diverse team, and works towards consistently synergistic value creation. While being a focused and adaptive thinker and Kevina is actively participating in panel discussions on Innovation, CX, Digital transformation.
Kevina serves as Project Assessor for the National Youth upskilling program. She has been recognized as Global Talent in a few companies, Ceridian, and International SOS Ltd whereby she has been awarded a few scholarships and had the opportunity to be mentored by Senior Vice President in the US. Award Winner in various fields and at a national level and recognized including Super Achiever Leader Award in Africa in 2016, Awarded Africa Women Leader 2018.
Viloshna is an experienced finance professional with 18 years of expertise in strategic financial planning, financial analysis, cash flow management, systems and controls implementation, financial reporting, and continuous process improvements. She currently serves as Head of Finance & Business Support, where she has successfully automated and leveraged the financial reporting system capabilities to ensure efficient company operations.
Viloshna’s background includes senior roles in a multinational pharmaceutical company and a large listed Mauritian conglomerate. Her meticulous attention to detail and strategic thinking have streamlined financial processes, making her a valuable addition to any finance team. Viloshna is a qualified finance professional with an FCCA qualification and an MBA, bringing valuable expertise to any organization.
In her current role, Viloshna leads the company’s Treasury and Payments function, including the fulfillment of the company’s cross-border payments into Africa. With her strong educational background and extensive experience, Viloshna consistently demonstrates her ability to optimize financial operations, minimize risks, and improve profitability. Her expertise in financial reporting and process improvements make her a valuable asset to any organization.
A qualified lawyer who joined Africa HR Solutions in July 2020, Mark Du Preez has experience working in private practice for a reputable law firm in South Africa. He also played commercially focused roles at a leading private bank, wealth management company, and outsourcing firm in South Africa and Mauritius.
Mark has played a pivotal role in Africa HR Solution’s risk mitigation strategy, which positively impacted P&L performance over the years.
He currently leads the Partnerships function of the company including relationships and oversight with in-country partners (ICPs) across Africa.
Alex has more than 15 years of experience in the global, strategic development of both enterprise and consumer brands in categories including technology, transport, enterprise software, entertainment, and travel.
With experience in roles on both agency and corporate side, he has worked across international brands and has led the development and execution of multi-discipline campaigns across EMEA, NORAM and Asia Pacific.
His focus is on driving meaningful business impact through brand differentiation and building high-functioning, digitally oriented, and analytically driven capabilities. He is motivated by working with, and developing dynamic people, teams, and organizations.
He leads, manages, develops and mentors the Key Account Management department, including line management responsibility for the team of Key Account Managers and Key Account Administrator who represent the Company as the primary communication link between all relevant stakeholders, including clients, third party in-country partners and internal functions.
Originally from Mauritius, he holds bachelor’s degrees in International Business, Finance and Management from the University of Nevada, Reno.