Employee Engagement Starts with Accurate Payroll Outsourcing

Long gone is the era when employees would land a job and stay there forever – from hire to retire. The modern business world has brought about a shift in employee behavior – new-age employees prioritize job satisfaction and engagement with their company and work culture. Employee engagement has gathered a lot of hype in recent years due to unforeseen work scenarios. Wasn’t employee engagement critical before the COVID era? It was! But the term wasn’t widely recognized across organizations. However, organizations have started considering employee engagement as a vital factor as it is directly related to overall productivity and, thus, profitability.

Disengaged employees are more likely to make mistakes 60% more often than engaged ones.

We all can agree that employee engagement and retention are at the top of HR managers’ priority lists. They are increasingly finding ways to keep both in-house and remote employees engaged, not with standing the proximity. Now, if you hear that employee engagement starts with payroll, what would your views be? Try to put yourself in your employees’ shoes – would you be willing to work wholeheartedly if you knew there could be compensation glitches at the end of the month? Or, your salary could get delayed, or there could be mistakes in payroll calculations. Ironically, everyone works for money, whether or not you agree. If you get your monthly wages credited on time without any errors, you will likely be more enthusiastic about working the next day. Thus, we can say payroll directly impacts employee productivity, the revenue of the company, and organizational reputation. Like it is well-communicated, employee engagement starts with payroll. However, is payroll just about wages? No, it’s not. It incorporates additional perks and benefits, competitive pay, insurance and tax assistance, employee empowerment, and more. Here is how payroll can impact employee engagement:

How can payroll impact employee engagement?

  • Payroll Errors

    Good payroll management incorporates accurate salary calculations considering leaves, overtime pay, additional benefits, and taxes. Any error calculating these numbers can lead to late or inaccurate payments, eventually frustrating the employees. In addition, no organization should face a situation where employees can question their administrative caliber or doubt their intentions.

    Accurate categorization of employees is also crucial for accurate salary cycles. An erroneous payroll creates distrust and may even make the employees resign early, directly impacting the company’s revenue.

  • Non-compliance with laws

    Nowadays, businesses deal with cross-country operations more than ever. Moreover, the remote and hybrid work cultures have allowed remote employees to work from their comfort zone. However, while doing so, employers must follow the payroll rules and laws applicable to different countries or states. Non-compliance with such laws or rules may result in hefty penalties or legal actions against the company.

    Employers must also pay gratuities and provident funds to employees as per government laws. Failing to do so can also lead to penalties or, even worse, cost an organization its reputation. Employees often choose to switch jobs in such situations, and hiring for the vacant positions can turn out to be costly.

According to a survey, the cost of hiring an employee for a vacant position is around $4000.

  • Lack of Transparency

    Employees today look for workplaces that provide a transparent and healthy work environment. They want a thorough understanding of payroll management, including their wages, taxes, deductions, etc. For instance, if an employee has doubts about the received salary or wants to know the payroll particulars, he/she would have to approach the concerned person and request a thorough discussion of deductions. The concerned person will then have to explain the unpaid taxes, absences, insurance, etc. The overall process will devastate not only the employee but also the overworked accounting person. Such confrontations will ultimately demotivate employees and waste time – all this can be avoided by automating payroll processing.

Also Read: A Business Case for Modernizing your Payroll Process

Ways payroll can ensure employee engagement

  • Error-free salary and tax calculations

    When you care for someone’s needs, they will always put you first. The same goes with an organizational structure – the more you keep your employees happy and satisfied, the more they will be dedicated to their work. With countless discussions happening around payroll management, organizations have finally started to recognize the importance of accuracy if they want to retain the best talent and earn their loyalty or commitment. One of the best ways to keep employees satisfied is by paying the monthly wages on time with accurate calculations. This can only happen with an automated payroll management service. Integrating automation into the payroll processing help streamlines the workflow with error-free salary and tax calculations.

  • Integration with time and attendance recording systems

    Manual data entry into the time sheets is probably the last thing employees would prefer doing. Moreover, there are countless possibilities of data getting altered or lost while manually handling the time sheets. On the other hand, automated payroll management services provide accurate time and attendance records and offer employees more clarity on their shifts and overtime payments. Furthermore, this helpsemployees gain more confidence about their expected pay and saves countless hours of payroll management teams spent on manually tracking and reconciling hours.

  • Accurate leave record management

    A good payroll management service ensures that the leave structures and policies are clearly defined and executed. Leaves management is the most common factor causing a rift in the relationship between an employee and an HR manager. Apart from the work schedules, employees also wish their time to be respected and handled carefully. An automated payroll management system eliminates these leave disputes. The software enables employees to clearly understand their leave status in real time, allowing them to plan their time effortlessly and efficiently. This makes employees feel valued, directly impacting employee engagement and productivity.

  • Self-service options

    Are you keeping your employees from their employment data? Don’t. Allowing your employees access to the employment details such as salary structures, policies, tax deductions, benefits, insurance policies, timesheets, time-off data, and more enhances their contentment level. They feel job security and satisfaction, which in turn increases productivity. In addition, some payroll management service providers offer mobile apps to have greater accessibility, enabling employees to access the data from anywhere, anytime.

How does an outsourced payroll service increase employee engagement?

We saw how payroll affects employee engagement and productivity and the ways payroll can enhance employee engagement. But not all companies can afford the automation costs. This is where outsourcing comes to the rescue. Payroll outsourcing gives wings to your employee engagement initiative. The payroll service provider takes care of every integral part of the payroll process, including monthly wages, employee categorization, tax calculations, leaves deductions, additional benefits, and more. You don’t have to worry about the specific payroll or tax laws that you must adhere to, nor will you need to supervise the taxes paid and other data.

Payroll outsourcing ensures that you are delegating the responsibility to a team of experts, and you can expect accuracy and punctuality in your payroll processing. Employees will have access to a self-service portal where they can easily access the data related to their leaves, overtime, tax variations, and more. In addition, an error-free payroll with automated leave management and attendance system enhances the employee experience.


Exela HR Solutions has a team of experts that can help enhance your payroll processing and make sure your employees’ payroll expectations are met. Our team recognizes your business requirements and provides the best-in-class payroll processing that will boost your employee engagement and productivity. Our aim is to ease your payroll processes so that you can focus on business strategy and revenue growth and provide your employees with error-free and smooth payroll processing.

DISCLAIMER: The information on this site is for general information purposes only and is not intended to serve as legal advice. Laws governing the subject matter may change quickly, and Exela cannot guarantee that all the information on this site is current or correct. Should you have specific legal questions about any of the information on this site, you should consult with a licensed attorney in your area.