5 Payroll Trends That Will Change The Way You Work in 2024
Need help onboarding international talent?
- 2024 will present payroll teams with new opportunities for growth and innovation so they can focus less on manual tasks and more on meaningful work.
- Software features like AI and automation will allow teams to process payroll more efficiently and accurately while improving the employee experience.
- Consolidated HR and payroll services like Deel will allow companies to manage remote teams scattered across various locations more effectively than ever before.
Payroll operations have undergone a significant shift in recent years as technology has advanced and teams have become more globally dispersed.
Not long ago, only large enterprises could hire abroad, but now companies of all sizes can expand globally—now, around 89% of contracts created on Deel are for remote workers.
These trends are set to continue in 2024 and will be accompanied by the need for simplified global payroll management.
Aaron Goldsmid, Head of Product, Payments and Integration, Deel
Read on to see how factors like globalization and new technologies will continue to shape the biggest payroll trends and practices in 2024.
Integration of payroll into holistic HR systems
Over half of organizations say the next big trend in payroll is using consolidated HR and payroll solutions to simplify and streamline global operations.
If you use multiple payroll providers, you’re more than twice as likely to encounter difficulties with management and global reporting. With an integrated solution, your human resources and accounting teams will have access to holistic, real-time data and standardized reporting and processes that minimize the risk of payroll errors.
An all-in-one platform like Deel enables companies to manage payroll, HR, compliance, and more for their entire workforce in one place. This includes direct employees hired under owned entities, EOR employees, and independent contractors.
Businesses at the forefront of this movement have noticed significant time savings. For example, Deel customer Yodo1 has saved over 100 hours per month by unifying payroll and HR across 30 countries.
Flo Alcasas, Head of People and Remote, Yodo1
Centralizing payroll software also supports the HR trend of prioritizing the employee experience, which 75% of CHROs plan to make their top focus in 2024. To learn more about the role of people teams in coming years, download our Future of HR Report.
Further investments in AI
One in three businesses plan to increase their investment in artificial intelligence, which is becoming more commonly used in payroll systems.
Dan Westgarth, COO, Deel
Generative AI has major implications for HR management and payroll processing, given the large volume of personal and financial data involved. It can analyze this information in virtually no time, recognize patterns humans wouldn’t, and make suggestions. You could use it to spot issues like pay discrepancies or unused benefits and leverage the insights to refine your payroll best practices.
In 2024 and beyond, AI will be able to help you with global compliance management. Deel recently launched Deel AI, a workplace assistant similar to a chatbot that can answer questions on international tax laws, benchmark salary data, and your own workforce.
With Deel AI, you can:
- Easily access reliable HR information and insights from your employee data, eliminating the need to search across multiple tools or platforms
- Get instant information on local laws in over 150 countries
- Quickly analyze your own workforce data through instant reports, gaining valuable insights without the manual effort of spreadsheet reporting or using multiple tools
- Maintain secure access and data protection with a Virtual Private Cloud (VPC) environment
Deel is also helping companies mitigate misclassification risks with the Deel Lab Misclassification Assessment, which combines AI with award-winning research to help you compliantly classify workers with over 90% accuracy.
Samuel Dahan, Chief of Policy and Chair of Deel Lab, explains: “The system can predict whether a worker is an independent contractor or an employee anywhere in the world. However, the law is constantly changing, making these predictions more complicated. To account for this, we are training the algorithm to pick up on the complexity of each case.”
Our recent research shows that companies are not only embracing AI in their processes but are also hiring for more AI roles, especially in the US, Canada, and the UK.
Matt Monette, Country Lead and Head of Expansion, UK & Ireland, Deel
The rise of on-demand pay services
On-demand pay is a payment method that gives employees access to their wages before the scheduled payday, allowing them to take home a single day’s wages or all the money earned in the stipulated payment period to date.
With the introduction of flexible payroll tools, accounting teams will be able to:
- Pay employee salaries up to a month early
- Add employee expense adjustments to be paid out immediately at any time
- Add bonuses or commissions to be paid out at any time
- Onboard new hires at any time
- Run payroll at any time in just a few clicks
By offering flexible payment methods like on-demand pay, companies can support employees’ financial wellness by ensuring they have money when they need it and alleviating financial stress.
On-demand pay is gaining popularity, particularly among young workers—in fact, 83% of Gen Z say flexible payroll is important to them. As more of this generation enters the workforce in 2024, companies should embrace on-demand payroll options to attract and retain key talent.
Flexible pay is especially well-suited to the gig economy, as you can pay freelancers the moment you’ve completed a project and maintain their trust.
Increased emphasis on data security and privacy
Cross-border data compliance will become a top priority in 2024 as 50% of organizations plan to invest more in safeguards. Global payroll providers like Deel are meeting the demand for increased protection by maintaining robust security features such as:
- Ensuring GDPR compliance
- Encrypting all network communication by running network traffic over SSL/HTTPS
- Providing secure single-sign-on experiences to manage user identities in a central location
- Regularly updating and testing systems to identify potential vulnerabilities
- SOC2 compliance and ISO 27001 certification
Investing in safeguards is predicted to prevent up to two-thirds of data breaches in companies. Payroll departments are especially vulnerable and can benefit from extra security as they manage a significant amount of personal and financial information through cloud-based payroll and HR software.
In the event of a breach, whether it's due to external attacks or department errors, employees may lose trust in the company. Governments have also been tightening laws and increasing penalties in response to growing cybersecurity threats. For instance, GDPR fines companies up to €20 million euros (about $22 million USD) for data breaches.
Greater compliance with global payroll regulations
2024 will bring significant changes to legislation that affect the payroll industry. Companies are responsible for staying up to date with these new policies but over a third struggle with compliance. Recognizing these difficulties has led to a renewed focus on maintaining continuous compliance.
Pay transparency laws are a major talking point as many governments are currently revising their requirements. For instance, the EU introduced the Pay Transparency Directive in 2023 and member states plan to adopt it on a national level by 2026. US states are also gradually implementing pay transparency laws, with New York being one of the latest.
Now that payroll teams work across borders, 2024 is the year to take a proactive approach to compliance management. Instead of waiting for announcements, you can easily monitor updates and risks with Deel’s Compliance Hub.
Our Compliance Monitor automatically scans, collects, and explains the latest relevant regulatory changes globally, covering areas such as wages, pensions, private insurance, leave changes, and tax obligations. The Workforce Insights reports proactively alert you to expiring visas, misclassification risks, and other non-compliance with elements such as minimum wage, benefits, and more.
Embrace the future of payroll management with Deel
As we move into 2024, there will be significant advancements in payroll technology that will affect businesses of all sizes, from small businesses to multinational corporations. By embracing these opportunities, you can streamline your operations and enhance accuracy, while also promoting the well-being of your employees.
Deel’s all-in-one platform can help you capitalize on emerging trends. Our compliance management tools allow you to keep pace with constant changes in the international arena and within your own company, and our range of automation and self-service features enable you to streamline payroll processes and focus on high-value tasks.
See how Deel could transform your payroll function in the coming year by booking a demo today.