One of the earliest known examples of payroll, dating back to around 3,000 BC, is a pay stub showing workers being paid in beer rations. Less than 100 years ago, some companies paid employees in company scrip. During the company scrip days, workers would find themselves in a less-than-ideal cycle of debt due to fees and the high prices of goods, as portrayed in the song Sixteen Tons by Tennessee Ernie Ford.  

Interestingly, as times have progressed, we are seeing more and more people continue to live in this cycle of debt due to outdated payroll processes. In fact, 68% of workers today are living paycheck to paycheck, and 83% of people under the age of 35 wish they were getting paid faster.

Most businesses process their payroll on a two-week basis, a cycle originating back in the 1940s when Congress passed the Current Tax Payment Act of 1943, which required businesses to begin withholding taxes and pay them directly to the government on the workers’ behalf. This tax withholding practice ultimately resulted in the two-week pay cycle as we know it commonly today.

It’s interesting to examine that so many companies rely on outdated payroll practices, especially when payroll remains one of the most critical business operations. When companies prioritize payroll, it can be a true driver for businesses. Here are a few ways companies should approach payroll innovation as a growth mechanism for their business.

Determine a Faster Payroll Structure for Your Company

With more people working remotely, traditional office-based perks don’t deliver much value to the employee experience anymore. That coupled with inflation and employees feeling the strain on their bank accounts more than ever presents an opportunity for savvy employers to look for innovative solutions such as instant payouts or flexible payday options.

Each year, nearly 12 million Americans are using payday loans, which can come with interest rates reaching 400 percent, forcing them into a never-ending debt trap. When businesses embrace flexible payment options that allow employees to get paid as they’ve earned their wages, it not only improves the worker’s overall financial situation but also can lead to cultivating a happier, more engaged company culture and improve recruiting and retention.

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