EXCLUSIVE: How Payroll Automation Can Be a Differentiator in a Tough Labor Market

Progressive Grocer talks to CloudPay exec John Pearce
Lynn Petrak
Senior Editor
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Supermarket Worker
Providing mobile access to earned wages can help grocers stay competitive as employers, according to CloudPay's John Pearce.

Recent reports about software glitches, overtime violation payouts and other employee compensation issues have underscored the importance of an effective, efficient payroll system. According to The Workforce Institute at Kronos Inc., payroll problems affect 82 million employees in the United States, more than half of the country’s workforce. The U.S. Internal Revenue Service (IRS) reports that around a third of employers make a payroll error in a typical year, leading to costly penalties and, tangentially, a loss of workers who may look elsewhere for jobs.

John Pearce, SVP, payroll operations for global employee pay provider CloudPayemphasized the importance of payroll and payment technologies in today’s business climate. “Compliance remains a key concern for employers around payroll -- you can get into trouble, as we’ve seen in the news,” he told Progressive Grocer in a recent exclusive interview.

At the same time, payroll setups can be a make-or-break proposition among workers, given the sheer importance of paychecks to staffers and recent macro trends in the labor market. “In the past few years, coming out of the pandemic, the dynamic has changed. Grocery workers had more of a heightened value – they had to keep working so people could keep eating. As their value increased, we also started seeing The Great Resignation and how that turned into a shortage of labor. So being able to retain and attract staff has a heightened importance for companies working in the grocery and retail space,” Pearce pointed out.

To contribute positively to the pay experience and thereby support recruitment and retention, CloudPay works with businesses, including grocers, to enhance their systems through its unified global payroll, treasury and on-demand solutions. While the grocery sector has lagged behind other industries like tech and financial services, retailers are increasingly looking at new payroll solutions. “They are starting to catch up, and at some point, people figure out that they have to move to the cloud and do payroll differently than they are used to," Pearce noted.

A digitalized approach to payroll and payments, with features like earned wage access and pay-on-demand solutions, can help grocers navigate a variety of potential issues in today’s marketplace, according to Pearce. Such tools streamline efficiencies for the grocery operation while also giving employees greater access to how and when they get paid. “These are mobile technologies that are easy to deploy to pay employees,” Pearce observed.

CloudPay, a U.K.-based company with U.S. offices in Raleigh, N.C., continues to improve its own solutions, teaming up with Visa Direct to offer fast, secure payments to any debit or credit card. While many solutions are geared toward improving flexibility and access for employees, there are also protections for employers; CloudPay’s on-demand pay solution, for example, is designed to be easily set up and includes limits placed on how much of an employee’s earned wages can be withdrawn in a transaction.

Employers looking to make a payroll change should be mindful of the many facets of payments and sensitive information that can pose risks. “When you are doing a transformation, with personal and private data, you have to make sure you really understand detailed payroll requirements so the system is set up to calculate and deliver through a very detailed, highly governed project,” Pearce explained. Along with having experienced people lead the payroll function, testing is crucial to the success of payroll and payment process updates, he added.  

Ultimately, rethinking the way that payroll is handled can help retailers both avoid problems and take advantage of opportunities. “This allows you to start differentiating yourself in terms of employee payments. You have lower attrition and lower absences – you can build things like that in the business case,” Pearce said. You don’t want to end up in the news for not paying people. And you want to be able to compete for the same employee population.”

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