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As payroll systems become more digital and automated, employees are increasingly disconnected from understanding their paychecks.
This is a timely concern for HR leaders, as financial stress continues to affect workplace wellbeing and engagement. In fact, a PwC survey of over 3,600 full-time employees revealed that those experiencing financial stress are nearly five times more likely to report being distracted at work by personal finance concerns. This suggests that HR needs to ensure employees are paid correctly and fully understand the details of their compensation.
Related: HR’s next key opportunity: Help improve frontline workers’ financial health
Deel’s recent payroll research provides insights for HR leaders, especially regarding employee confusion and concerns about paycheck transparency. Despite the availability of banking apps and access to pay stubs, Deel found that nearly 30% of employees admit to being unclear about paycheck deductions. Many workers are more confident that they understand their streaming subscription or mobile bills than their federal tax deductions, health insurance or retirement contributions.
This confusion is especially pronounced among Gen Z and Millennial workers, according to Deel. These generations report struggling more with paycheck components than Boomers and Gen X, who said they feel more confident with items like FICA
