Mind the Gap: Communicating a Payroll Shift
Adjusting your payroll cycle is a significant organizational change. This article, the second in a two-part series, outlines a thoughtful, transparent communications strategy. Focusing on communications will be key to managing this transition well, for both the management team and for employees.
Whether you're moving from paying employees in current (i.e., paying for days worked up to the day of payment) to paying in "arrears" (i.e., paying for work completed in the previous period), you must be prepared to address employees' concerns and feedback. While the change can support payroll accuracy and efficiency, it also directly impacts employees, from their expectations of when payday is and how they are paid to personal budgeting and finances.
Why communication matters
Payroll is one of the most sensitive areas for employees. Even minor disruptions can lead to confusion or mistrust. Clear, timely, and empathetic communications are critical:
- Build an understanding of why the change is happening.
- Set expectations about what will change and when.
- Provide reassurance that employees' financial well-being is considered.
- Outline how employees are paid today and what will change in the future.
- Reinforce that employees' wages/salaries/regular pay rates are not changing.
Suggested communications approach
1. Engage leadership and managers first
Before you share the news with employees, align with leadership and frontline managers. Equip them with talking points and frequently asked questions (FAQs) so they can confidently address questions and reinforce messaging.
Key message example
"We're updating our payroll process to support accuracy and consistency, and we want to support our teams through the change."
2. Announce change to the organization
Distribute a clear and concise company-wide message from HR or senior leadership. This should:
- Explain what is changing (from current to arrears).
- Provide why the change is being made (e.g., supporting accuracy, efficiency, compliance).
- Outline the timeline of the change.
- Acknowledge potential concerns and commit to support.
Key message example
"Starting [date], our pay cycle will move to arrears. This means you'll be paid for the previous pay period rather than the current one. This update helps to ensure that we have the most accurate hours, time off, and adjustments reflected in each paycheck."
3. Use a multi-touch approach
As you know, employees absorb information differently, so remember that not everyone has email, accesses email, or is comfortable with technology. People also have a short attention span. Use a mix of communications vehicles, including:
- Email.
- Intranet posts.
- Team meetings, town halls.
- Standups or huddles before shifts.
- One-on-one conversations with HR or managers.
- Visual aids like infographics or sample timelines.
- Posters, fliers, handouts.
- Videos.
- Payday reminders (i.e., text messages).
- Home mailers.
4. Address the "gap week" or transition period
Typically, most employee concerns will be about how the transition will affect their pay dates. Will there be a delay or a gap in paychecks? Consider:
- Offering a one-time transition payment.
- Enabling a vacation payout / buyout.
- Allowing a repayment plan for any advances.
- Explaining how the shift will occur and whether employees need to take action.
Tips
- Create a graphic that shows "old vs. new" pay dates and periods.
- Create a payroll calendar and checklist for employees so they can see when their respective payday is moving forward and what time period they will be paid for.
- A checklist of reminders to adjust bill payments, etc., is also helpful.
5. Provide ongoing support
Set up:
- A dedicated email inbox or hotline for questions.
- FAQ documents with everyday scenarios.
- Office hours with HR/payroll teams during the transition period.
Tips
- Review feedback and provide updated FAQs.
- Reinforce key messages after the change has gone into effect.
6. Follow up and reinforce
As the first new-cycle paycheck is delivered, send a reminder and thank employees for adapting. Ask for feedback on the process and refine your communications, as needed.
Tip
Review new hire materials (i.e., employee handbook, policies, offer letters) to update pay information, as needed.
Wrapping up
Moving from current to arrears payroll is ultimately a behind-the-scenes improvement, but for employees, it's deeply personal. Leading with empathy, clarity, and proactive support will help turn what could be a stressful shift into a smooth, positive experience.
For more about payroll processing, including other leading practices for payroll, read "What is Payroll Processing?"
