5 Things You Didn't Know About Payroll

Key Takeaways

1. The Birth of Payroll was somewhere between 10,000 BC - 6,000 BC
2. The Henry Ford Story of Doubled wages for living the “American” way
3. The Time Investment in Calculating Payroll 
4. Women paid 53% less than men
5. Payroll Security Back in the Day

Did you know the first payroll was done somewhere between 10,000 BC - 6,000 BC? Well of course due to lack of proper record keeping at the time, this isn’t a proven fact yet but it’s believed the first payroll was done during the Neolithic revolution in the form of goods - barter trade. Let’s talk about the lesser-known facts of payroll, shedding light on five revelations that might just reshape your perception of this essential business function. How many of these do you know? 🤔

1. The Birth of Payroll

Contrary to popular belief, payroll isn't a recent innovation. Its roots trace back to ancient civilizations, where workers were compensated with goods like food, clothing, and shelter. The evolution from barter systems to today's digital payroll landscape is a testament to the enduring importance of compensating labor.

From the times of ancient civilizations, where workers received compensation in the form of food and essential items, to the introduction of coinage systems in ancient Greece and Rome, the importance of payroll has consistently manifested.

As societies advanced, the methodologies for calculating and disbursing wages also evolved. The Industrial Revolution marked a pivotal moment in labor practices, leading to the establishment of more organized and formalized payroll systems. With the progress of technology, payroll processing underwent improvements, resulting in enhanced efficiency and accuracy.

In the contemporary era, automated payroll systems have emerged, capable of handling intricate calculations and ensuring punctual salary disbursements. Payroll holds profound significance, not only guaranteeing equitable remuneration for employees but also playing a vital role in maintaining accurate financial records and adhering to legal requirements.

2. The Henry Ford Story, Doubled wages for workers living the “American” way:

The Henry Ford story of doubling wages is a very popular tale in the history of labor and industry. In 1914, Henry Ford, the renowned American industrialist and founder of Ford Motor Company, implemented a very funny yet interesting policy known as the "Five Dollar Day".

At that time, assembly line work in factories was often monotonous and demanding, with relatively low wages. Ford recognized that by paying workers more, he could attract and retain a skilled workforce, reduce turnover, and improve productivity.

In a move that defied prevailing industry norms, Ford doubled the minimum daily wage for his employees to $5, which was significantly higher than what other companies were offering. However, not every employee was able to receive this raise. To determine who among his employees was eligible, a group called the “Socialization Organization” would visit the homes of each employee to determine if they were living according to the standards of Henry Ford. For example:

• Men did not qualify if their wives worked outside of the home.
• Women did not qualify unless they were single or the sole provider for their family.
• Immigrants had to attend classes to be “Americanized”.
• Men and women were not permitted to drink alcohol or gamble.

Some sound misogynistic and I’m pretty sure none of these qualifications would fly today, and if your boss has sent people into your home to find out how you live, please contact HR immediately 😂.

3. The Time Investment in Calculating Payroll:

On average, it takes about 3 days to one week when calculating payroll manually or using spreadsheets. It takes about 1-2 days when calculating payroll with a system and it takes less than a day if you’re outsourcing the function to a group of specialists. Well, the last part is all about receiving and going through compliance documents or any queries during the process. 

This tells us that this task takes about 14%-23% of your time (at work) per month if doing it manually, about 9% if you’re automating and about 4.5% if someone is doing it for you. Well, truth be told the first scenario is an example of a bad investment don’t you think, considering the outcome is the same? Well, we haven’t factored in errors and other mistakes yet. So it’s best to be wise when thinking about how to go about this process…

4. Women paid 53% less than men

During World War II, women assumed roles traditionally held by men such as factory workers, engineers, drivers, conductors, and nurses. Despite their vital contributions, they received significantly lower wages. Despite frequent strikes by women, achieving equal pay was challenging, with limited agreements as employers often evaded the issue. On average, women were paid only 53% of the wage earned by the men they replaced. Although workplace inequalities have evolved, regrettably, they persist. This historical payroll fact remains a stark reminder that gender pay gaps should be consigned to history.

5. Payroll Security Back in the Day

Before tech, payroll data encryption was not as sophisticated as it is today. In manual systems, employers relied on physical security measures to protect sensitive payroll information. Things like:

1. Locked Cabinets

2. Limited Access

3. Sealed Envelopes

4. Trust-Based Systems

…. were used to protect this information. While these measures provided a basic level of security, they were not foolproof. With the advancement of technology, payroll systems like the ElevateHR Payroll Software have significantly enhanced the security of payroll data in the digital age.

So which fact did you like the most?