Payroll is one of a company’s most important activities, but for many organizations, the process is fraught with inefficiencies. Here are some tips to help cut down on errors so your team can spend more time on strategic activities.
Payroll affects an organization’s cash flow and risk profile, as well as overall employee engagement if people aren’t paid accurately or on time. This can contribute to decreased productivity and can be detrimental to business performance.
Companies are putting greater focus on reducing existing inefficiencies by tracking and measuring key performance indicators (KPIs) of their payroll functions. According to Deloitte’s Payroll Benchmarking Survey, the number of organizations tracking payroll KPIs increased substantially in 2019 from the year prior, moving from 62% to 91%. Approximately 85% of organizations track payroll accuracy and efficiency, with 89% measuring payment errors and 54% measuring the number of days it takes to resolve a payroll error.
The future of work is here
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Legislation is changing rapidly, making it difficult to keep up with payroll requirements. Global companies – or those rebuilding or restructuring – may face even greater complexity of understanding and adhering to local laws and regulations in new regions. Leading organizations are moving away from outdated approaches to payroll and investing in cloud solutions to help automate complex processes and reduce risk exposure so they can focus on value-generating activities. Here are five ways organizations can leverage technology to simplify and save time on their payroll processes in a rapidly changing world of work.
Simplifying your payroll process
1. Centralize your records
From an HR and payroll perspective, keeping employee records up to date is critical. But, the historical processes – sifting through stacks of forms, scrolling through massive spreadsheets, or manually entering the same information into several systems – aren’t efficient for payroll teams. Storing appropriate employee records in one place, rather than in disparate locations, will help save time and reduce the risk of losing pertinent information.
2. Sync HR and payroll systems
Processing payroll and using separate systems to manage data can be extremely time-consuming for payroll teams and can result in many errors. Integrating your payroll, time, and HR data into a single system, however, can help cut down on reporting time and make data management much easier – avoiding the “payroll crunch” at the end of the pay period. Organizations can also view their payroll data in real-time instead of waiting for batch processing to see changes and updates.
Consolidating workforce data and information in a single system can also improve the employee experience. In fact, Ernst and Young’s 2019 Global Payroll Survey revealed that payroll leaders have begun to view payroll as a more integral component of the overall employee value proposition. Having a single employee record across payroll, scheduling, performance, and beyond builds a better employee experience as employees don’t have to manage their data in disjointed systems.
3. Digitize your data and information
Digitizing payroll data and reducing or eliminating paper documents saves effort and time in sorting through notes, paper checks, and time sheets. It can save time in other areas, as well, such as paying employees, generating reports, and delivering key information – such as tax forms – to the workforce. Managing data and information digitally will cut back on inefficiencies and make it easier to keep accurate records.
Further, COVID-19 has revealed opportunities for organizations to modernize their approach to payroll for the new workplace reality. Digitizing data and information in cloud software can help payroll teams minimize disruption to continued operations and pay their people accurately and on time from a remote environment.
4. Provide a seamless employee experience and reduce admin effort
Payroll and HR professionals have traditionally handled the paperwork and administration associated with updating employee records and information, which doesn’t leave a lot of time for other projects. Deloitte’s Payroll Benchmarking Survey found approximately 60% of employees are leveraging self-service through mobile applications, performing tasks such as viewing their pay and managing their schedules. Mobile HR and payroll solutions can empower employees to take control of their records and reduce the administrative burden for your in-house payroll team.
Mobile HR and payroll solutions can also provide employees with greater visibility into their payroll, allowing them to access their earning statements on-the-go. Changes to pay can be displayed at any time during the pay period, so employees can also get answers to potential payroll-related inquiries.
Organizations should explore new payroll solutions as well, like on-demand pay. With on-demand pay, employees can access their earned wages at any point during the pay period through a digital account on their mobile device. For employees, the flexibility in being able to access their earned wages ahead of the next payday means they can better respond to unexpected circumstances, reduce their reliance on loans, and have more control and oversight over their personal finances. According to Ernst and Young’s 2019 Global Payroll Survey, only 9% of organizations were utilizing on-demand pay. Employees today are looking for more pay flexibility as many people were furloughed, laid-off, or had a salary reduction. This is untapped opportunity for organizations to provide greater flexible pay options, which can lead to reduced financial stress and increased productivity.
5. Better manage compliance with technology
Many organizations lack adequate talent or resources needed to keep up with constantly changing compliance requirements, in addition to other critical payroll activities. Understanding and applying legislative changes is time-consuming, and many organizations will need to scale the payroll team as the business grows or contracts. However, looking for talent is a significant challenge on its own, as payroll talent is increasingly difficult to find. Deloitte’s Payroll Benchmarking Survey found that it takes four to six months on average for an organization to onboard credentialed payroll talent.
Technology that automates tax calculations can help teams save time, reduce risk, and scale more easily. Organizations that operate globally or that are looking to expand to new regions will need to stay on top of changing legislation in multiple countries and jurisdictions. Leveraging technology to automate tax rules in these jurisdictions can help reduce compliance risk so talent can spend more time focusing on strategic initiatives that drive the business forward.
Uncover efficiencies with a modernized payroll approach
Organizations that are able to cut back on costly errors and inefficiencies, scale payroll with business growth, and empower their people to manage their pay information can refocus talent and resources on other areas of the business. Modernizing your organization’s payroll approach and moving from batch-driven payroll to a real-time cloud software solution can help increase productivity, reduce cycle time, and achieve better results.
The future of payroll: Global, compliant, agile
Learn about trends in the global payroll market and the advances in payroll technology that are addressing the challenges global enterprises face.