It would be great if payroll ran itself. But as a core business function with myriad possible nuances, payroll requires human intervention and oversight. Because of the details involved in paying employees, the process is often a pain in the side of many organizations. All it takes is one mistake to get your company in trouble with the law or alienate your talented staff.
While you need to ensure you cover all the details and get them right, inefficient processes can lead to employee frustration. If it takes loads of signed paperwork or weeks to make changes, team members will be both irked and less productive. Inefficient practices may also impede other business functions. Luckily, if you’re seeking to improve payroll efficiency in your business, here are four ways to do so.
1. Work With the Experts
Some companies don’t have the time or expertise to handle payroll in-house. This scenario probably rings true if you run a small business. But it’s just as applicable — or even more so — to a company that’s thinking about expanding internationally. Hiring and paying employees, especially global teams, can become complex and messy.
Another country’s labor regulations, national holidays, and payroll taxes may differ from what your company knows. Working with global payroll providers eliminates the confusion and complications that come with hiring international workers. These providers are experts in managing and streamlining payroll processes for companies that onboard global teams. Your business can pay workers on time, administer the right benefits, and comply with local tax rules.
Some providers also help businesses streamline the international hiring and onboarding process. Since many countries require companies to set up local legal entities in order to hire their citizens, the process can take months or years. However, providers with established legal entities in other countries can hire international employees on another business’s behalf.
Known as employers of record, these payroll providers allow companies to assemble global teams more efficiently. An EOR also ensures your business complies with international labor laws. You don’t have to pass over the most qualified candidate for the job just because they live in another country.
2. Go Paperless
Onboarding can be an exciting new adventure, but it may also cause feelings of stress and uncertainty. All the human resources paperwork new hires must review and fill out can add to some of the anxiety they feel. When onboarding processes involve actual paper, it’s less convenient for employees. They may worry about losing or damaging forms and having to send them back to HR.
In some instances, new hires may have to make appointments to fill out paper forms or turn them in. This cuts into their working hours and makes them feel like they’re continually being interrupted. Going paperless through self-service HR portals remove the inconveniences that paper forms and onboarding processes create.
Self-service portals also help seasoned employees when they need to change benefits, modify tax withholdings, or review paystubs. About three-quarters of full-time workers expect their employers to provide high levels of self-service. Access to self-service options increases employee satisfaction and simplifies payroll processes for them. Self-service portals also help HR teams since they don’t have to spend time reentering information into payroll systems.
3. Sync Platforms and Systems
Expense reports, vacation or sick pay requests, and time clock punches mean more work for HR employees. If separate systems don’t sync with payroll applications, HR teams must verify and enter everything manually. This can include approved expense reports, time cards, and vacation and sick leave forms. HR employees may also have to review and adjust time cards for hourly workers who forget to punch in.
Manual processes like these slow down payroll processes and create possibilities for mistakes. They also put more pressure on supervisors to review, sign, and turn in forms by payroll deadlines. HR directors may have to send reminders to department managers or track them down. While companies may have separate platforms for expense reports, PTO requests, and time cards, it is possible to sync them.
With platform integration, expense reimbursements, pay for time off, and time card data feed into a company’s payroll systems. Manual processes go away, and HR teams don’t have to spend time sorting through details. Also, more advanced payroll software puts expense reports, time off approvals, and time card functions into one platform. These apps eliminate the need for separate solutions and make it easier for employees to manage payroll-related requests.
4. Simplify Policies
Some organizations only hire workers on salary. Others have a mix of hourly, commissioned, and salaried employees. This mix often adds complexity to payroll processes and may introduce inefficiencies, especially if policies exacerbate the complications. For instance, having multiple payroll schedules for different types of employees can make HR’s job more difficult.
Frequent changes or complex pay structures can also complicate matters. Frequent modifications to commission structures or multiple structures based on sales territories make payroll processes too convoluted. Employees who work on commission may also become confused by changing and complicated payouts. They’re more likely to bombard HR with questions and complaints. Keeping it simple ensures employees’ time isn’t lost.
Policies that aren’t clear or require workers to jump through a bunch of hoops may also slow processes down. For example, a company may provide cell phone benefits, reimbursing the cost of an employee’s cellular service. But it becomes cumbersome if employees must submit proof of service and copies of billing statements each month. Setting a standard reimbursement amount and automating it across the board simplifies the policy and process.
Making Payroll More Efficient
Any company’s payroll processes can become inefficient without the right resources and levels of standardization. Sometimes it’s best to hand over the work to the experts or at least revisit complex policies and procedures. Doing so can create more positive employee experiences and remove significant weight from HR’s shoulders.