The Future of Payroll: 7 Trends to Watch
Each year, the IRS issues billions of dollars in fines to business owners in the United States. In most cases, the penalties are for payroll errors. This is why finding a way to optimize the payroll process and reduce any mistakes is essential. Staying on the cutting edge of payroll technology and trends is the best way for a business owner to discover the right way to handle this essential part of their business.
The future of payroll will become more people focussed, those working in the department will need to be educated, skilled and knowledgeable so that they can answer queries and support their organisations employees in understanding their pay and reward.
82 million U.S. employees – or 54% of the American workforce – are affected by payroll problems
Modern employees have more choices when it comes to where they can work. This is why a business owner has to focus on using the power of technology to attract and keep top talent. Being able to get a consistently correct paycheck is one of the best ways to keep team members engaged and motivated.
Companies like HR Payroll Systems are constantly looking for ways to innovate and revamp existing payroll technology. Since a business owner has so many options when comes to payroll technology, they need to do their homework before choosing and implementing new tools. Not only can this help them avoid mistakes, it will also give them a better idea of what is on the market.
Are you curious about the future of payroll? If so, check out more information below about the payroll trends you need to keep an eye out for.
#1. Automated Payroll Systems That Are GDPR-Compliant
Modern businesses are able to embrace the global community created by the Internet. In the past, an employee had to be located in the same town as the business they worked for. These geographic restrictions put a lot of restraints on a business when it came to who they could hire to fill an open position. As technology has improved, so has a company’s ability to hire people from all over the world.
Remote workers are used by a number of American-based companies. If some of the employees you use are located in European Union countries, you need to know about the General Data Protection Regulation (GDPR). In short, this law was instituted to ensure all personal data collected by businesses was protected. Adhering to the GDPR standards is essential when trying to avoid large fines for data security carelessness.
GDPR applies to all organizations holding and processing EU resident’s personal data, regardless of geographic location
One of the biggest trends in the world of payroll involves automated payroll systems that are GDPR-compliant. What this means is that any sensitive employee data you enter into these systems will be protected by the highest cyber-security standards on the market. With the implementation of these automated payroll systems, you will not have to worry about this sensitive information falling into the wrong hands.
#2. Pay Transparency is Essential
A recent study found that for every $1.00 a man earns; a woman only earns $0.79. As you can imagine this had people on all sides of the gender spectrum up in arms. Like it or not, the world we live in is gravitating towards putting everyone on a level playing field regardless of age, gender or even sexual orientation. Business owners are looking for ways to show the general public they are onboard with things like closing the gender pay gap.
The main tool being used to show this information is pay transparency. Sharing information with your team about the salaries being paid for different roles within the company is a good thing. Explaining how you devise this pay structure and getting feedback on how to optimize it for fairness and equality is a good idea.
Often times, a business owner will be unable to see all angles of this sensitive issue. This is why allowing employees to weigh in can be helpful. An objective view of the situation may help a business owner see where changes can be made.
Making compensation more performance-based is a great way to eliminate any unintentional bias. In order to make this performance-based model work, you will have to invest in employee performance evaluation software. Allowing team members to get raises based on hard work will also help you increase productivity levels.
#3. HR Technology Makes Payroll More Efficient
One of the biggest misconceptions most business owners have about HR technology is that it is too expensive. In reality, developments in this industry have made it more affordable and useful than ever before. A sound marriage of HR technology and payroll innovations can make your company more efficient.
When investing in HR technology, you need to look for programs that make time tracking and scheduling easier. The only way to ensure there is no payroll fraud occurring is by adequately tracking the hours your employees are working. This technology can also help you manage things like vacation time and requests for days off. Long gone are the days of handling these difficult and time-consuming tasks manually.
Not only can this technology help with payroll, you can use it to train employees and develop their talent. There are a number of programs on the market that allow business owners to develop customized training courses for their team members. Instead of hiring outside of the company to fill a position, you are much better off training an existing employee. Training an existing employee can save you time and money. Not to mention, this practice will help to boost team morale as well.
#4. Embracing Payroll Automation is Vital
Doing payroll manually can be both time-consuming and very inefficient. Humans make mistakes and when these mistakes are made during the payroll calculation process, it can cost a business owner a lot of money. Instead of doing payroll manually, you need to embrace the trend of automated payroll programs. This technology can help a business owner in a variety of ways.
For one, automated payroll makes wage calculation much easier. Trying to go over countless spreadsheets and calculate every hour the employees in your company have worked is a horrible idea. Using automation allows you to calculate basic salary and hourly wages in a hurry. You will also be able to avoid manually writing checks when investing in one of these automated payroll systems.
Payroll automation also simplifies the tax deduction calculation process. Making sure state and federal withholdings are accurate is vital. When first getting a payroll automation system, you will be able to code in tax rates. These coded inputs are then used to make deduction calculations.
If you are unsure about how to properly set up an automated payroll software program, consulting with IT professionals is a good idea. Failing to set this system up properly from the outset can lead to long-term issues, which is why allowing professionals to help is essential.
#5. The Rise of the Gig Worker
Hiring new employees can be both stressful and expensive. For some businesses, hiring full-time employees for certain jobs just doesn’t make sense. This is why so many entrepreneurs have started to use gig workers in place of full-time employees. In short, these workers are hired on a temporary basis to fill a role in the company. The length of time a gig worker is employed by a company will depend on the scope of the project they are working on and the services they provide.
If you are thinking about hiring gig workers, you need to make sure you have a payroll system set up to handle this temporary influx of manpower. There are a number of benefits that come with using these temporary employees. For starters, gig workers allow a business to add on manpower as needed instead of hiring on full-timers in the midst of an economic downturn.
Having the flexibility offered by gig workers also allows a business to take on large scale projects without fear of tasks going uncompleted. The key to utilizing the power of the gig worker is finding individuals with unique and useful skill sets. Luckily, there are tons of websites dedicated to pairing temporary workers with companies that may need their services.
Another unique benefit that comes with using gig workers is that they can become permanent fixtures if they are the right fit for your company. If you notice things are running smoother since the addition of a temporary employee, offering them a full-time position is imperative. Before you make this move, take the time to come up with a reasonable salary offer.
You need to realize that a gig worker can make a great deal of money with the right skillset. This means you have to offer them a great salary to get them completely out of the gig worker marketplace.
#6. Financial Wellness Programs are a Great Idea
If you are looking for a way to tie in payroll with employee benefits and HR, then instituting a financial wellness program is a good idea. In recent years, large corporations and small businesses have started these programs and have seen great results from them. Providing your employees with information and tools to get them on good financial footing is essential. These programs generally provide financial counseling for employees to ensure they are making the right decisions with their money.
Not only do these programs help an employee’s bank account, they can also be used to boost morale. Employees who are offered this type of perk feel like the people they work for actually care about them. If an employee feels this way, they are more likely to stay loyal. These programs are also a great way to boost employee engagement. If an employee is always stressed about debt and other money issues, they will be unable to perform to the best of their abilities.
Finding ways to reduce the financial stress employees deal with is the main idea behind these programs. Financial wellness programs can also help you lower employee healthcare premiums. Having too much stress can cause a number of mental and physical ailments. People under high levels of stress are more likely to have high blood pressure, anxiety and even heart disease.
These programs are also a great way to inform employees about the importance of retirement planning. Providing team members with the knowledge and tools they need to save for retirement is vital. Working with knowledgeable financial industry professionals is vital when trying to devise a winning financial wellness program. These professionals can help you provide your team with accurate information about how to handle their finances now and in the future.
#7. Cloud-Based Payroll Systems are the Wave of the Future
Most business owners are on a never-ending mission to find ways to make their operation more efficient. One of the best ways to increase efficiency and flexibility in your payroll department is by investing in a cloud-based system. With the power of the cloud, a business owner can view or alter payroll from anywhere.
This is especially beneficial if you have a remote employee who handles the managing of payroll. The last thing you want is to inconvenience an employee by making them come to your physical office to handle this task. With one cloud-based system, you can handle every aspect of your payroll from one easy to use dashboard.
Another benefit of using a cloud-based payroll system is the fact that it is easily scaled. This means if you experience rapid growth, you will not have to worry about replacing your existing payroll system. Investing in cloud-based systems that can actually grow with your company can help you for years to come.
A cloud-based system also offers employees the opportunity to check their own hours and put in requests for days off. The more useful tools you provide your team, the happier they will ultimately be. Before you choose a cloud-based payroll system, be sure to do your homework. Choosing a system with a reputation for being secure and accurate is essential. While you will have to spend money on this addition, it will be worth it.
The Future of Payroll: Implementing Your New Payroll Solutions
As you can clearly see, there are tons of payroll trends out there designed to make the lives of business owners and employees easier. Once you have chosen the right payroll tools for your business, working with IT professionals to implement them correctly is crucial.
The CIPP is passionate about the future of payroll, and this report will explore the survey results and industry developments to provide payroll professionals with some ‘food for thought’ regarding what the future may look like, as well as how they can start to think about new developments which may lead to a more strategic role within their organisation.
Wendy Dessler is a super-connector who helps businesses find their audience online through outreach, partnerships, and networking. She frequently writes about the latest advancements in digital marketing and focuses her efforts on developing customized blogger outreach plans depending on the industry and competition.
CakeHR is an award-winning HR software company that provides attendance, performance and recruitment management for customers worldwide. More information at www.cake.hr