New staff hiring and training can be pricey. However, high employee turnover can be even more costly, resulting in lost productivity. Collecting, entering, and processing payroll data for each pay period takes time. It may be done manually or with a fully automated payroll software system.
Streamlined Processes
Payroll and HR work closely together, and if the two departments don’t communicate effectively, it can cost your business money. HR needs information from payroll to make informed decisions on salaries, bonuses, and benefits; however, payroll must also be given the data it requires for statutory deductions, tax and national insurance withholdings, timesheets, and employee self-service.
Managing your business’s payroll manually is possible, but this is time-consuming and resource-intensive. A manual process also increases your risk of errors involving multiple people inputting the same data. An integrated payroll and HR solution is more accurate and reduces the amount of manual work that needs to be done. If your HR team isn’t spending so much time handling payroll systems, they can dedicate their resources to building strategy and other vital activities that improve efficiency and productivity.
It ultimately allows your business to reach more customers and achieve goals at minimum cost. When you use managed payroll services, your company can streamline the entire payroll process, allowing employees to access and update their personal information on one platform.
Reduce Errors
More than correctly categorizing an employee, making a tax error on a paycheck, or forgetting to file a payroll report can lead to costly fines. That is why many companies choose to outsource these tasks to payroll management firms or PEOs (Professional Employer Organisations). Payroll and HR services save money by reducing the number of mistakes made.
These include misclassification of employees, incorrect tax withholding calculations, and other errors relating to pay rates or additional payments like commission. Managing human capital is a highly delicate balancing act. It’s crucial to balance the needs of your people and your bottom line while keeping your employees happy, motivated, and productive. When basic administrative mistakes occur, morale can deteriorate quickly.
To reduce these errors, your systems must talk to each other. Using integrated payroll and HR systems increases data transparency, manual entries are eliminated, and your teams can focus on transforming the employee experience rather than fighting to get information from one system to another.
Increase Compliance
Business owners must comply with all government laws regarding payroll. Non-compliance can cost your business dearly in fines and harm its brand. A professional HR service provider will ensure you’re always on the right track by tracking government legislation and alerting you of potential non-compliance issues. Employee information changes constantly, from new hires to maternity leaves, house moves, promotions, etc.
Maintaining up-to-date records is crucial to avoid calculation errors like tax deductions and social security payments. An integrated payroll software system will help you keep track of all the updates, reduce error rates, and save money by eliminating needless data re-entry. A practical, modern workplace starts with a highly skilled team. Investing in training and development helps boost productivity and improve retention.
Outsourcing your payroll functions to a PEO or payroll service provider will also free up valuable in-house resources so your employees can focus on their work and the business’s overall success. It will help your business save on recruitment costs, training fees, and lost production time.
Increase Productivity
Managing payroll is time-consuming, primarily when employees work in different countries. Keeping up with the changing legislation in each country and updating your HR systems to reflect these changes can also be problematic. High employee turnover can also cost your business money regarding recruitment, training, and lost productivity.
An effective HR strategy can help you retain your best talent and cut costs associated with high employee turnover. Outsourced HR can also save you money on administrative costs often incurred when manually processing payroll deductions, wage garnishments, and payroll taxes. Many of these services can be automated using a software system that integrates with your accounting and finance apps to eliminate costly errors and ensure that all payouts are made on the correct date.
When your employees receive their paychecks on time, it increases their morale and can increase productivity. Self-service features allow employees to access important information such as job profiles, leave days, and company announcements via their dashboard, saving your HR team’s time.
Reduce Stress
It takes a lot of time to do payroll, and that time could be better spent on other HR tasks that deliver commercial value. When HR is freed from handling the business’s payroll systems, they can focus on strategy and other activities that help meet productivity goals. Depending on the firm that handles the business’s HR services, they may also save time by handling tax and year-end reporting.
It can cut days or hours off HR staff members’ workloads and stop expensive mistakes from occurring due to manual data entry or legislative research. Outsourcing a company’s payroll processing can also save money for smaller businesses that don’t have enough in-house resources to hire an HR team.
It is especially true if the firm offers a total HR outsourcing solution like a professional employer organization (PEO) that handles the business’s payroll processing and other associated HR functions, making it easier for the firm to scale up as headcount increases. A modular managed payroll service will allow data at set-up and throughout the process to be shared between other HR modules so that a firm only pays for what it needs.