Employees are the backbone of any organization – we all know that. They are the wheels that keep the business moving, which is precisely why it is important to take their needs and feedback into consideration. When it comes to employee satisfaction, it is no secret that payroll processing has a huge role to play in the employee journey – the smoother the payroll processes, the happier the employees. Unfortunately, traditional and outdated payroll systems make the payroll process cycle exceptionally time-consuming and error-prone. This can cause delays in payments and financial discrepancies, sooner or later leading to decreased employee morale and productivity.
According to a study, 29% of businesses use older (10 years or more) payroll systems.
Nevertheless, for just about any roadblock caused due to traditional methods, modern technology has a solution. New-age tech like Artificial Intelligence (AI), Machine Learning (ML), and Cloud technology are taking over the market, furnishing best-in-class solutions to organizational processes worldwide – with payroll no exception. Unlike traditional payroll processes, integrating modern technologies or outsourcing payroll ensures timely payments and a hassle-free, smooth employee experience. As a result, organizations are increasingly adopting a modern approach to HR for improved employee engagement and retention techniques.
A study stated that 40% of organizations are more likely to modernize their payroll systems by 2023.
As employees nowadays are more attracted to a more consumer-like, mobile-first experience while dealing with HR, organizations must provide them with modern, easy-to-use HR tools. Here are the top 5 reasons you should consider modernizing your payroll processes.
Top 5 reasons you should modernize your payroll processes
According to a study, business owners spend almost 5 hours calculating, filing, and paying payroll taxes.
If you are operating payroll internally, you must have noticed the excessive time it takes to complete even the most common tasks. This is because payroll entails more than just paying wages – it involves maintaining employee records, calculating wages, filing taxes, and issuing pay slips considering the deductions. And using manual processes such as spreadsheets can take you nowhere. This is where the need for an intelligent solution comes into the picture. With a cloud-enabled payroll system, it becomes easier than ever to perform payroll tasks in a matter of minutes. Moreover, outsourcing payroll services is yet another lucrative option, as long as you find a payroll services provider that suits your unique HR needs. Payroll outsourcing solutions take care of your daily, weekly, and monthly payroll tasks to alleviate your burden and allow you time to focus on revenue-generating activities.
Payroll is essentially repetitive – spreadsheets to update daily, time and attendance data entries, and up-to-date documentation for future references. When businesses use manual processes for payroll calculations, human errors can creep in easily. This might lead to overpaying or underpaying an employee or miscalculating their leaves, ultimately lowering employee morale. In contrast, automating these repetitive tasks leveraging robotic process automation (RPA) and other technologies can eliminate errors and reduces the time required for the end-to-end payroll process.
Almost 70-80% of repetitive, rules-based activities can be automated.
Almost half of the small businesses get fined (over $850/year) for late or missed tax payments.
There are specific compliance requirements that businesses need to adhere to. Apart from the usual expenses, even a slight mistake in the payroll or tax filing can lead to unforeseen circumstances, such as penalties or legal actions. Integrating automation in your payroll processes helps cut costs, reduce payroll errors, and maintain compliance requirements. You won’t need to learn new tax tables or monotonously update spreadsheet formulas anymore.
Businesses that opted for automated payroll systems have witnessed an 80% reduction in all payroll costs.
Moreover, opting for payroll outsourcing is the greatest choice of all time – payroll outsourcing companies ensure your payments to employees and tax liabilities are accurate and timely, helping you avoid penalties or legal disputes.
When it comes to maintaining the sensitive payroll data of thousands of employees, organizations often make mistakes relying on manual processes. As a result, it becomes exceptionally overwhelming, potentially leading to increased errors or data loss, costing organizations a small fortune. On the other hand, an automated payroll system can put robust financial control in place, giving payroll teams better visibility into transactions through audit trails and a set of rules to help prevent potential fraud.
Elevated Employee Satisfaction
Satisfied and enthusiastic employees are all an organization can ask for, apart from revenue. The more you keep your employees engaged and productive, the better they can contribute to your business’s success. Modernizing your payroll processes ensures timely and accurate payments to employees. Moreover, digitized solutions give your employees the leverage to explore self-service platforms, enabling them to access employee data. Today, more than ever, employees care about their experience throughout their employment tenure. This is what needs to be acknowledged.
Payroll modernization trends
There are countless organizations out there that need a payroll overhaul. If you are one of them, these trends are for you. Here are the payroll modernization trends that will help your organization stand out in the modern business world.
With the emergence of hybrid and remote work cultures, significant changes have occurred in the business world. And the primary reason behind these changes is the challenges organizations face in keeping employees engaged and productive. Tech trends like cloud technology have been the savior of organizations incorporating these changes. Cloud technology enables employees and HRs to collaborate in real-time through databases, abjuring the need for expensive, static server deployments to host data and applications. In addition, this also helps organizations support a geographically distributed workforce more quickly and efficiently.
Cybersecurity for HR & Payroll
Security is of utmost importance to any organization. With the emergence of advanced technologies and tools that foster continuous connectivity through the web, cybersecurity has become a greater priority for businesses of all sizes. Unfortunately, the lack of direct physical oversight has introduced negative user behavior trends. However, the real threat lies in IT teams’ limitations in covering all the endpoints of a distributed network. Additionally, due to the sensitive data handled by payroll systems, cybersecurity becomes a top priority for businesses looking to safeguard their data from malicious attacks.
Any errors in the payroll can cause the organization reputational and financial damage. Moreover, businesses must keep abreast of the recent employment and tax laws in all the company’s jurisdictions. Small to medium size businesses usually lack the know-how and capital required to manage payroll effectively. As a result, several business owners are turning to payroll outsourcing to eliminate this stress. Outsourcing payroll ensures efficient and timely management of payroll processes, technological updates, and better compliance and reporting.
It’s a wrap!
In a nutshell, modernizing payroll processes help keep your business ahead of the curve. The above reasons and payroll modernization trends will help you understand the payroll landscape. At Exela HR solutions, we offer a wide range of solutions to suit your unique business requirements and HR needs. Talk to our experts today to get started with a payroll modernization strategy for your business with Exela HR Solutions!
DISCLAIMER: The information on this site is for general information purposes only and is not intended to serve as legal advice. Laws governing the subject matter may change quickly, and Exela cannot guarantee that all the information on this site is current or correct. Should you have specific legal questions about any of the information on this site, you should consult with a licensed attorney in your area.