Enhancing HR efficiency with a Revolutionary Payroll Management System

First, let's start by knowing what a payroll management system is and how it helps the organization and the HR department. To understand it clearly, let us first look at how the HR department of any company is responsible for calculating, distributing, and maintaining the salaries of the employees working in an organization. This is why the payroll system is directly linked to the organization’s HR department. The people working in HR interact with it and will be affected by the efficient performance or lack of efficient performance of the payroll system.

In this article, we will outline several key points that will give you a detailed understanding of the payroll system.

The recent trend of using paid payment software applications instead of traditional methods like spreadsheets or paper has brought about a lot of changes. It has made the payment process faster while also making a lot of functionalities and processes clearer for the employees and the HR team.

For example, in the good old days, if an employee had to update his/her banking information, they would have had to obtain paper proof of the change from the bank, then submit it to HR. The HR then would have had to verify the new information, go to the bank/payroll processor, and submit a physical form notifying them of the changes in the banking information of one of their employees. The bank/payroll processor would then have had to verify those changes again and finally update it in their system. Could you imagine how much time it would’ve taken for this entire process to complete? Days, if not weeks! But today, it takes less than three minutes for an employee to log in to the payroll portal, click into the update section, and update their banking information.

This is progress.

Let us now look at what challenges HR professionals face today and mistakes, both common and not-so-common that can be corrected with the help of a properly designed, high-performance payroll management system.

Payroll Management Challenges for HR

In recent years, technology has infiltrated the payroll landscape in many ways – bringing flexibility in pay and innovating time reporting. Nevertheless, even tiny errors in payment processing can harm users – losing hard-earned money is tough. Thus, organizations should consider it an integral part of their business processes. A business thrives when employees are happy, and paying salaries correctly and on time can make them happy. This is why we refer to payroll as one of the key pillars of success in any organization.

Numerous factors come into account while managing payroll processing – employee records, leaves, bonuses, taxes, and more. The payroll management systems can help unravel the challenges associated with managing these factors, as it can get overwhelming when your organization deals with several employees. Payroll software is a savior in such cases – it helps you get the desired data at the requested time. It won’t be surprising to know that each organization wants to retain the best talent. And retention strategies exclusively depend on the benefits and payroll administration – we can’t agree more with this.

Also Read: 5 Trends That are Like to Shape the Future of Payroll Processing

Payment errors from HR management

Now that you are aware of the payroll challenges, you must acknowledge common errors that might occur while managing the payroll of any business. Most of these errors are unintentional and caused due to traditional age-old working methods. The most common mistakes in payroll processing from HR management are irregular payroll cycles, incorrect overtime calculations, delays in providing tax forms, tax calculation errors, incorrect categorization of employees, delays in tax deposits, vulnerable payroll data, and more.

Payroll is crucial to the employee experience (EX). A hassle-free and smooth payroll process are the least an employee can expect in exchange for the services – any errors or miscalculations can lead to dissatisfaction. Moreover, these unforeseen errors can expose your organization to compliance risks, loss of credibility, and financial penalties.

This is where the payroll management systems come into the picture. They enable management teams to access desired data, get analytics, create reports, automate payroll cycles, tax calculations, and more. It entirely depends on the companies and what they really need in their payroll system.

Mistakes that HR generally makes without proper payroll systems in place

• Missing payment deadlines is something that can essentially create a sense of mistrust in HR and the organization, in turn affecting employee performance.
• Clearing past payments can sometimes be an issue. In many unforeseen circumstances, organizations might run into a financial crisis, leading to employee pay cuts. The organization has to pay these pending payments after a while, which can only be possible with adequately maintained records.
• Vulnerable payroll data is the most significant risk of all time. Sometimes organizations find it hard to back up essential payroll data, or even if they have a backup, it is highly vulnerable to risks if handled manually. Payroll management systems make sure your data is safe.
• For organizations having thousands of workers, it gets overwhelming to calculate the taxes. Moreover, manually handling taxes for larger sets of employees can get you in trouble.
• Most times, HR face problems in the classification of employees. It can significantly impact the payroll, as the roles should be carefully considered.
• In today’s working scenarios, most employees work from different locations, and some work at their convenient hours. Calculating salaries for each, including their overtime, gets complex with manual processing. However, with a payroll management system, you can never go wrong with calculations.

Impact of Payroll Deficits on the Employer

Running a successful business is not just about making money; it’s about your organizational reputation, employee satisfaction, and growth. Nevertheless, some organizations often misinterpret the true definition of employee satisfaction. If you want your employees to work with the same performance, they need motivation and clarity from HR. Having bugs in payroll processing cannot make them happy or motivated. Such unforeseen circumstances tend to slow down their work and efficiency – they might also think of switching to another organization. These may seem like trivial changes, but they can have a significant impact on your business.

How outsourcing can improve HR management and employee relations

Here’s how compensation management can help improve employee and HR management relationships.

• If you roll out monthly wages on time, employees will not consider bothering HR.
• You can never go wrong with calculations – monthly salaries and exact deductions.
• HR can focus on more priority tasks without spending too much time on cost management.
• Accurate classification of employees and salary calculation can lead to better payroll cycles.

Payment management system stats

These numbers will give you a brief idea of how payroll management systems have been revolutionary for organizations:

• Most workers in the US – up to 93% – are paid by direct deposit. This makes it imperative to record all the payments precisely.
• The vast majority of employees – 93% – believe their wages are paid on time. However, we must consider the remaining 7% too.
• Around 60% of employees say they are confident that the calculation and other deductions made are accurate, while the remaining may still be in the tragedy of something that went wrong.

How does the compensation management system allow HR management to avoid mistakes?

Deploying a payroll management system is no different than adding an excellent HR resource to your team. However, the payroll management system can perform all tasks that humans cannot without any errors.

• Manage employee files and documents such as salaries, past performance, appraisal documents, and tax sheets.
• Follows a specified payroll cycle to ensure everyone gets their salaries on time.
• Keep track of employee performance and give them feedback.
• Recognize the best performers and design reward systems for them.
• Access payroll data with ease and security to have a better understanding.
• Automate the majority of payroll tasks, leaving no room for errors.

It’s a wrap!

Exela HR Solutions is a leader in HR outsourcing and ensures you get the best-in-class services. With Exela HR Solutions as your HR partner, you can never go wrong with your payroll processing, instantly increasing employee productivity and satisfaction in your organization. From classifying employees and calculating their wages, deductions, taxes, and other benefits to streamlining payroll cycles for timely payments, Exela HR Solutions can get it done for you. Get in touch with our experts to design the best HR strategies for your business. Get Exela HR Solutions and propel your business into the future!

Sources: google.com | en.wikipedia.org | reddit.com | twitter.com | quora.com | paysquare.com

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.