#payrolltechnology

Be it staffing or any other industry, payroll is one of the most complex and never-ending functions that any business has to execute. Within the payroll domain itself, different sub-functions need the involvement of different experts to carry out their tasks accurately and on time – month over month. Some of these sub-functions of payroll are: Payroll Taxation: Payroll taxation is a sub-function of the payroll process that involves calculating, documenting, and managing the various types of taxes the employees owe to the government. Filing of Returns: Some staffing employers might choose to file the taxes for each of their employees before a set due date each year. Payments Processing: This is the main activity of the payroll function in any organization. The complexity of this activity increases with the variations in geography and number of employees – the more people or offices in different states or countries, the more complex the payroll processing becomes. Disbursement Management: This is the process where funds are actively transferred from the payroll department to the employees after a set duration (Eg: 15 days or 30 days). This may include disbursements in the form of paychecks, direct deposits, manual checks, gift vouchers, cryptocurrencies, RSUs, etc. Compensation Structuring: Compensation structuring involves breaking down the employees’ salaries into various components such as base pay, allowances, tax deductions, health insurance premiums, food/entertainment vouchers, etc. These breakdowns are structured according to company policies and legal requirements and undergo restructuring if the policies or laws change at any time in the future. Salary Reporting: Salary data is fetched, calculated, and placed into different types of reports based on where the report is going. Salary reports are often reviewed by government authorities, upper management, third-party auditing companies, market research companies, etc. Payroll-related Grievance Redressal Management: Most companies, especially the ones smaller in size, are not equipped with automated payroll systems backed with the wonders of artificial intelligence and machine learning. As a result, humans calculate payroll, and because of that, a certain margin of error is always expected. When such anomalies arise, a grievance redressal management process is set in place to quickly rectify mistakes and control the impact of the damage. Payroll Integration with Other Software Applications: Most staffing companies will use different software applications to manage different processes of their business (or team). If two or more payroll-related applications cannot connect and share data with each other, the payroll team is often tasked with fetching data from one application and feeding it into another. This manual process is time-consuming and inefficient. Great payroll software companies, like Exela HR Solutions, are constantly updating their ability to support other software applications so that data management is automated for the payroll team that uses both applications. Full Compliance Management (Local, State, National, International Laws): Laws are updated regularly to account for the increasing complexity of the world that we live in. Laws related to employment are subject to change too. This makes the job of the payroll team difficult because it is their job to keep the business compliant with all applicable local, state, national, and international laws. Finding one person or a small team to do all the above tasks efficiently and accurately month-over-month would be like looking for a needle in a haystack. Each sub-function comprises a wide array of information that needs consideration and management. Therefore, each sub-function needs its own set of experts to avoid frequent inaccuracies and inefficiencies. 1.Efficiency: If you manage a company that delivers staffing solutions to businesses and you decide to run your entire payroll in-house, you are looking at a hefty investment, both in terms of time and money that will be spent on running ads to attract potential candidates, spending time interviewing, shortlisting, and finalizing the good ones, and paying them hefty salaries to manage everything related to payroll. Businesses often take this route and are successful at managing every payroll sub-function in-house but there are two big costs associated with it. The initial cost of setting up the entire team and the recurring cost of paying large salaries to these employees. This may not be ideal for most businesses, especially if they are new to the staffing industry with limited clients to service in the beginning. A more time and cost-effective approach to solving the payroll processing problem would be to outsource all of the payroll activities to industry experts. The two most significant benefits businesses experience with this approach are massive savings in both cost and time. They save time because they skip the part where they spend months finding the right people for their payroll team. They have experts onboard that are capable of managing every aspect of the payroll function accurately month-over-month. With a payroll outsourcing partner, you have instant access to experts. You save money because you pay per service instead of running the entire operation in-house by paying large monthly salaries to full-time employees. With payroll outsourcing, you also have the added opportunity to optimize reinvestments into the business by channeling the saved time and money into more productive arms like sales, marketing, or research and development. 2.Compliance: Payroll compliance is a serious topic in most countries worldwide. Governments require employers to be compliant in order to protect employees from any financial damage or manipulation. Failing to stay compliant, accidentally or otherwise, usually results in hefty fines or even class-action lawsuits. In 2019, McDonald’s and Uber settled lawsuits outside court for $26 million and $20 million respectively, for pay-related issues. Such expensive mistakes can be avoided when you partner up with payroll experts like us. Our compliance and regulation experts work tirelessly to make sure you are not exposed to any legal liabilities. Hiring experienced compliance officers in-house may take a toll on the overall budget of the company as they are rare to find and therefore, may not be affordable all the time. Paying for a per-service basis gives you access to the same level of expertise but at a fraction of the cost. 3.Turnover: The turnover rate in the staffing industry has risen steadily over the last two decades. This is not uncommon – most industries have a rising turnover rate for the same period of time. But what is unsettling is the data for the last 3 years. The staffing industry has been consistently experiencing an unusually high turnover rate of 25% to 28% for the last 3 years, which is expected to rise in the coming years. Statistically, this directly translates to the fact that 1 in every 4 employees will leave the organization within a year of you hiring them. This leaves businesses thinking of hiring payroll experts in-house at a great disadvantage. Hiring expensive payroll employees may be cheap, but re-hiring for that same expensive position multiple times a year is a far more costly endeavor that can quickly drain the company dry even before management notices the massive leak in the financial bucket. Instead, when you partner with a professional payroll outsourcing provider like Exela HR Solutions, these costs are entirely out of scope, keeping your business safeguarded from rising hiring costs and exorbitant turnover rates. Exela HR Solutions is a global leader in payroll processing and other HR services like recruitment process outsourcing, compensation and benefits management, learning and development, corporate training, and digitization. We offer payroll management services to multiple clients based in different locations worldwide, operating in various industries like healthcare, real estate, information technology, manufacturing, education, banking, and financial services. Our cutting-edge payroll technology that is fully developed in-house paired with our expertise in end-to-end payroll service gives our clients the competitive advantage they need to keep their costs low and efficiency high. Our multi-decade experience in the payroll space allows us to build custom solutions for your business if you have custom business requirements that need fulfillment. Get in touch with us today to learn more about our offerings: https://ehrs.exelatech.com Sources: google.com | en.wikipedia.org | peoplecentral.co | bullhorn.com | shrm.org 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.