Payroll Processing Challenges Faced By The Manufacturing Industry


HR professionals are the most dynamic group of people in a company. The critical role encompasses the handling of several responsibilities such as recruiting skilled employees and workers, payroll processing, maintaining a healthy company-employee relationship, communicating terminations, and accepting resignations. Management and finance professionals in the manufacturing industry have additional challenges since they deal with workers of all backgrounds.

Manufacturing industries, whether big or small, are comprised of a huge spectrum of skilled individuals. From logistics workers to CEOs, the industry displays a wide range of salary diversity. The processing team has to pay heed to each individual’s position and comply with the respective labor laws applied to them. They need to be cognizant that they need to produce accurate payslips with the best available resources at hand.

One of the many monotonous tasks faced by these professionals is the processing and finalizing of payrolls for the salaried and temporary workforce of the company. The job poses multiple challenges for the processing team that can hinder the task and causes repetitive verification of the large data set.

The various hassles in payroll management are the sole rationale behind its tedious nature.


Compliance with local laws.

Many different states and countries have their own labor laws and regulations. These laws are framed with respect to employee rights, the authorization of businesses, and worker unions. Such laws need to be respected and taken into account when dealing with the payroll processing of laborers, work-from-home, and freelancing employees (which has become the new norm in the past two years). 

A lot of time is consumed in researching these regulations and assigning their applicability to the concerned employees so that their payroll calculations comply with the local laws. This aspect is important as it avoids litigation and lands the company in legal trouble. 


Performing Calculations

The operational duty of the processing team starts with calculating the innumerable deductions and additions to the final salary. Each employee is unique, and so are the calculations that go into the construction of their payroll. 

Multiple factors are taken into consideration during computation depending on the output, taxes, union memberships, and bonuses offered. Daily wage and line workers’ payments depend on their attendance and the hours they put in.

The team has to draw up a plan where it computes leaves and overtime undertaken by the employee, adding and deducting the values settled on a contractual basis with the company. 

The team authenticates the taxes applicable on the given amount and deducts those costs after careful consideration. As for the employee benefits and bonuses; these values are added. 

Hence, abundant time is devoted to scrutinizing each employee’s data. Classifying each section of employees and calculating their data is a long and daunting task.


The Occurrence of Errors

The wearisome task of payroll processing is prone to human errors if done manually. Employee data can be missed, some input values can be missed, deductions are not filed, etc. The team can put the employee’s trust in jeopardy if errors are not rectified and satisfactory results are not obtained. The team has to perform with accuracy and eliminate as many fallacies in the books as possible. The inevitability of mistakes in an overworked HR team restrains the punctual payout of payrolls. The rights of laborers are threatened when less than the agreed payment is received by them.


Outdated Software

The processing teams are equipped with the technology provided by the company. The technical aspects are the investments from the organization’s side, and the team has to make the best of them. It is a futile practice to update the latest software on a regular basis, as the company would lack the funds or relocate them to other critical business activities. This results in delays in the process and late payouts.

It has been found that up to 49% of employees quit work after two late paychecks and look for a more disciplined pay structure.


Excessive Time Consumption 

The time and energy of an HR professional should not be drained by only one task of their spherical approach. Payroll processing can become stagnant if enough lucrative resources are not utilized, and they may be unable to attend to other things. The tasks of hiring and communicating also demand an equal degree of attention to detail. The dedication of a professional depends on the efforts they make in resolving employee issues. They need to make their presence available during such incidents.

The best solution to these problems in today’s fast-paced world is to outsource the processing of payrolls to a team of experts that offer such services.


Why Paysquare?

Paysqaure resolves all the challenges faced by the manufacturing team. We keep ourselves updated with the latest labor and taxation laws, reducing the burden on the organization. At Paysquare, we dedicate all our resources to processing payrolls that are error-free and delivered on time. 

Paysquare focuses on completing the organization’s financial responsibilities with accuracy and in a secure way. We aim to preserve the dimensionality of HRs, which makes them the most crucial element for the smooth functioning of the company. Paysquare allows the company to concentrate all its skills on maximizing productivity without stressing about the exhausting payroll process.