What useful payroll strategies can be adopted in 2021?
- Automation of the payroll system – The implementation of digital technology can make the HR and payroll services in India much simpler during the present condition. The manual system can be erroneous in maintaining the salary details of employees, mainly when many of them are still working from home due to the pandemic. The automation of the payroll system can ensure that all details about the payroll of employees are accurate, without causing any error while tracking the financial details of employees. Thus, companies of all sectors should develop cloud-based payroll structures.
- Use of HR software for work schedule – All companies can make use of the latest HR technology, which will help in keeping track of all employees’ performances easily. This software is affordable even for small and medium-sized companies. It also decides the working schedules of employees even if they are working from home. When this software is integrated with the automated payroll system, the job of HR becomes much easier in maintaining the payroll structure of the company.
- Inclusion of financial wellness program – The productivity of employees can be boosted only if they are satisfied with their remuneration. Nowadays, all are worried about the financial condition during this present situation. So, companies need to include a financial wellness program for motivating employees to do better work. The retention of employees is an important factor while deciding payroll strategies for the company. It will pacify all employees about their financial wellbeing while working here, which will be reflected in their work as well. Such a program may also include financial counseling of employees, to educate them about retirement and investment benefits.
- Increase in payroll outsourcing services – Due to the growth in the trend of working from home, many companies now prefer outsource services for different kinds of official jobs. The payroll structure of these outsourcing jobs is quite tiresome for HRs, as they need to put in lots of time and effort for it. There are certain security measures adopted by companies and HRs, to safeguard the interests of people working in outsourcing jobs. These measures also prevent the risks of frauds and thus, it is a worthy investment for every company that is more interested in hiring third-party payroll services.
- Bringing transparency in salary information – Companies need to make salary structure more trustworthy for employees, to improve the company’s relationship with them. They should be able to have access to the salary information uploaded online, where they can see the amounts they receive as salaries and the works for which they are paid. Top payroll providers in India now prefer to disclose their salary-related data to employees of all levels, to bring a sense of equality among them.
Main advantages of payroll outsourcing for the next financial year
- Effective in cost-cutting – Every company needs to pay a higher salary to its employees in direct payroll, compared to ones engaged in outsourcing jobs. Therefore, company management can save a large amount of money, by accepting payroll outsourcing services. It is a cost-effective process for small and medium companies, where money can be saved by reducing the number of in-house payroll employees. Companies do not need to pay additional benefits to their outsourced employees, which is a financial relief for companies with limited funds.
- Saves many working hours – The recruitment of direct payroll staff needs a lot of time, even a few days for completing the entire process. Moreover, HR officials need to spend time tracking the performance of payroll employees and calculating their benefits. Thus, the employment of outsourcing services is a time-saving step among vital payroll strategies. HRs can also save the time spent in double-checking all the data, as they do not need to look after too many minute details of outsourcing staff.
- Improves the overall productivity – The outsourced employees work harder than in-house payroll staff, as they need to prove their capability to get more work. Thus, it is seen that the productivity of the company can be boosted to a huge extent with the payroll services. Outsource employees can accomplish their jobs much faster due to their efficiency and enthusiasm. Thus, there is hardly any need of repeating any task done through the outsourced staff.
- No need to hire payroll experts – Usually, knowledgeable and trained experts are needed to take care of all important functions, like accounting, HR work, tax laws, and data security. Small companies can save the money and effort of recruiting such experts to handle all the tasks related to in-house functions, by outsourcing most of their jobs. No senior professionals are needed to train these outsource staff, which is a prime advantage of outsourcing payroll.
- Easy access to the HR system – Now, payroll outsourcing in HR has enabled all employees to have access to the invoices and payroll reports of a company. When new employees join the company, they can also check all the benefits offered to them. They can also communicate with other colleagues through this online system, where their training records are also stored.
- Boosts the security of payroll data – Companies often experience theft of their stored data, which can be harmful to their business. Such unethical activities are usually done by in-house payroll employees and it can be stopped by hiring more outsourced staff for all office jobs. Moreover, online payroll systems can be more secure for safeguarding confidential information about employees of the company. The technology used in these payroll systems can also be used to store customers’ data, which is stored for providing services to clients of the company.
- More peaceful for the employers – The employment of outsourced professionals for most of the office jobs renders peace of mind to company owners and senior managers. It saves them the pain of going through the recruitment process for hiring in-house payroll employees. They do not need to worry about payroll compliance in India. Thus, they can concentrate on ways of increasing business profits only, without any tension about employment.
Few common payroll challenges faced by companies
All large and small companies face several challenges while deciding their payroll strategies, which they solve to make the payroll process simpler. Now, most companies are switching from a traditional paper-based payroll system to online processing, to make this system faster and more effective. Though there are several resources and software for creating the payroll structure, management always comes up with certain issues that they need to sort out.
- Inaccuracy in payments – If there is any error in the payments of employees, they may receive either more or less salary than mentioned in their payroll sheets. Such mistakes done by payroll management authorities can also affect the monetary benefits, pensions, and taxes of employees. The wrong entry of data causes extra work pressure on HR officials, who may need to put in greater effort to rectify all information. Moreover, this administrative flaw may cause too much delay in payments, resulting in employee dissatisfaction.
- Inefficient payroll software – Often payroll managers find the software used in payroll systems insufficient to do the desired jobs satisfactorily. So companies need to invest in worthy payroll software programs that can produce error-free payroll structures. Unsuitable software can result in the loss of time and money of the company, by producing erroneous payroll data. Now, modern software can easily track all employees’ performances, based on which their payments are calculated mechanically.
- Wrong categorization of an employee – There are various categories of employees in a company; like permanent, temporary, part-time, full-time, and contractual. If an employee is placed in the wrong category on the payroll system, tax officials may create trouble for the company. Moreover, error in this matter can have an adverse effect on the pension and retirement benefits as well.
- Unorganized payroll records – The traditional way of maintaining files of employees’ service records often resulted in the misplacement of important papers. However, the use of software and integration of payroll functions with the HR system has things easier and more organized in offices. The workflow also becomes smoother with the uniformly arranged data with the help of relevant software.
- Maintaining payment dates – Payroll managers find it quite challenging to remember all the dates on which they need to make various payments of taxes and employee salaries. The maintenance of a diary does not help much in this regard, which can be solved now by the installation of payroll software. Moreover, the working limits of outsourced staff and foreign employees on temporary work visas are also maintained accurately on that software system.
- Protection of data and privacy – Many companies find it very difficult to protect their stored data in the company systems. Even online payroll records and other vital data can be stolen away by hacking the company sites. So the latest technology should be used to prevent such theft of information, which will protect confidential data from all types of malpractices. Hence, employees’ personal details remain secure and the privacy of the company is strictly maintained with the help of these software programs.
- Abiding by all employment rules – The laws regarding employment change very frequently and all commercial organizations are supposed to remain updated to these changes. If a company fails to abide by the current versions of these regulations, it may face dire consequences of violating any employment or tax law. Professionals involved in related jobs should understand the statements of these laws very clearly, to avoid misunderstanding the laws that can result in legal actions including penalties.
- Not having a backup of the data – Now, the automation of most office systems have made tasks easier for staff. However, third-party payroll vendors find it harder if no backup of the payroll data is preserved, mainly in the cases of in-house payroll employees. So companies need to spend on keeping a reliable backup of all the data of their payroll systems, which can be retrieved anytime later.