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5 Useful Tips For HR To Manage Payroll Efficiently

The HR department is often overlooked as a critical business function. In fact, the HR department plays an integral role in managing human capital within the organisation. Essentially, they are the ones that drive the heart of the organisation – the employees. HR need to oversee core HR operations such as recruitment, learning and development and compensation. In addition, they are also responsible for ensuring that employees are compensated in a timely and accurate manner.

Regardless of how strong the workplace culture may be or the plethora of career opportunities provided, an inadequate payroll process is enough to drive employees away. Hence, it is crucial to implement a robust payroll system within the HR department. When employees are paid on time and correctly, this eventually leads to happy and satisfied employees.

Here are some tips to efficiently manage payroll within your organisation:

Have a proper set of payroll policies and procedures

A set of clearly-defined payroll policies and procedures helps to keep payroll processes organised within the department. Payroll processing is a monthly recurring process that does not vary from month to month. It is important to keep a proper payroll documentation. This allows tasks to be completed quickly and efficiently. It also provides clear steps on the order in which certain payroll tasks need to be done. Clear documentation of payroll processes also allow new payroll staff to get up to speed easily as they can rely on the policies and procedures to understand the correct fashion in which certain payroll tasks need to be completed.

Manage payroll efficiently by keeping processes simple

Payroll itself has numerous steps. However, that does not mean that the entire payroll process has to be a complex affair. By keeping things simple, it helps to keep processes running smoothly with less time and effort from employees, this allows payroll staff to focus their efforts on more strategic payroll initiatives to drive further efficiencies. For example, switching from handing out physical payslips to e-payslips reduces the amount of paperwork as well as the time required to print and distribute physical copies to employees.

Plan out payroll calendar for the year

Payroll is a time sensitive HR function. Pay days are fixed on a particular date each month and statutory filing dates are typically determined by the respective statutory boards. This means that payroll staff have no control over the deadlines. Timely salary disbursement to employees is of utmost importance as it ultimately affects employees’ confidence in the organisation and employee morale. Late salary payments can result in disgruntled and unhappy employees. As a result, it will have a negative impact to the overall productivity levels within the organisation. Similarly, late tax submissions can incur hefty penalties and fines on the organisation.

A payroll calendar can help the payroll team to keep track of important dates throughout the year. For example, things such as payroll cut-off dates or tax submission dates. Besides helping payroll staff to stay on top of important payroll dates, a payroll calendar also allows payroll staff to plan their time more efficiently. It also buffer sufficient time for tasks that may require more attention and efforts.

Ensure the team is familiar with payroll software

Payroll technology has no doubt made payroll processing today much easier. Gone are the days of payroll calculations using excel spreadsheets. Payroll software today has made it easier to store, track and compute payroll records and statutory contributions accurately. However, the effectiveness of the payroll software is only as competent as the payroll staff’s knowledge of utilising the payroll software. The staff has to know each feature in the payroll system.

Many organisations tend to fall into the trap of implementing payroll software without fully utilising the features. They often do not know the full capabilities that the payroll software can offer. Identifying which are the essential HR processes and needs required by the organisation allows the HR team to effectively maximise the payroll software to assist with payroll processes. Concurrently, ensuring that payroll staff are well-trained in utilising the payroll software will ultimately allow staff to manage payroll more efficiently with technology.

Stay abreast with changes in HR legislations

HR and payroll legislation are constantly changing. To avoid hefty fines and penalties arising from non-compliance, it is important to stay abreast with ongoing changes in labour laws and regulations. This is particularly crucial for payroll staff that oversee regional employees.

Thankfully, there are plenty of ways in which payroll staff can stay on top of any changes in local statutory legislations. The easiest way is to subscribe to the electronic mailing list of local government agencies. That way, any changes in HR legislation will come through to your inbox as an email alert. Alternatively, organisations who outsource their payroll to an external vendor can rely on the vendor’s team of payroll experts. Most external payroll vendors have a team of payroll experts who consistently track any changes in HR legislations. They carry out the necessary system updates in the payroll software to ensure that payroll computation is compliant with the latest HR regulations.

Effective payroll processing is not just a critical business function. It is also crucial in maintaining employee morale and confidence. Payroll software can certainly help to alleviate some of the administrative aspects of payroll processing. At the same time, payroll staff also need to be competent and well-versed in payroll processes and legislations. This combination is what drives a highly efficient payroll team.

Use of technology

In Ernst & Young’s (EY) annual global survey of CEOs, they have identified human capital management as the single greatest challenge for long-term business growth. In fact, payroll cost is one of the biggest fixed costs that organisations are able to control. Yet few organisations are able to take advantage of payroll data analysis to ensure that the investments they make into their human resources are smart ones. This ensures that it aligns with their succession planning and long-term strategic business goals.

It is not surprising to find organisations working on outdated payroll systems. Recently, the Australian arm of UK cosmetic company Lush admitted to payroll lapses dated back to 2010, owing its staff up to AUD2 million due to outdated payroll software. A survey conducted by the American Payroll Association (APA) and Kronos also found that nearly half of the employers were not tracking key performance indicators in their payroll departments. This due to outdated manual processes and payroll systems. The survey results also showed that employers want digital payroll solutions that are intuitive. For example, they prefer self-service options for employees, on-demand reporting and analytics. Others include tracking of seasonal and freelance workers, and allowing other functions including senior management and finance to include payroll data in their own reports.

How well and quickly payroll can serve employees has a huge impact on the organisation’s engagement, branding, and productivity. An investment in HR technology, specifically payroll, can help to alleviate some of the common payroll challenges. It also enhances the overall employer and employee experience.

Manage payroll efficiently with ESS

With the changing workforce demographics, and along with it the evolving mindsets of Millennials, payroll is taking an active role in driving a positive employee experience today. Organisations are beginning to view payroll as an integral component of the overall employee value proposition. And there are various payroll strategies in which organisations can take to enhance the overall experience. Based on EY’s 2019 Global Payroll Survey, they found that many organisations are considering implementing an inquiry management system. The purpose is to enhance employees’ ability to log and track their question to payroll and HR. Other tools which organisations are considering include shared mailbox, case management system, and call centre.

Another key area that organisations can focus on to enhance employee experience is the use of self-service functionality. Allowing employees to view, interact and perhaps “own” their HR and payroll data can significant boost the overall employee experience. Concurrently, this improves employer and manager ownership to ensure that data is accurately and timely entered.

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