Top 5 Payroll Trends to Follow in 2020
Employees today have more options than ever when it comes to choosing where to work. This is why business owners are going the extra mile and using the power of technology to attract and retain top talent. A carefully deployed payroll management system can help make a huge difference in keeping team members engaged and motivated in today's highly competitive, employee-centric job market.
Payroll outsourcing services are constantly looking for ways to revamp their existing payroll technologies. As the workforce continues to go digital, new payroll trends follow suit. Here are the top five payroll trends to look forward to in 2020.
Trend 1: Pay Transparency: Pay transparency gives employees access to information about the salaries being paid for different roles, from top executives to freelancers, in addition to an explanation on how this pay structure has been devised.
Many businesses are moving toward pay transparency and making compensation more performance based. This promotes fairness and equality among employees, and motivates them to work hard as they know their pay will be determined by their performance, removing any chances of bias.
Trend 2: Automated Payroll: Doing payroll manually can be a time-consuming and an inefficient process. Humans are bound to make errors during the payroll calculation process, which can cost entrepreneurs a lot of money. According to the IRS, 40 percent of small- and medium-sized companies pay payroll penalties of $845 each year on average for late or incorrect filings.
This is giving rise to many businesses embracing the trend of automated payroll systems. This technology can help entrepreneurs make wage calculations much simpler. In addition to allowing them to calculate salary and hourly wages quickly by taking state and federal taxes and other components into consideration, automation helps them avoid manually writing checks to their employees. Although some small businesses don’t have the technological capability to do this, many are turning to payroll outsourcing services to ensure they stay on the cutting edge.
Trend 3: Integration with HR Software: There are a number of benefits associated with integrating payroll and HR software. An integrated system helps increase efficiency in managing employee data. A human resource information system (HRIS) includes such functions as time tracking and scheduling.
By integrating it with payroll, business owners can pool together relevant data and easily share it across systems to generate actionable insights. Integration of the two systems enables them to create personalized reports that include details on employees and their compensation packages. This ensures that no payroll mistakes occur by accurately tracking working hours of all employees. If you have trouble setting up these systems, consider using a payroll outsourcing service to help.
Trend 4: Increased Use of Cloud and AI Technologies: These technologies are set to play an increasing role in managing payroll remotely. Cloud-based payroll systems allow HR personnel, managers and other employees to access their payroll information in real time. These systems also help business owners protect their on-premise payroll software from cybercrime.
In today’s data-driven world, it has become important to analyze the vast amounts of payroll data being generated daily. Artificial intelligence (AI) helps with that, by providing actionable insights that can help shape an organization’s finances, identify non-essential expenses and contribute to the overall success of the organization.
AI also helps with automatically classifying employees and ensuring that they are in the correct tax brackets. Additionally, AI chatbots can be employed to handle non-urgent requests from staff members.
Trend 5: Rise of the Gig Economy: Hiring new workers can be both expensive and stressful, and hiring full-time employees for specific projects just doesn’t make sense. That’s why many business owners have started using gig workers in place of full-time employees. These freelancers are hired on a temporary basis to fill a role in the company.
Entrepreneurs are increasingly deploying payroll systems to keep track of the work done by the gig workers and to pay them on time.
By staying on top of these new trends on your own or by hiring a payroll outsourcing service to handle it for you, your business can evolve with the shifting payroll landscape.
