People & Leadership

How to overcome payroll discontent

Payroll administrator

Picture this: it’s nearly time to run the monthly payroll and you’re manually updating the employee database. You’re worried you won’t get it done in time to give your employees their paychecks according to schedule. With the last-minute rush, you could make errors and mistakes.

54% of United States workers experience paycheck errors at some point in their career, according to the Workforce Institute’s most recent study. Most payroll issues stem from old processes and technologies that make paying employees harder than it should be. For example, most small business owners still use spreadsheets to track employee information and payments, which can take up valuable hours of productivity and easily leave room for errors. Note: the majority of the remainder of errors outside of technological issues are due to noncompliance with labor laws.

What issues does delay or error in payroll cause?

  • Tax fines or prosecution from the government.
  • Loss of money to the company.
  • Lack of credibility with employees.
  • Employees leave for alternate employment.

It’s very important to note that 58% of working Americans live paycheck-to-paycheck, so payroll errors are extremely costly errors and must not be taken lightly.

Many small business owners may choose to outsource payroll, but it’s not guaranteed that third-party processors will securely protect employee data, still leaving the business susceptible to inaccurate payments and non-compliance issues. Outsourcing can also be more expensive and might not be an option, depending on the company size.


Overcoming payroll discontent

Now that we’ve discussed a few of the common challenges causing businesses and employees payroll discontent, let’s navigate how to solve these traditional payroll headaches in four easy steps.

  1. Develop a payroll strategy that focuses on the employee

Why do I need to have a payroll strategy? Having a payroll strategy helps mitigate any unexpected financial hiccups, establishes a payroll process that benefits your employee base in the long-term, helps maintain operational costs, alleviates any anxiety employees may have about being paid and frees you of any headaches if you were ever audited.

  1. Establish a payroll cycle

By law, employers are required to have a payroll schedule. Every employer must determine if they want to pay their employees weekly, bi-weekly, semi-monthly, or monthly. Surprisingly, many small business owners forget to stick to that schedule. The day that you pay your employees should be different from the day you submit the payroll to the system for processing. Don’t forget to account for holidays and leap years in this schedule.

  1. Have an itemized paystub

64 million Americans say their paycheck stub is hard to read. 42 percent of all employees say taxes and deductions on their paycheck are confusing to read and understand. A simple step to overcoming payroll discontent would be to update your paycheck stubs. Provide your employees a more detailed pay stub that clearly outlines gross pay, deductions, and bonuses. This will help avoid any compliances issues and give your employees more clarity.

  1. Evolve your processes over time

As technology continues to evolve your payroll processes need to change with it. Invest in a payroll software that

Is easy to navigate and automated so that can you can pay your growing team, accurately, in just a few minutes, freeing you up to focus on what matters to your business.  Choosing a payroll software that is up to speed with technology and meets the needs of your employees ensures that your workforce stays happy and engaged.