A payroll service is a third-party company hired to manage the payroll process from start to finish. The service logs employee hours, calculates earnings and deductions, and cuts checks or makes direct deposits on behalf of a company to its employees. More comprehensive payroll services also collect and organize payroll data into metrics that you can analyze to make more informed decisions.
How payroll services can help your growing business
Did you know companies with more effective data grow 35% faster? That's according to research we conducted with the IDG.You can use payroll service solutions to gain a deeper understanding of how healthy your business is from a financial point of view.
The total cost of salaries will be an obvious place to start if you want to understand your payroll data more. With these numbers, you can build other metrics into your analysis such as a return on investment (ROI).
High employee turnover is bad news. It may signify a deeper problem within the business when it comes to areas such as conditions, morale, and corporate culture. And it can cost money in lost productivity, recruitment, and training. Your payroll data can reveal what turnover is like in your business.
Analyzing data on sick days and vacation time will help you understand when workers are more likely to be absent and whether employees are taking their annual leave at the right time of year for the business.
If employees are regularly working more than their agreed hours, consider what this means in terms of productivity and the way people are working. You can find out whether it’s more cost-effective, for example, to hire part-time or additional employees.
Payroll teams are sometimes under pressure to find ways of cutting costs and improving efficiencies. With a training cost metric, it’s possible to walk that tight line between making cuts and ensuring employees are upskilled properly.
Across each of these areas you’ll find a huge amount of data to examine and, because it covers such a long period, it's easy to start spotting trends. With the right payroll services software, you can use this information to plan ahead, knowing that you have an up-to-date view of your business. Payroll should be the first place you look, before planning for the future.