The Internal Revenue Service (IRS) estimates that 40% of small and medium-sized US companies end up paying payroll fines each year. Most of these penalties are due to incorrect declarations or failure to deposit withholding funds on time.
It is not shocking because calculating payroll is not an easy task. When you consider factors such as employee wages and salaries, employee benefits and incentives, tax relief, etc., things quickly become complicated. Besides, each state has its tax regulations, so if you are not careful, it is easy to miss detailed information. Starting a business is very expensive, and you don’t want to add payroll fines to the expense list. However, due to technological advancements, the payroll accounting process can be easily optimized and executed smoothly.
With the advancement of technology in the human resources field, the future payroll seems to be more concentrated. It is vital to be abreast with the latest trends in the payroll industry to stay ahead.
The following are seven trends in future payroll expectations.
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Increasing Use of Cloud Technology
By 2026, the cloud-based payroll software market is expected to grow by more than $13.3 million.
Cloud-based computing allows you to access data from any location on any device. With the popularity of working from home, this is particularly useful for personnel departments that manage payroll remotely. This saves these employees the trouble of handling this task in the physical office.
Cloud-based software allows human resources, managers, and employees to access their salary information in real-time, including pending leave and PTO requests.
It also allows you to expand your business easily. When your organization begins to grow, you don’t have to worry about replacing existing systems. Your cloud-based payroll software can be extended with you.
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Embrace Artificial Intelligence
Movies with artificial intelligence (AI) will make you think that robots will one day replace humans. Although this idea may not match reality, you cannot ignore that in some industries, machines are replacing humans.
Automation has become more and more popular in various fields, including payroll, which has some huge advantages. Previously, payroll services were limited to calculating employees’ wages, paying wages, and generating simple reports. But now, the situation is changing, and there will be more demand in the future. In short, payroll automation is revolutionizing the way small or medium business owners pay. For example, it can help automatically classify employees and ensure that they are in the correct tax bracket.
Also, in this data-driven world, analyzing the large amounts of wage data collected has become critical. This analysis can provide actionable insights, help formulate the company’s budget, identify unnecessary expenditures, and contribute to the organization’s overall success and development.
Chat supports can be utilized to help employees deal with non-urgent requests. Therefore, now, employees do not need to use one department to run another department.
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Human Resource Technology Integration
Although payroll and human resource management are two different disciplines, they are interrelated.
There are many benefits of integrating payroll and HR software. First, the integrated system will enable managers or staff to access all basic information from a single dashboard.
Combining the payroll process with the best HR functions can improve the efficiency of managing employee data. A payroll management system with HR solutions will ultimately allow you to work smarter and save time.
Some small and medium enterprises believe that investment in human resource technology is too expensive, but this is not the case. Everyone can use HRIS at an affordable price, and the overall efficiency can be realized within a couple of months after the implementation.
HR software allows you to use functions such as time-tracking and planning. Moreover, if your payroll software is integrated with HR software, you can easily share this data between systems. This can ensure that salary fraud does not occur by accurately tracking employees’ working hours, so no one will pay under or overpay due to working hours.
Also, when you include all the data in one solution, the system can bring together related data to generate actionable insights. With the help of human resources and payroll system integration, it will enable organizations to create personalized reports that include detailed information about employees.
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Increasing Demand for Gig Economy
Technology allows people to work anywhere, which has led to a steady increase in the number of freelancers and odd jobs.
The economy’s transition from traditional and full-time jobs to a mix of third-party workers has complicated the situation. Old-fashioned old systems cannot handle the diverse, dynamic workforce well.
Payroll software can easily and effectively handle and manage the perfect integration of full-time employees and performance workers.
Payroll software can enable you to manage these temporary workers effectively.
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Financial Health Included in The Package
The employee consistency rate is directly proportional to employee satisfaction. If you want to improve work efficiency, you need to keep employees stay motivated. Many employees are unable to concentrate on work because they are worried about their financial situation. Besides, excessive stress may cause physical and mental illness.
The purpose of this is to reduce employees’ financial pressure and improve their morale to increase their productivity. As a result, many salary providers have begun to incorporate financial health plans into their systems.
A financial health plan may include financial counseling for employees, as well as guidance on topics such as the importance of retirement plans and how employees properly allocate their money. This can help ensure that your staff spends less time emphasizing the dollars in their bank accounts while focusing more time in the office and enjoying time at home.
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Payment Transparency
Many companies are working to make salary and salary information more accessible. It includes salary information of executives to part-time employees. Many of them are explaining how the organization’s compensation structure is designed. Help employees understand your compensation methods and how they are paid to promote fairness and equality within the organization.
It conveys company culture’s value through fair treatment and compensation, directly affecting your good employer brand image.
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Improved Data Security
In the past few years, new laws require payroll software to comply with GDPR. It means that any sensitive information you enter into the system will be automatically protected by the market’s highest network security standards.
Every company has a lot of employees’ information that needs to be protected. They store sensitive data such as salary, address, account number, and social security number.
Conclusion
So, the question is: Is your company ready to adopt payroll technology?
Technology is changing the way we do business. Although we may agree that implementing new technology may seem like a daunting task, once you choose the correct payroll software, you will quickly see the benefits it brings to your organization.
Interesting Related Article: “How Technology is Helping to Improve Payroll Management“