Payroll is a business enabler.
It enables companies to compensate their employees who keep the business running accurately and on time. However, it’s not always a walk in the park since it poses administrative and financial strain to reconcile accounts and calculate taxes while processing payments.
Payroll, bookkeeping, and tax preparation are some services companies use regularly. Proactively planning for these helps human resource (HR) teams budget and strategize effectively. Small, medium-sized, and large businesses use payroll software to plan and ensure timely payments. On the other hand, startups that don’t have in-house HR usually outsource payroll services to HR freelancers or agencies.
Let’s go through some key statistics to understand the latest trends in the market.
These statistics give an overview of the need for automation in payroll services to avoid errors and mistakes. They talk about outsourcing payroll services, paper-based payroll, and the consequences of errors in employee payment processing.
of small businesses experience fluctuating payroll depending on how many people they employ. This can make it tricky to manage their cash flow.
Source: JP Morgan
Not every business has the resources or need to hire a full-time HR.
Startups in their initial stages generally process their payroll with the help of agencies and other part-time HR contractors. It works for them since they have a limited number of team members.
However, when they expand, they onboard a full-time, in-house HR and start automating different processes through software.
of companies don’t outsource their payroll technology. Outsourcing payroll is either too expensive, or they don't want someone else handling their financial information.
Source: Bloomberg Tax
Payroll errors are, unfortunately, common. Automating payroll services reduces repetitive, time-consuming tasks, helping HR teams focus on more critical issues.
Let’s understand if automation is trending in the payroll services market or if there are still a few gaps to fill.
of companies used cloud-based payroll systems in 2021, a rise from 34.8% in 2019.
Source: Alight
Employee retention is becoming a challenge for companies. People’s expectations of their pay are changing accordingly. Take a look at the stats below to get a background of people’s sentiments and expectations when planning and strategizing the payroll service.
of workers in the US had little to no savings and spent most of their paycheck each month in 2023.
Source: Forbes
Not getting paid properly frustrates employees and might even disconnect them from their work. However, these errors are common when processing payroll manually or through a paper-based system.
You need to automate these processes while complying with laws and employment regulations. Error-free payroll keeps your employees happy and your business running. Look out for these errors while processing payroll.
Pay employees on time while using automation to speed up payroll tasks. This will help you retain more people and motivate them to work. They won’t worry about when their next paycheck will be credited to their accounts, helping them concentrate more on their job.
Making payroll error-free is the basic step to attracting and retaining top talent while easing the strain on HR departments. With automated payroll, HR teams can better ensure compliance with regulations and focus on other critical activities that keep a business running.
If you want to explore how payroll software can help you prevent errors, check out the free payroll tools and see it for yourself.
Sagar Joshi is a former content marketing specialist at G2 in India. He is an engineer with a keen interest in data analytics and cybersecurity. He writes about topics related to them. You can find him reading books, learning a new language, or playing pool in his free time.
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