You also want to keep your company and employee information safe. However, according to a study by MoorePay, there’s been a 67% increase in a return to outdated payroll service solutions that use paper, telephone, or email input. 

The issue? These manual services make organizations susceptible to payroll scams, which are still on the rise (the FTC received roughly half a million reports of business and government scams in 2023, costing companies $1.1 billion). 

That’s why choosing a solution is incredibly important—it needs to align with your budget and organizational needs and be safe and secure, as it involves highly sensitive information. Because there’s much to consider when adopting a new service, we’ve broken down the different types and recommendations according to business size. 

Types of Payroll Services

When it comes to payroll, businesses have several options depending on their size, resources, and complexity. But we’ll be honest – there’s not a perfect payroll solution. Instead, each selection has benefits and drawbacks, and it’s up to you and your team to determine which is most appropriate for your business.

Let’s take a look at the most common types of payroll services available today:

Manual In-House Payroll

This method involves handling payroll manually, often through spreadsheets or handwritten records. Employers are responsible for calculating wages, taxes, and deductions, ensuring they file everything correctly and on time.

The Rose: Manual in-house payroll can be cost-effective, especially for very small businesses with just a few employees. You maintain full control of the process, and there’s no need to invest in third-party software or services.

The Thorn: As your business grows, manual payroll becomes time-consuming and error-prone. You’ll need to keep up with tax law changes, which can be challenging if you’re not constantly reading up on the newest rules. As you likely know, tax filings or compliance mistakes can lead to costly penalties and fines.

Bookkeepers

Some small to medium-sized businesses outsource their payroll duties to a bookkeeper. Bookkeepers handle day-to-day financial tasks (including payroll), saving business owners precious time and reducing the risk of errors.

The Rose: Bookkeepers offer more expertise than manual in-house payroll, especially when it comes to organizing records, calculating payroll, and ensuring taxes are filed on time. It’s a relatively affordable option for small businesses and provides some peace of mind.

The Thorn: Bookkeepers may not have the deep payroll-specific knowledge needed for complex tax issues, benefits management, or compliance with multi-state regulations. As your business grows, you might find that a dedicated payroll service is more suited to your needs.

CPAs

Certified Public Accountants (CPAs) are often hired to manage payroll, particularly for businesses that combine payroll services with accounting and tax planning. CPAs are well-versed in tax regulations and can offer guidance on how payroll impacts overall financial strategy.

The Rose: CPAs bring a high level of expertise and can ensure compliance with tax laws. They’re particularly helpful for businesses with complex payroll needs, like multi-state operations or special tax requirements. Their ability to handle accounting and payroll as a unified service adds value.

The Thorn: Their services tend to come with a higher price tag, which might be a barrier for smaller businesses. CPAs are best suited for larger organizations or those with more complex financial needs that justify the cost.

PEO (Professional Employer Organization)

A PEO offers a more comprehensive solution, co-employing your staff and taking over the management of payroll, HR, benefits, and compliance. Essentially, the PEO becomes the employer of record while you focus on running your business.

The Rose: PEOs are ideal for businesses looking to outsource a wide range of HR functions, not just payroll. They handle everything from benefits management to compliance with employment laws, providing a one-stop solution that can save time and reduce risk.

The Thorn: When partnering with a PEO, you’re giving up a certain level of control. While they manage many day-to-day HR functions, businesses may have less flexibility in choosing vendors or implementing specific policies, which might not suit every company’s culture or operational style.

Payroll Software Providers

Payroll software providers offer a great balance for businesses wanting to streamline payroll while maintaining control. These platforms automate payroll calculations, tax filings, and direct deposits, reducing the risk of human error and ensuring compliance. Most payroll software solutions are scalable, making them suitable for businesses of various sizes.

The Rose: Payroll software automates many time-consuming tasks, reducing the risk of errors while ensuring taxes and deductions are calculated accurately. These platforms often integrate with other HR tools like time tracking and benefits management. They also provide flexibility, offering control while automating routine tasks.

The Thorn: While payroll software providers are cost-effective, they still require some level of management. You’ll need your company’s personnel to oversee the process, input data, and ensure accuracy. Additionally, mistakes can still occur without expert oversight if the software isn’t set up or used correctly.

Payroll Companies

Payroll companies provide fully outsourced payroll solutions, managing everything from calculating wages and taxes to issuing payments and filing returns. This option takes payroll management completely off your plate, which can be a relief for business owners focused on growth.

The Rose: Payroll companies offer a hassle-free solution for managing payroll, ensuring everything is done accurately and on time. They handle tax filings and direct deposits and confirm compliance with federal, state, and local regulations. Outsourcing payroll to a company provides peace of mind for businesses looking to focus on their core operations.

The Thorn: A full payroll service comes with a higher cost, which may not be suitable for startups. Additionally, if the payroll company makes a mistake, it can reflect poorly on your business, even if you weren’t directly responsible.

How to Choose a Payroll Solution

According to a study by MoorePay, UK businesses reported 73% more frustrations with their payroll process in 2023 than in previous years, yet many are reluctant to switch providers due to the economic climate. Unfortunately, clunky or error-prone payroll processing can set finance teams up for failure, especially as the business grows and payroll needs become more complex. 

Therefore, whether you manage a small team or oversee multiple locations, finding the right fit can save you time, reduce costly errors, and ensure compliance with tax regulations.

Here’s a breakdown of which payroll options might work best for small businesses, medium-sized companies, large organizations, and franchises.

Small Businesses

For small businesses, cost and simplicity are usually top priorities. Manual in-house payroll might be an option if you’re running a very small team, especially if your payroll needs are straightforward. However, errors and compliance issues can become more frequent as your business grows.

A better option for small businesses is a bookkeeper or payroll software provider. Bookkeepers can manage payroll alongside other financial tasks, while payroll software automates the process, offering affordability and convenience. 

Medium-Sized Businesses

As businesses grow, so do their payroll needs. Medium-sized businesses usually need more robust solutions that ensure compliance with tax laws and reduce the administrative burden. CPAs can be a good fit for handling payroll while offering accounting and tax expertise.

Alternatively, payroll software providers are a scalable option for medium businesses. Software solutions can handle the increasing complexity of a larger workforce and multiple tax jurisdictions. Many payroll software platforms also integrate with HR and benefits systems, making managing payroll and employee needs easier in one place.

A system that integrates with benefits management increases enrollment accuracy and helps employees make changes easily, without assistance from HR teams. 

Large Organizations

Larger businesses often face complex payroll needs, including multi-state tax filings, detailed reporting, and benefits administration. Payroll companies offer fully outsourced solutions, taking care of every aspect of payroll, from tax compliance to issuing payments. This allows larger organizations to focus on their core operations while ensuring payroll is handled smoothly.

Large organizations might opt for a PEO for even more comprehensive HR support. By partnering with a PEO, businesses gain access to a full suite of HR, payroll, and benefits management services, helping them streamline operations and stay compliant with employment laws.

When your payroll and HR software integrate seamlessly, your data is centralized, and you gain deeper insights into your workforce. 

Franchises

Franchises have unique needs, especially when it comes to managing payroll across multiple locations. PEOs are often a great choice for franchises, as they can provide consistent payroll and HR services across the entire organization – confirming that all franchise locations remain compliant with payroll and tax laws, regardless of location.

Another option for franchises is payroll companies, which can handle multi-location payroll, offer detailed reporting, and ensure compliance with local and federal regulations. These complete payroll solutions are especially useful for franchisors who want to centralize payroll while allowing franchisees to focus on business operations.

Chose the Right Solution for Your Current and Future Needs

While it’s not hard to switch your payroll provider, it’s also not a walk in the park, meaning you don’t want to do it every year as your business grows. Instead, forecast your budget, headcount, and overall expansion to ensure the payroll service you choose now will also be compatible with your needs down the road. 

Your best bet is to adopt a solution that grows with your needs and integrates payroll, HR, and compliance so checks and taxes are right, HR processes are fast and simple, and employees and candidates feel connected.

The post Understanding Payroll Service Solutions appeared first on PrimePay.

No matter your involvement with payroll at your business or organization, we have broken down some of the most common payroll definitions and terms to know. We have also included some of the most common payroll acronyms.

1. Accrue

Accrue means to build up or accumulate. As part of a compensation package, many employers offer paid vacation, sick, and personal time. There are many ways to provide this time, accruals being one of them. Many employers choose to allow the employee to earn (or accrue) a certain amount of time per pay period they work. Other employers may choose to give a bulk amount at one time.  

2. ACH (Automated Clearing House)

ACH is an electronic network for processing direct deposits and other payroll transactions. It is a safe way to transfer money between banks and credit unions and reduces the needs for paper and checks. Direct deposit for your payroll is an ACH.

3. Base pay rate

Base pay rate is the wage that has been agreed upon to be the starting point for employee earnings. This can be an hourly rate, a daily rate, a piece rate, or salary per pay. 

4. Deductions

Deductions are amounts taken from the employee’s paycheck that are not for taxes. These can be voluntary amounts that the employee chooses, such as health insurance premiums, retirement plan contributions, and miscellaneous deductions. Salary deductions can also be involuntary, such as a child support order or a tax garnishment. These items can be considered pre-tax or post-tax, depending on the actual deduction.

5. EFTPS

EFTPS stands for the Electronic Federal Tax Payment System. It’s used for an employer to pay federal taxes online.

6. Employee’s Withholding Allowance Certificate (W-4)

Federal Form W-4 or state equivalent is where the employee states the number of withholding allowances claimed to determine income taxes to withhold from the employee’s compensation. Every employee will need to fill out a W-4 upon starting a job.

7. Exempt

Amounts that are not considered part of the taxable compensation. These amounts would be subtracted from the gross pay (total compensation) before the calculations of each applicable tax are completed.

Example:  Employee contributions to a 401(k) plan are considered exempt from federal income tax. The contribution amount for that paycheck is subtracted out before the calculation of the Federal Income Tax (FIT) is done.

8. FICA

The acronym FICA stands for Federal Insurance Contributions Act. It is the formal name for the combination of Social Security and Medicare Taxes. Employers are responsible for remitting FICA and FIT together in a payment known as the federal tax liability. This is reported on the quarterly form 941. 

9. Garnishment

Garnishment is a legal proceeding authorizing an involuntary transfer of an employee’s wages to a creditor to satisfy a debt. Child support is a garnishment that is often placed when couples divorce and one does not pay as agreed in a divorce decree.

10. General Ledger

A general ledger is a tool used to record a business’s financial transactions. It includes amounts for assets, liabilities, revenue, and expenses.

11. Gross pay

Gross pay is the total pay received by the employee before taxes and deductions are removed. This includes the base pay plus any additional earnings like bonuses, vacation pay, and commissions.

12. I-9

The I-9 is a form used to verify if an employee is legally eligible to work in the United States.

13. Income Tax

Income tax is a tax that only employees pay. There are several taxes that fall into this category:  Federal Income tax, state income tax, and local income tax. Federal income tax is paid with FICA as part of federal tax liability. This is calculated by considering taxable compensation on a wage-bracket method but can also be taken as a flat dollar amount or percentage. 

State and local income tax withholding methods vary, as do whether or not that tax is taken in that state.

14. Net pay

Net pay is the employee’s take-home pay. This is the amount the employee receives after taxes and deductions are calculated and subtracted from gross wages.

15. Social Security (OASDI)

Social Security is both an employee withholding tax and an employer payroll tax. The employer is responsible for remitting a total of 12.4% of an employee’s taxable earnings to the IRS. They are permitted to take 6.2% from the employee as a withholding tax and “match” the other 6.2% as a payroll tax. There is a wage base limit, which means that the tax stops at a certain amount of wages for the year. This wage amount varies per year.

16. Take-home pay

Take-home pay is the employee’s wages that remain after all normal deductions and taxes are taken out. This is also known as net pay.

17. Taxable wage base

Taxable wage base is the maximum amount of employee compensation subject to Social Security, FUTA, and state unemployment insurance taxes.

18. Third-party sick pay

Third-party sick pay is compensation paid by a third party (often an insurance company or state insurance program) to an employee because of non-job-related illness, injury, or condition (maternity leave). The payment is considered fully taxable for the first six months, then becomes exempt from FICA and FUTA if the payments continue into the seventh month and beyond. These payments need to be shared with the employer and recorded on the employer’s tax returns, including employee W-2s.

19. Withholding

Subtract amounts from an employee’s wages for taxes, garnishments or levies, and other deductions (like medical insurance or union dues). These amounts are paid over to the government agency or other party to whom they are owed.

Once you familiarize yourself with these key payroll phrases, you will feel like an expert next time you run your payroll.

The post 19 Common Payroll Terms To Know appeared first on PrimePay.

And since we know that voluntary turnover costs a lot (one trillion dollars in 2019!), it’s imperative to create a welcoming and engaging new hire process. 

One way to do is is building or improving your preboarding strategy, which helps ensure new employees are ready to hit the ground running from day one.

What is Preboarding?

The preboarding stage begins when a candidate accepts a job offer and continues until their first day at work. This critical process includes activities designed to familiarize new hires with the company and handle any necessary paperwork, setting the tone for their entire employee journey.

Unlike onboarding, which integrates employees into daily operations and company culture, the preboarding stage is the initial touchpoint and early engagement that reinforces a new hire’s decision to join.

Christina Kroll, Customer Success and Onboarding Specialist, believes preboarding is a smart way to begin onboarding. She explains, “By sending information and materials in advance, you can set new hires up for success and ease their transition into the company.”

Together, the preboarding and onboarding processes create a seamless transition for new employees and lay a solid foundation for their future within the company.

Download our comprehensive Preboarding Checklist to ensure you’re completing all necessary (and nice-to-have) steps.

Benefits of Preboarding for New Hires

Preboarding has many benefits and establishes a positive first impression of your company.

A well-structured preboarding program can:

• Build a strong foundation for their employee journey
• Make new team members feel valued and prepared
• Help candidates feel secure in their decision to join the organization
• Mitigate any uncertainty they might feel before their first day

It can also help with HR metrics you likely track, such as turnover and engagement.

Reducing New Hire Turnover

Preboarding can significantly reduce the likelihood of new hire turnover by fostering emotional connections and maintaining consistent communication. When new hires receive a welcome email or introductory materials, it signals that the company cares about them, which can build loyalty and encourage them to stay. In fact, research shows when early quality programming is in place, there’s an 82% improvement in new hire retention.

Note that a strong company culture is also pivotal in new hire retention. Companies with a positive culture experience significantly lower turnover rates than those with a poor culture—13.9% versus 48.4%, respectively. By integrating preboarding practices that highlight and promote company culture, new hires are likelier to feel a sense of belonging and commitment from the start.

Enhancing Employee Engagement

Communication during preboarding goes beyond automated emails, although that’s important too. HR teams can help people feel prepared for their first day by answering questions and equipping them with the technology they need. This kind of information sharing has clear results: it’s been shown to increase productivity by over 70%.

Engaging new hires before their start date can also boost morale and create a sense of belonging. This early engagement helps new hires feel more connected to the company and their future colleagues, setting a positive tone for their upcoming employee journey.

7 Best Practices of an Effective Preboarding Process

A successful preboarding process involves several key actions that help new hires feel welcomed, informed, and prepared for their roles. Below are seven practices to incorporate into your preboarding process for a stronger and more successful program. 

1. Send Welcome and Introduction Emails 

Personalized welcome emails foster positive connections with new hires before their start date. These emails should include essential information such as a personalized welcome, an outline of the first week, and access to orientation modules. Clear instructions for completing checklist items should also be provided to ensure a smooth transition.

Introduction emails are equally important. They inform coworkers about the new hire’s arrival and help new hires build rapport with their colleagues. A second introduction email can be sent to introduce new hires to their team, facilitating smoother integration.

Tip: In your email to the team, include the new hire’s LinkedIn profile and encourage everyone to connect. This small gesture not only makes new employees feel welcome but also helps them put faces to names and feel more comfortable on the first day.

2. Grant Early Access to Company Resources

New hires appreciate early access to company resources. Consider including employee handbooks, benefits information, and the company calendar in your welcome email cadence. This strategy helps new employees familiarize themselves with the company culture and policies, ensuring a smoother transition once they start.

It’s also best practice to send technology to remote employees the week before their first day so they can sign in and set up their workspace before day one, if they choose.

3. Complete Administrative Tasks

Before technology, most employees’ first days consisted of filling out and signing paper after paper. Luckily, most administrative paperwork can now be completed digitally. 

Preboarding typically covers tax forms, health declarations, and insurance paperwork. Utilizing software – like those for benefits administration and self-service portals – can reduce administrative burdens on HR departments and enhance efficiency by automating routine tasks.

The result? The new hire can focus on on-the-job training on their first day. 

With a few clicks, HR teams can launch the benefits portal for new hires and monitor their completion. 

4. Implement a Buddy System

A buddy program involves pairing a seasoned employee with a new hire. Note that the seasoned employee isn’t the new hire’s supervisor and is ideally on a different team. That part is important, since new employees may feel more comfortable asking questions to someone other than their boss.

Besides creating a welcoming atmosphere for the new employee, buddy systems foster a smooth integration into the organization by: 

• Providing a person for immediate support and answering questions
• Assisting new hires with cultural adjustment
• Creating an environment of confidentiality and encouragement 
• Eliminating uncertainties about procedures

Tip: Before asking for volunteers to be buddies, make sure you have documented your buddy roles, responsibilities, and expectations so everyone is on the same page. 

5. Map Out Training

Before their first day, gather all the necessary resources needed by the new employee to get up to speed. It’s important to curate these materials in a way that is easy to follow, starting with basic company information and gradually moving into more complex tasks and responsibilities. Providing a clear structure will help the new hire navigate their learning journey without feeling overwhelmed.

In addition to compiling these resources, ensure the new hire knows how to access them. Whether the materials are hosted on an internal server, a learning management platform, or shared via a cloud-based system, providing clear instructions on where and how to find these resources is essential. 

Consider setting up an introductory meeting with the training team or the new hire’s manager to walk them through the available materials and answer any initial questions. This proactive approach helps the new hire feel more confident and sets the stage for a smoother onboarding experience, reducing the learning curve and helping them contribute to the team more quickly.

Assign specific courses and tasks for new hires to maintain compliance and prepare them for their role.

6. Schedule Informal Events

Informal social events help establish rapport and significantly improve new hires’ first-day experience. Hosting these events allows new hires to build relationships with their future colleagues, easing their transition into the company culture.

In addition to traditional meet-and-greets, consider incorporating a variety of informal meetings to make new hires feel welcomed and engaged. Virtual coffee breaks, team-building activities, and casual lunch outings can create a relaxed environment that encourages open communication and camaraderie. These informal settings provide an opportunity for new hires to ask questions, learn more about the company culture, and understand team dynamics in a more personal and less formal context.

Consider involving senior leadership in these events to further enhance the experience and demonstrate the company’s commitment to its new employees. When new hires see that leaders are approachable and invested in their success, it can significantly boost their confidence and motivation.

7. Ship a Welcome Package

A welcome package can enhance new hires’ early engagement during the preboarding phase. Branded items like T-shirts, hats, water bottles, pens, mugs, and drink cozies enhance new employees’ sense of belonging.

These branded swag items are excellent additions to a welcome package, making new hires feel valued and more connected to the company.

Tip: Allow employees to opt out of swag items. For example, a new teammate may not want a branded polo; knowing so will save you money and reduce waste.

Digitize Your Preboarding Process

To ensure a positive start for new hires, effective preboarding strategies that create a welcoming and supportive environment from the beginning are essential.

Luckily, HCM software helps streamline the preboarding and onboarding process with automated workflows. Using online solutions reduces errors and saves time. Specifically, a study by CareerBuilder found that automation in this stage of the employee lifecycle saved HR leaders roughly 14 hours of work.

By investing in software and optimizing their preboarding process, companies can reduce new hire turnover, enhance employee engagement, and improve overall retention, ultimately setting the stage for a successful and fulfilling employee journey. 

Run most of your preboarding and onboarding tasks within your HCM for a smoother process – for you and the new employee.

Frequently Asked Questions

What is preboarding?

Preboarding is the period that begins once a new hire accepts a job offer and lasts until their first day, involving activities to acclimate them to the company and complete essential paperwork. It’s crucial for ensuring a smooth transition into the workplace.

How does preboarding differ from onboarding?

Preboarding involves engaging and preparing new hires before their official start date, while onboarding is the process of integrating them into the company once they begin work. This distinction is crucial for fostering a smooth transition into the organization.

Why is preboarding important?

Preboarding is essential as it reduces new hire anxiety and enhances engagement, positively influencing retention and productivity. By creating a welcoming environment, organizations set the stage for a successful employment experience.

What should be included in a preboarding checklist?

A comprehensive preboarding checklist should include essential documentation, account setups, workstation preparation, onboarding programs, training materials, company handbooks, welcome emails, and scheduled meetings or events. This ensures a smooth transition for new hires and helps them feel welcomed and prepared.

How can technology improve the preboarding process?

Technology can significantly enhance preboarding by automating administrative tasks and improving engagement through digital document management and microlearning. This leads to a more efficient and interactive experience for new hires.

Grab Our Preboarding Checklist

A preboarding checklist is essential for efficiently welcoming new hires and outlining necessary steps. A comprehensive one should include everything from setting up email accounts to assigning training materials and scheduling meet-and-greets. The following checklist ensures a smooth and welcoming start for new hires, helping them feel prepared and valued before their first day.

The post Preboarding: Best Practices and Essential Tips for New Hires appeared first on PrimePay.

This issue may result from a poor or rushed agenda, but more often than not, it’s caused by a larger problem lurking. Long story short, many businesses have a blindspot: they focus on their external audience (i.e. customers, investors, media, analysts, and community members) but overlook proper internal employee communication. 

Unfortunately, poor communication with staff can quickly snowball and lead to significant consequences, such as lack of employee engagement, misunderstanding of company objectives, and poor morale.

While it’s clear that leaders should prioritize and improve their internal communication, it’s difficult to know where to start. Read our 11 employee communication best practices below to determine areas of opportunity so you can quickly take action.

1. Model Transparent Communication

Transparency in the workplace has been a buzzword for the last few years – and with good reason. Transparent employee communication builds trust, boosts business, increases employee morale, and reduces turnover. 

That said, you can’t just declare you’re a transparent organization and expect employees to follow suit. Instead, leaders must implement practices and continuously model that behavior to build trust and openness in the organization.

Action Item: Use Town Halls or team stand-ups to model transparency. While it’s always easy to discuss wins, it’s potentially even more important to address tough topics such as regrettable turnover and low eNPS scores. Prepare beforehand and practice addressing follow-up questions to deliver accurate and thoughtful answers. 

2. Establish Employee Communication Policies

It may seem basic (or a little micro-managey), but establishing communication policies helps people understand how to communicate effectively at work. When companies determine employee expectations and create rules around them, there are no gray areas.

I sent an urgent email; when can I expect a response? Check the policy. Where do we store and share strategy documents? Check the policy. Can I send a Slack message at 10pm? Check the policy. 

You get the picture. 

Action Item: Create an internal document with your company’s employee communication best practices. Consider noting which platform is best used when (Slack for immediate needs, email for project reviews) and answering expectations (such as two hours for Slack, 48 hours for email).

3. Provide Training Programs

If you’re looking to enhance effective employee communication, consider providing training programs for managers and employees.

HR Generalist Jenny Koucheravy hosts weekly manager training to practice skill-building in communication, decision-making, and conflict resolution. She explains, “By training your managers, you empower them to lead their teams efficiently to inspire productivity and foster growth. Continuous training ensures managers remain current with the latest best practices and educational resources, enabling them to lead confidently.”

Another reason to invest in learning and development? According to LinkedIn’s Workforce Learning Report, companies with a strong learning culture have a 57% higher retention rate than those without. 

Action Item: Provide yearly training programs via external specialists, internal leaders, and virtual courses. Consider which programs to make mandatory (such as performance review training) and which to make optional (to provide opportunities for upskilling).

Build courses, automate training processes, and provide personalized feedback within a learning management system. 

4. Ensure Consistent Messaging

You may have heard of the touchpoint rule in marketing: it takes at least seven interactions before someone usually makes a purchase. The same can be said for internal communication; you should roll out new policies, expectations, etc in various formats and places to inform and reinforce the announcement. 

However, when those communications come from different sources – and contain different messages – it becomes less of a staff communication strategy and more of a dangerous game of telephone. Varying stories lead to gossip and fear-mongering, which you can help avoid by ensuring consistent messaging. 

Action Item: For effective employee communication, develop a talk track for big announcements like raises/bonuses, acquisitions, and policy changes. That way, leaders and managers feel equipped to communicate and answer questions, and employees receive the same information no matter who is delivering the news.

5. Set Clear Objectives for Meetings

One thing bonds every single working person in the world: bad meetings. While that isn’t something to hang our hats on, it is a powerful realization that how we structure and conduct meetings can make or break employee sentiment and engagement.

Sr. Engineering Manager at ZF Group Amanda Mohan’s approach is to consider what she didn’t have – or what she can improve–from earlier career roles. She’s found that when it comes to “meetings or communication, setting clear and transparent expectations is key. Otherwise, you end up with a nondesired result, or your colleagues end up doing redundant or duplicate work.”

Action Item: Give context to your meetings by building out the meeting’s background, agenda, and goal in the meeting invitation. That way, attendees can prepare ahead of time so everyone has the opportunity to contribute and come away with clear action items.

6. Plan In-Person Events

As of 2023, nearly 13% of full-time US employees work remotely. While many benefits come from remote and hybrid work, there are also downsides, especially when companies don’t intentionally foster connections between employees. Alternatively, those who are intentional about the employee experience and driving engagement invest in company events and retreats. 

Paula Pryor, Chief HR Officer at Walker & Dunlop, explains: “If done well, [in-person events] are team building on steroids, re-energizing and re-engaging colleagues to carry forward together with gusto. As colleagues are spread across locations and time zones, creating meaningful opportunities for employees to gather with purpose is imperative. Whether to hug, break bread, or just laugh, we need more time to be human together.”

Action Item: Set aside budget for whole-company or team events. After the event, send a survey to help measure employee sentiment, collaboration, and motivation. Even though it’s hard to quantify the importance of social events, gathering feedback helps keep that line item in the budget for next year.

 7. Set Performance Management Expectations

Numerous studies have proven that regular check-ins between managers and reports improve employee engagement, the number of goals met, and retention rates. However, many companies allow managers to “choose their own adventure” regarding performance management. And that’s where things can go wrong.

According to Gallup, “at least 70% of the variance in team engagement is explained by the quality of the manager or team leader.” It’s therefore best practice to set performance expectations with managers to help combat disparate employee experiences and, in this case, employee communication within the company.

Action Item: To combat this disparity, create templates for 1:1 meetings across your organization. By doing so, you’ll help create a consistent experience across teams, collect similar data, and create a more equitable workplace. 

Performance management software equips managers and direct reports with templates for goal-setting, development plans, and 360 reviews to strengthen communication, performance, and retention efforts.

8. Gather Employee Feedback

Effective communication isn’t just about getting your point across to employees. It’s also about how they share feedback with you. When you actively seek input from employees, you demonstrate your commitment to inclusivity and transparency, thereby creating an environment where every individual feels valued and heard. 

Consider using feedback mechanisms such as 1:1s, employee surveys, Q&A roundtables, and suggestion boxes to empower employees to share their perspectives. This direct line of communication strengthens relationships between management and staff enables swift resolution of issues, boosts morale, and enhances overall productivity.

Action Item: Start small. Instead of sending out a survey about your entire employee lifecycle, consider sending five to ten questions about the onboarding process. People are more likely to fill out a shorter survey, and you’ll feel less overwhelmed with the amount of feedback you receive.

9. Foster Inclusive Language

Fostering inclusive language is a cornerstone for creating a supportive and inclusive workplace environment. It’s not only a best practice to make people feel like they belong, but using inclusive language also empowers employees to contribute their unique insights to discussions and projects. 

Inclusive communicator Marie Gettel-Gilmartin explains: “Words have power to heal or harm. Why wouldn’t you want to change the world for the better by using inclusive language? Data show workplaces thrive when everyone feels a sense of belonging and welcome. As leaders, you can use your power for good by leading the way in making your language inclusive.”

Action Item: Audit your job descriptions and postings. Avoid gendered language, refrain from assumptions about cultural norms, and be mindful of the impact of words on different groups. You want to signal that you value and respect all employees and candidates.

10. Build a Culture of Recognition

If you’re looking to boost effective employee communication, you must consider your culture. Is it one where people are publicly acknowledged for their achievements and milestones? When employees feel valued and appreciated for their contributions, they are more inclined to actively engage in dialogue, share ideas, and collaborate with their colleagues.

If this sounds like your organization, well done (but, of course, there’s always room for improvement!). 

If not, it’s time to start, as not showing gratitude can lead to turnover and disengagement. Specifically, 46% of people reported leaving a job because they felt underappreciated, and 65% admitted they’d work harder if leaders acknowledged their contributions.

Action Item: Create quarterly value awards for employees. This practice emphasizes your core values and allows managers to recognize reports that may not be regularly recognized.

11. Upgrade Your Onboarding Process

Your onboarding process is the foundation for a successful employee experience (no pressure). Effective employee communication at this stage is imperative: it ensures new hires feel welcomed, informed, and integrated into the company culture from the onset. 

Action Item: Incorporate two-way communication into your process, such as welcome sessions, mentorship programs, or feedback surveys, to empower new hires to ask questions, seek clarification, and build relationships with colleagues and supervisors.

Make new hire communication easy and efficient. With an employee self-service portal, HR teams can easily upload documents, and employees can sign up for benefits and direct deposit.

The post 11 Tips for Effective Employee Communication appeared first on PrimePay.

And while that’s a sum no organization wants to pay, the Association of Certified Fraud Examiners (ACFE) found that most perpetrators don’t limit themselves to one type of financial fraud, meaning that $50K can quickly turn into hundreds of thousands in loss. 

It’s therefore important to understand payroll fraud – and how to combat it – so you and your team can monitor signs of fraudulent activity and act quickly.

What is Payroll Fraud?

Payroll fraud is a deceptive practice in which employees manipulate the payroll system to receive compensation they’re not entitled to. This type of fraud can take various forms, such as falsifying work hours or issuing payments to fictitious employees. 

Internal payroll fraud is particularly concerning because it’s committed by individuals within the organization. These people take advantage of their familiarity with the company’s payroll processes and controls.

Of course, payroll fraud undermines a business’s financial health. It can lead to significant financial losses, erode employee morale, and damage the company’s reputation. 

Despite these severe implications, payroll fraud is surprisingly common. According to ACFE’s 2024 report, payroll fraud schemes account for 10% of all asset misappropriation incidents and can go undetected for an average of 18 months.

Types of Payroll Fraud

Payroll fraud takes various forms and exploits different aspects of the payroll process. Understanding the common types of payroll fraud—workers’ compensation fraud, misclassification, timesheet fraud, and ghost payroll—is crucial for identifying and preventing them in your organization. 

1. Workers’ Compensation Fraud

Workers’ compensation fraud occurs when an employee falsely claims an injury or illness to receive compensation benefits. This type of fraud can be particularly damaging, as it increases insurance premiums and disrupts workplace productivity. 

Common signs of workers’ compensation fraud include:

• Inconsistent injury reports
• A lack of witnesses to the incident
• Delayed reporting of the injury

For example, an employee might exaggerate the severity of an injury to extend their time off or claim an injury that occurred outside of work as a workplace incident. 

Mac Lillard, Sr. Manager of Risk and Advisory Services at GFR, encourages companies to review injury reports and conduct thorough investigations to mitigate fraud. He explains: “Regularly reviewing injury reports is essential for identifying patterns and inconsistencies that may indicate fraudulent claims. Consistent oversight ensures that all incidents are legitimate and helps prevent potential abuse of workers’ compensation systems.”

Employers can also implement a return-to-work program to facilitate the transition of injured employees to their roles, thereby reducing the potential for fraudulent claims.

2. Misclassification

Misclassification fraud involves incorrectly classifying employees as independent contractors to avoid paying certain benefits, taxes, and overtime wages. By doing so, organizations deprive employees of their rightful compensation and open themselves to legal risks and penalties.

It’s important to note that misclassification can be accidental or deliberate. Unfortunately, deliberate misclassification is a cost-cutting strategy some businesses use to reduce labor costs. However, it’s illegal and can result in significant fines. 

To prevent accidental misclassification and comply with the Fair Labor Standards Act (FLSA) guidelines, conduct regular audits. While scheduled audits are helpful, ACFE reports that 42% of organizations use surprise audits as an effective anti-fraud method.

3. Timesheet Fraud

Timesheet fraud occurs when employees falsify their working hours to receive unearned wages. This type of fraud involves employees clocking in for each other, exaggerating hours worked, or recording time for periods when they weren’t actually working.

While this issue may not seem like that big of a deal, timesheet fraud can significantly inflate payroll costs. 

Because time fraud is often difficult to detect without diligent monitoring, it’s best to use an automated timekeeping system. (In fact, we have a helpful time and attendance calculator to help people determine their software’s ROI when it comes to preventing timesheet fraud!).

Time and attendance software prevents payroll fraud for both parties because it:

• Ensures that people are being accurately paid for their time worked
• Helps users stay on top of absences, tardiness, and PTO accruals
• Grants an organization-wide view with real-time reports and schedules

When looking for time and attendance features, choose a system that integrates with your payroll software to ensure accurate payroll. 

4. Ghost Payroll

Ghost payroll schemes involve creating fake employees or retaining former employees on the payroll to divert their wages. Payroll administrators or employees with access to payroll systems often perpetrate this fraud.

For instance, a payroll manager might set up a fictitious employee and deposit the ghost employee’s salary into their account. Alternatively, they might keep a departed employee on the payroll and pocket their wages. 

Regular audits of payroll records, cross-referencing employee lists with actual employees, and implementing strict access controls can help prevent ghost payroll fraud.

How to Detect Payroll Fraud

Unfortunately, no company is safe from payroll fraud. However, staying vigilant and catching issues earlier helps lessen the financial impact and may prevent further payroll scandals. 

Here are several effective strategies to help you detect payroll fraud:

• Conducting regular audits and reconciliations: Internal and external audits can help identify discrepancies in payroll records (such as duplicate payments, unusual overtime claims, or mismatched employee details). Reconciliations involve comparing payroll records with bank statements, employee timesheets, and other relevant documents to ensure consistency.

• Monitoring overtime and absenteeism: Unusual patterns in overtime and absenteeism can indicate payroll fraud. For instance, an employee consistently reporting excessive overtime or frequently absent employees being marked as present could signal fraudulent behavior. Regularly reviewing and analyzing these patterns can help identify inconsistencies that warrant further investigation.
• Offering rewards for whistleblowers: While auditing and data analysis are more common approaches to detecting fraud, encouraging employees to share information is an effective strategy. Specifically, companies that offer rewards for whistleblowing see a 24% reduction in fraud and reduce the average fraud duration by three months. 

Tips to Prevent Payroll Fraud

While it’s important to know how to detect fraud, it’s even more critical ideal to have policies in place to prevent it.

Here are some practical tips to help you prevent payroll fraud:

• Review payroll reports regularly: Running regular audits gives you the foundational knowledge of the organization’s finances, which therefore helps people spot any errors or inconsistencies quickly. Key reports to review include your payroll register, the employee master file changes, and exception reports. 
• Implement segregation of duties: Segregation of duties helps prevent (and also detect!) fraud by dividing responsibilities among different employees. For example, the person responsible for processing payroll should be different from the person who approves it. This separation of tasks makes it more difficult for a single individual to commit and conceal fraudulent activities.
• Use payroll software with security features: Reliable payroll software should have numerous security features, including two-factor authentication, thorough audit trails, and direct deposit verification in place. 
• Educate and train employees: Educating employees about payroll fraud and its consequences helps create a culture of transparency and accountability. Provide regular training sessions on fraud awareness, detection, and reporting mechanisms.
• Establish a whistleblower policy: Create a confidential and anonymous whistleblower policy to encourage employees to report suspicious activities. In fact, more than half of fraud tips come from employees. Forming a reporting system, such as a hotline or online portal, allows employees to report concerns without fear of retaliation. 
• Conduct background checks: Perform thorough background checks on new hires, especially those with access to payroll systems. Verify employment history, criminal records, and references to ensure you are hiring trustworthy individuals. Regularly update background checks for current employees in sensitive positions.
• Foster a positive work environment: According to criminologist Steve Albrecht, one reason people commit fraud is that they’ve rationalized the action. While creating a positive work environment is a long-term strategy for preventing fraud, it improves morale, promotes equitable pay, and encourages company values – all results that deter actions against the organization.

Prevent Employee Payroll Fraud

Payroll fraud is something you think will happen to another company…until it happens to yours. 

Unfortunately, it affects organizations of every size and industry, which is why it’s important to understand it, know how to detect it, and employ strategies to prevent it. 

By following the above advice and leveraging the knowledge from your internal team and external sources, you’re well on your way to securing your company’s finances and managing an accurate and safe payroll.

The post Detecting Payroll Fraud and Tips to Prevent It appeared first on PrimePay.

Misclassifying employees is actually more prevalent than you think: 10-30% of employers misclassify at least one employee as an independent contractor, meaning millions of employees miss out on benefits, and employers have to pay hefty fines to mitigate the mistake. 

Of course, misclassification doesn’t make the IRS happy either; it loses roughly $8 billion annually in employment taxes due to this oversight. 

Because employee classification is important for all involved, we’ve developed the guide below to help you adhere to labor laws, avoid penalties, and provide the right legal protections and benefits for your people.

Understanding Employee Classification

Accurate job classification under the Fair Labor Standards Act (FLSA) ensures employees receive proper minimum wage and overtime protections.

Specifically, employee classification:

• Determines whether a worker is an employee or an independent contractor based on job duties.
• Impacts legal protections, taxes, and benefits like overtime pay. 
• Is essential for complying with labor laws and avoiding penalties. 

FLSA Guidance

FLSA regulations help employers differentiate between an employee and an independent contractor. 

If you’re stuck, the ‘economic reality test’ is a useful tool in this process, as it helps employers evaluate factors from the permanence of the role to the degree of control and the nature of the work. Through this test, businesses and workers can accurately gauge their positions within the legal framework and ensure compliance with the FLSA.

Employment Types

Each job – full-time, part-time, seasonal, temporary, contract, and statutory employees – presents unique traits and implications for job classification. 

Whether someone is working a seasonal job or is a full-time employee at a company, accurately classifying them as either an employee or an independent contractor is important and must be done carefully, especially when considering people with similar skills.

Independent Contractors vs. Employees

The critical distinction between roles isn’t just about titles; it’s about the working relationship and the economic realities that come with it. (Remember, full-time employees receive benefits that aren’t given to independent contractors, like social security and medicare taxes.)

• Independent contractors work on their own terms, choose their projects, and manage their schedules. They have the freedom to decide how to complete their tasks Independent contractors handle their own income tax and self-employment tax without the benefits that employees enjoy under FLSA. They provide their own tools and take charge of their creative or professional work.
• On the other hand, employees follow the employer’s guidelines, work within the company’s structure, and stick to set work hours. Employees receive necessary tax resources from their employers along with benefits and protections.

Exempt vs. Nonexempt Employees

Not to complicate things further, employees can also be exempt or nonexempt.

Exempt and nonexempt employees differ primarily in their eligibility for overtime pay, with exempt employees generally holding managerial or professional roles and nonexempt employees performing manual or technical tasks. Because of these differences, misclassification can lead to significant legal and financial consequences for employers.

Exempt Employees

Exempt employees are not entitled to overtime pay. To be classified as exempt, employees generally must meet three criteria:

1. Salary Basis: The employee must be paid on a salary basis, which means they receive a fixed salary regardless of the number of hours worked.
2. Salary Level: The employee must earn a salary that meets or exceeds a certain threshold, which is periodically updated by the Department of Labor. As of 2024, the minimum salary level is $684 per week (equivalent to $35,568 annually).
3. Duties Test: The employee must perform certain types of job duties. Common categories include:
   • Executive: Primary duty is managing the enterprise or a recognized department, and the employee must regularly direct the work of at least two other full-time employees.
   • Administrative: Primary duty is performing office or non-manual work related to management or general business operations, and the employee must exercise discretion and independent judgment on significant matters.
   • Professional: Primary duty requires advanced knowledge in a field of science or learning typically acquired through prolonged specialized education.

Nonexempt Employees

Nonexempt employees are entitled to overtime pay. They must receive at least one and a half times their regular rate of pay for any hours worked over 40 in a workweek. Nonexempt employees can be paid hourly or in salary, but their job duties do not qualify them for an exemption under the FLSA.

Exceptional Cases in Worker Classification

Particular attention is required for unique cases in job classification, like seasonal employees or those operating under distinctive state-specific regulations. Under the FLSA, certain seasonal workers may be exempt from the federal minimum wage and overtime regulations, provided the employer meets specific operational criteria. However, states like Massachusetts impose more stringent requirements, including shorter operational periods and mandatory certifications for seasonal exemptions.

V-class employees, a subset within the part-time category, face a unique set of rules. They are entitled to straight-time pay for hours worked beyond their appointment percentage, up to 40 hours, and premium pay for work over 40 hours a week. Such nuances highlight the importance of a tailored approach to worker classification and emphasize that employers must take both federal and local labor standards into account.

Role of Employers in Worker Classification

Employers are responsible for classifying workers accurately. To do so, they should:

• Maintain detailed records for payroll, wage computations, and timekeeping for at least three years, ensuring that any question of hours spent or wages due can be clarified.
• Regularly review job duties and salaries to ensure compliance with federal, state, and local labor laws. 
• Utilize tools like payroll and time-tracking software to streamline record-keeping and prevent misclassification issues.
• Consult experts to help with routine audits, determine classification strategies, and find solutions to unique scenarios. 

Interestingly, the FLSA does not stipulate definitions of full-time or part-time employment, granting employers the flexibility to make these designations. 

However, as of March 2024, the U.S. Department of Labor’s new rule emphasizes the multifactor test (including the degree of control exercised by the employer and the worker’s opportunity for profit or loss based on their managerial skill​) to provide more precise guidelines for employers. 

Implications of Misclassification

Misclassification, whether intentional or not, can have dire consequences.

Misclassification can lead to:

• Employees not receiving the benefits and protections they deserve under the FLSA, such as health insurance, retirement benefits, and workers’ compensation.
• Employees filing lawsuits to recover benefits and compensation rightfully due to them.
• Employers finding themselves swamped by back taxes, interest, and fines, sinking under penalties for misidentifying an employee as an independent contractor.

Luckily, the IRS’s Voluntary Classification Settlement Program (VCSP) offers a lifeline for employers to reclassify workers and resolve past misclassifications with less severe consequences.

Properly Classify to Safeguard Your Organization

As noted, it’s imperative to properly classify workers to provide them with the right benefits and ensure justice in the workplace. By following the FLSA and state laws and maintaining a vigilant watch over the classification process, employers can avoid legal issues and foster a fair and equitable environment for all workers. 

They must also remain proactive, regularly reviewing job roles and compensation to align with legal standards. By doing so, employers not only protect their business from potential penalties but also contribute to a more just and supportive workplace for all employees. Ultimately, the effort invested in proper classification pays off in the form of a more harmonious and legally compliant organization.

The post The HR Guide To Employee Classification appeared first on PrimePay.

Instead, it’s the distinct lines between generations. On the surface, generational diversity in the workplace is great – people of different ages (and, therefore, experiences) bring various perspectives, values, and opportunities to the table. 

Of course, those differences between the five (yes, five) generations also bring numerous challenges, especially when it comes to HR building a multigenerational employee experience and DEIB strategy that meets all needs. 

One of those needs to consider is the company’s benefits package and how it helps support your multigenerational workforce.

The Importance of Multigenerational Benefits

Generational diversity in the workplace isn’t just about management or communication styles. It’s also about meeting employees’ needs, including the different types of benefits that support their health and wellness outside of the 9 to 5.

Specifically, Kimberly Abel-Lanier, author of 8 Ways to Motivate the Five-Generation Workforce, states that “the multigenerational workforce requires flexible leadership, policies and programs. Today’s leaders must familiarize themselves with the perspectives, needs, and influences of each generation.”

Building out multigenerational benefits packages does more than acknowledge an employee age gap. When HR leaders hone in on definitive needs and use that data to create programs and policies, they help:

• Build an inclusive culture
• Foster trust in the workplace
• Boost morale
• Increase retention rates
• Attract and retain top talent

4 Steps to Choosing the Right Benefits

As with any benefits program, you must understand employee preferences and build your offerings accordingly. The extra – and intentional – work comes with slicing and dicing your data to ensure that all generations’ needs are met in your benefits packages. 

Below are four steps to ensure you select the right benefits for your organization.

1. Understand the Top Benefit Needs of Each Generation

After studying the characteristics of the five working generations, Larry and Meagan Johnson, workplace training experts and authors of Generations, Inc.: From Boomers to Linksters–Managing the Friction Between Generations at Work, identified the societal influences that impacted each generation, emphasizing how characteristics and societal influences impact each age group differently. 

The Silent Generation (Traditionalists) —Born 1925-1945

Influenced by the Great Depression, Traditionalists are motivated by money but also want to be respected. This group typically prefers milestone recognitions, values flexible schedules and promotions, and considers long-term care insurance and catch-up retirement funding as essential benefits.

Baby Boomers — Born 1946-1964

Also referred to as the “Woodstock Generation” and influenced by the Vietnam War, Boomers tend to question authority, be well-educated, possess excellent teamwork skills, and thrive on adrenaline-charged assignments. Perks like prestigious job titles and recognition, such as the size of one’s office space and parking spaces, are also crucial to Boomers. 

Around 10,000 Boomers turn 65 daily, making benefits such as 401(k) matching funds, sabbaticals, and catch-up retirement funding of significant importance to this group. The increasing presence of older workers underscores the value they bring and the necessity for policies supporting their continued employment. As the Baby Boomers transition into retirement, it’s essential to recognize the contributions of older generations and ensure that their legacy of skills and knowledge is passed on effectively.

Generation X — Born 1965-1976

Dubbed the “Me Generation” or “The Latchkey Generation” because many are the children of full-time working or divorced parents, Gen Xers are independent, family-focused, hardworking, and socially responsible. They value benefits such as flexible telecommuting schedules and believe promotions should be based on competence, not rank, age, or seniority.

Generation Y (Millennials) — Born 1977-1997

Generation Y, commonly referred to as Millennials, and the younger generations that follow, are heavily influenced by technology, making them a tech-savvy demographic that prefers using digital devices, the Internet, and social media for communication. This influence shapes their approach to work, emphasizing the need for flexible workplaces, time off, and continuous learning opportunities. Culture is critical to them, as is working with organizations that align with their values and beliefs. Younger workers bring unique perspectives and innovative ideas, underscoring the importance of integrating their skills and fresh insights into the workforce to foster a dynamic and collaborative environment.

Generation Z (Centennials) — Born after 1997

The Facebook generation, or “Linksters” as coined by the Johnsons, is influenced by a media-saturated world. Linksters tend to be motivated by meaningful work. According to Abel-Lanier, “They want exciting projects they can be passionate about.” This group is more motivated by social rewards, mentorship, and constant feedback than money. Members of this generation also expect workplace flexibility and diversity.

2. Collect Employee Feedback

Armed with a general idea of what benefits your multigenerational workforce may prefer, the next step is to collect specific employee feedback. Consider using:

• Open-ended questions. Ask about the type of benefits they want, where they see room for improvement in the current options, and if there is any confusion or issues with accessing benefits. 
• Focus groups. Include employees of varying generations within these groups to ensure your offerings acknowledge how peoples’ needs change with different life stages.

• Ranking questions. Require employees to prioritize which benefits are most important. If you just ask employees to check off which benefits they’re interested in, it gives the benefits equal weight, which may not be the case. 

Interestingly enough, you may find that, while each generation tends to prioritize different items, they also share common concerns,. One such concern is support needs; specifically, 23% of the U.S. population is or will be caring for both the young and the elderly. The distinction is the needs behind those concerns. 

As a leading generational expert states, “The longer I study generations in the workplace, the more similarities I find in what people want out of work. Those fundamentals—meaning, purpose, good leaders, professional growth—don’t change. What changes is how each generation expresses these needs and what expectations we have about our employers’ fulfillment of them.”

3. Build a Benefits Menu

Because you’re most likely juggling different benefit interests and requests from your multigenerational workforce, it’s best practice to offer a wide range of benefits – beyond basic healthcare and retirement. 

Jenna Bunnell of Dialpad urges companies to offer various work benefits that employees can choose from. She explains, “These can cover health and wellbeing, career development, financial incentives, social offerings, volunteering opportunities, and more. Offering a pick-and-mix style package affords your team flexibility and will make them feel valued and supported, no matter their generation.”

Offering various benefits is also a way to flex those creative muscles. For example:

• Impala offers their employees a package that includes five categories of benefits (such as gym memberships, insurance, and learning and development), as well as a monthly allowance. 
• Over at Spotify, new parents get six months of paid leave, which can be used over the first three years of the child’s life. 
• Gymshark has a “Perk of the Week” and also offers employees financial education, including workshops and 1:1s. 

Benefits administration doesn’t have to be frustrating and complex. With the right software, employees can self-select the benefits they want and build their own plan.

4. Evaluate and Adapt

Organizations can evaluate and adapt their benefit offerings to improve in the following year through a comprehensive and strategic approach. Although your benefit program should align with the organization’s long-term goals and budget, remember – benefits should be people-first decisions. 

When it’s time to evaluate your program, make sure you:

• Analyze utilization data. Review the utilization rates of the current benefits offered. As a reminder, low utilization of certain benefits might indicate that they are not valued or not well communicated. High utilization, on the other hand, shows what employees value the most. 
• Send reminders throughout the year. You may notice certain benefit usage drop-offs throughout the year. Send helpful messages reminding employees of the services and benefits at their disposal and note any shift in utilization for accurate data collection.
• Benchmark against industry standards. Compare your benefits package with those of similar organizations in your industry. This will help you identify where you may be lagging and areas where you could differentiate your offerings to attract and retain talent. 

With the right HR reporting tools, you can make informed, data-driven decisions about your employee lifecycle and the benefits you offer. 

Create an Inclusive Experience for Your Multigenerational Workforce

Because the needs of your multigenerational workplace can evolve, staying responsive to your data and any changes is crucial. By following the above steps, you can not only improve your company’s benefits offerings in the coming year but also ensure that these offerings continue to align with employees’ needs and expectations. The result? Building a workplace culture that’s inclusive, responsive, and a model for others.

The post Meeting Everyone’s Needs: How to Determine Benefits for Your Multigenerational Workforce appeared first on PrimePay.

In fact, 80% of people value benefits over salary – a considerable shift from priorities a decade ago. While health insurance, flexible work, and PTO usually take precedence in employer plans, more and more leaders are focusing on employee retirement accounts. 

While the benefits of individuals having retirement plans are evident, it’s also a strategic asset for companies to offer them.

A Brief Overview of Retirement Accounts

Retirement plans, such as defined contribution plans and savings incentive match plans, offer:

• Easy ways to save for retirement
• Automatic contributions
• Potential employer-matching contributions
• Pre-tax contributions
• Tax-free investment growth

Retirement plans come in various forms, each with unique features and benefits. For example, a 401(k) plan, a type of defined contribution plan, allows employees to save a portion of their paycheck before taxes are taken out. These plans often include employer-matching contributions, which can significantly enhance an employee’s savings. 

Similarly, a savings incentive match plan for employees (SIMPLE) IRA is designed for small businesses and offers a more straightforward and less costly alternative to a traditional 401(k) plan.

Other types of retirement plans include defined benefit plans, also known as pension plans, which promise a specified monthly benefit at retirement. 

Some plans may combine features of both defined benefit and defined contribution plans. These hybrid plans, such as cash balance plans, are becoming more popular as they provide both the employer and the employee with greater flexibility and predictability.

Lastly, individual retirement accounts (IRAs) allow individuals to save for retirement outside of employer-sponsored plans. Traditional IRAs and Roth IRAs are common types of IRAs, which differ primarily in their tax treatment.

Communication about your retirement plan is key since each type has its own set of rules regarding contributions, tax advantages, and withdrawals. Both employers and employees must understand the differences and select the right plan that aligns with their retirement goals and financial situation.

Benefits of Offering Company Retirement Plans

Offering retirement plans is not just a perk — it’s a strategic move. Below are four results you’ll likely see after implementing robust retirement plans for your employees.

1. Attract Top Talent

In a competitive job market, differentiating factors can tip the scales in favor of businesses. One such factor is well-structured retirement plans. In fact, 81% of people state that retirement benefits are a “must-have” when considering a job offer. 

Alex Johnson, HR Director at InnoTech Solutions, explains: “A robust retirement plan can be the deciding factor for many candidates when they’re choosing between job offers. It’s not just about the paycheck; it’s about the future.” 

By offering these benefits, employers signal that they’re invested in their employees’ long-term success and financial stability, which can be a powerful motivator for job seekers looking for a workplace that supports their life goals and has a culture of care.

Tip: Make sure your job descriptions indicate the base salary and total compensation. Without the latter, many candidates may forget to factor in the overall benefits that a company can offer beyond immediate salary, such as matching 401K contributions, paid business retreats, and additional time off during the holidays. 

Equip your people with an employee self-service portal so they can track their total compensation, as well as PTO and other personal information.

2. Boost Job Satisfaction

If you think benefits packages are just a way to maintain compliance, it’s time to think bigger. You must intentionally design your benefits programs to create a stronger employee experience and foster a positive organizational culture.

Specifically, when you include financial benefits and retirement planning in your offerings, you help bolster employees’ sense of security about their future. Moreover, you’ll impact overall morale and workplace happiness; the National Institute on Retirement Security, 85% of people report that retirement benefits provide job satisfaction. 

Emily Roberts, CFO at Dynamic Growth Enterprises, explains the profound impact that retirement planning can have on an organization’s culture and employees’ sense of value and commitment. She shares, “When our employees know that we care about their future, they care more about their present work.”

3. Increase Loyalty

Offering a well-structured retirement plan is an effective strategy for cultivating a culture of loyalty within your organization: a staggering 94% of employees say that a strong retirement plan is critical to their loyalty to the company, according to a report by the Employee Benefit Research Institute. 

When employees see that their employer invests in their long-term financial security, they’re more likely to develop a strong sense of allegiance to the company. 

This loyalty can manifest in various ways, such as:

• A higher retention rate
• A willingness to go above and beyond in their roles
• An overall positive attitude towards the company. 

And if you’re really looking to increase employee loyalty, consider embedding financial planning programs into your professional development cadence. Recent studies show that 53% of employees report that financial planning programs are essential for increasing loyalty. 

Unfortunately, only 28% of people (Extensis Group survey) confirm that their employer offers education regarding retirement plan investments—a huge area for improvement (or, if you’re an opportunist, a way to stand out) to help increase loyalty and attract top talent. 

4. Build a Better Brand Image

Because offering retirement plans demonstrates a commitment to the long-term well-being of employees, organizations may witness an added benefit: employees becoming powerful advocates for their company. 

Jane Smith, a project manager at Global Tech Solutions, explains, “Comprehensive benefits like retirement plans are more than perks—they’re a statement that the company cares about us long-term.” The result of such sentiment? Employees share their positive experiences and contribute to the organization’s reputation as an employer of choice. 

Moreover, by showcasing a dedication to sustainable employee benefits, businesses can also project an image of stability and reliability to customers and partners, potentially leading to more business opportunities. For example, a strong brand image rooted in social responsibility can attract investors looking for companies with ethical business practices and a forward-thinking mindset.

Help Employees Feel Financially Secure

It’s clear that retirement planning is crucial for the financial security and welfare of employees and employers alike. Even if you already offer a competitive benefits package, there’s always room to grow.

Consider educating your workforce about the benefits and operation of these plans, including tax advantages and employer-matching contributions. Simplification and automatic enrollment can enhance participation, while open dialogue about retirement planning ensures employees fully leverage these crucial benefits.

Ultimately, by prioritizing retirement planning and offering comprehensive plans, businesses can establish a supportive and forward-thinking culture that benefits both the employees and the company’s long-term success.

The post 4 Reasons Why Company Retirement Plans Pay Off for Businesses appeared first on PrimePay.

In this article we will help you find strategic ways to lower payroll costs without sacrificing headcount. 

Strategies to Reduce Payroll Costs

1. Hire the Right People

While you can’t build a time machine to undo hiring mistakes, you can focus on maintaining accurate headcount plans and hiring the right people for the future. Hiring the right people can improve productivity and reduce turnover which will help to reduce payroll spend.

To improve your hiring process and promote efficient team structures, equip your recruitment team with an ATS that integrates with your tech stack and encourages strategic conversations between hiring and department managers.

An ATS that connects with your HR and payroll program simplifies hiring processes and enhances data accuracy for all involved. 

2. Review Employee Classification

Are you part of the 10-20% of employers who misclassify employees? Hopefully not, as inaccurate classification can lead to back taxes and penalties, additional overtime pay, legal fees and court costs, federal and state fines, and exclusion from government contracts. 

Therefore, it’s vital to ensure your employees are correctly classified as employees and independent contractors, as well as salaried and hourly employees. 

3. Optimize Employee Scheduling to Avoid Overstaffing or Understaffing

Fiscally responsible leaders take note of schedules, business needs, and historical patterns and use them to gain a payroll cost savings. Creating a well optimized employee schedule can reduce overtime costs and reduce employee turnover. 

Examples include:

• A restaurant near Lake Michigan hiring seasonal employees for summer seasons to avoid overstaffing during slower months. 
• A technology call center increasing the number of agents scheduled in the days following a product release. 
• A brewery scheduling fewer employees on game days after the local team lost in the playoffs. 
• An automotive assembly plant aligning employee shifts with the production demands of the new year. 

However, there’s a fine line between optimizing employee scheduling and consistently understaffing your organization. In short, not having enough employees results in many consequences, such as employee burnout, high turnover, and less-than-stellar customer service. 

As Josh Bersin, president and founder of Bersin & Associates, explains that understaffing “is bad for everybody. For the customers. It’s bad for the employees. It’s bad for the company.”

4. Automate Payroll Processing with Payroll Software 

Outsourcing your payroll automates payroll and taxes. This results in no more manual data-entry errors, printing checks, and wasting time finding employee information. There are many other advantages to payroll outsourcing that should be considered too.

Instead, with an automated payroll solution, you’ll sleep well knowing your information is accurate, secure, and centralized, with the additional benefit of saving thousands of dollars on in-house payroll. 

Modern payroll solutions helps cut payroll costs with functionalities such as direct deposit, time tracking, tax payments, and robust analytics.

5. Review Benefit Plans

Another way to control payroll costs is to regularly evaluate benefit plans to ensure they’re cost-effective, match your budget, and align with employee needs. Consider negotiating better rates with insurance providers or exploring alternative benefits to get the best bang for your buck.

Jamie Press, SVP of HR at PrimePay, recommends gathering employee feedback in the spring and early summer to help determine the benefits to prioritize. She explains: “Employee feedback is crucial when we begin building our benefits package for the following year. We use their input as we gather bids from different companies to determine what’s best for our employees, company, and budget.”

6. Conduct Regular Expense Reviews

Many leaders have a ton of data at their fingertips. But here’s the thing – 86% of people say the volume of data actually makes decision-making more difficult. 

That’s why it’s important to view your data with a goal in mind. Schedule meetings specifically for analyzing payroll-related costs or finding places to reduce unnecessary spending so you can make efficient decisions and stay focused on the task at hand.

Regularly reviewing your data helps you spot trends and opportunities and provides context and clarity when reducing labor costs.

It’s crucial to keep fiscal responsibility top of mind, and even more so in times of volatility. By employing the six strategies above, you’ll be better able to reduce labor costs without decreasing your headcount. 

By controlling payroll costs, you can improve your company’s overall financial health, increase profitability, and potentially invest in other business areas.

Benefits of Optimizing Payroll Costs

There are four main benefits to optimizing payroll costs including cost reduction, profitability improvement, market competitiveness, and adaptation to economic challenges. 

We dive into each of the benefits below:

• Cost Reduction: Labor costs often represent a significant portion of a company’s overall expenses (labor expenses can range from 15%-70%, depending on the industry). 
• Profitability Improvement: Payroll cost savings can directly contribute to improved profit margins. When a company can operate more efficiently and allocate resources effectively, it’s better positioned to generate higher profits. This, in turn, can make the company more competitive in the market and attract potential investors.
• Market Competitiveness: Optimizing payroll costs allows companies to offer products or services at competitive prices without compromising quality. Doing so can be crucial in gaining market share and retaining customers in a price-sensitive market.
• Adaptation to Economic Challenges: Economic downturns or unforeseen challenges can lead to a decrease in revenue for many businesses. In these situations, companies should seek to decrease labor costs to realign their cost structure with reduced income. This adaptive measure can help companies make lemonade out of lemons by avoiding a reduction in force and remaining financially stable.

It’s important to note that reducing payroll costs doesn’t necessarily mean reducing your workforce. In fact, that option shouldn’t be your first (or fifth) step to save money. Instead, it’s best to explore ways to achieve fiscal resilience without compromising workplace culture or hindering long-term growth prospects. 

While reducing payroll expenses can offer short-term financial benefits, you should carefully consider the potential impact on employee morale, productivity, and the long-term sustainability of their operations. Communication with employees, ethical considerations, and a balanced approach to cost-cutting are crucial for maintaining a positive culture.

The post Reduce Payroll Costs With 6 Easy Strategies appeared first on PrimePay.

1. PrimePay: Best for Growing Companies

PrimePay’s cloud-based payroll software is a robust and intuitive solution crafted to facilitate seamless payroll management for businesses of all sizes. The software features automated payroll processing, compliance management, and scalability to accommodate the evolving needs of expanding companies. PrimePay empowers organizations on their growth journey.

Key Features:

• Versatile Platform: PrimePay is designed as a ‘plug and play’ platform. Defined by options, it allows businesses to start with basic payroll or HR functions and add features as their needs evolve.
• Simplified Processes: The platform aims to streamline the payroll process, ensuring that checks are accurate, taxes are taken care of, and benefits are clearly outlined.
• Comprehensive Services: PrimePay handles a wide range of services, including payroll, HR, ATS, time tracking, and benefits management.
• Payroll Tax Filing: File federal, state, and local taxes automatically across 50 states. 

Pros:

• Comprehensive Solution: PrimePay offers a range of features covering various payroll needs, appreciated by businesses of different sizes.
• Versatile and Scalable: Tailored solutions and bundles that grow with the needs of your business.
• HR-Add On: Ability to add and integrate HR software to your existing payroll provider.
• User-Friendly Interface: The platform is praised for its ease of use, making payroll and HR tasks more enjoyable.

Cons:

• Expensive: PrimePay’s monthly minimum makes the platform costly for smaller clients.
• Issues with Customer Service: Some users have noted inconsistencies in customer support, particularly with a need for dedicated representatives.

Pricing:

• Payroll Essentials: Starting at $99.00
• HR Essentials: Starting at $5.00
• HR Advantage: Starting at $8.00
• HCM Essentials: Starting at $10.00

Client Review:

“PrimePay is a relatively easy-to-use program that makes payroll and tax season easier. Payroll is a breeze with Primepay, and setting up new employees is quick and easy. Employees can easily access all their payroll information. Primepay makes tax season easier by sending out 1099s and creating tax packages containing all the necessary information. PrimePay support is very helpful.”

2. Gusto: Best for Remote-First Companies

Gusto is a comprehensive and user-friendly platform designed to streamline and simplify the payroll process for businesses. With features like automated tax filings, employee self-service, and compliance management, Gusto offers an efficient solution for efficiently managing payroll tasks.

Key Features:

• Gusto Global: Puts all employee information in one place but adapts to their local currency and compliance requirements.
• Time Tracking Integration: Bundling time tracking with full-service payroll, it’s a comprehensive solution for businesses.
• Multiple Direct Deposit Options: Offers flexibility in payment methods, catering to diverse employee preferences.

Pros:

• User-Friendly Interface: Gusto’s intuitive design makes navigation and payroll management straightforward.
• Comprehensive Payroll Services: Includes full-service payroll, 1099s, and W-2s, ensuring all payroll needs are covered.
• Basic HR Tools: Ideal for businesses looking for simple yet effective HR solutions, including hiring and onboarding.

Cons:

• Limited Multi-State Payroll in Base Plan: The Simple plan restricts payroll to a single state, which may not suit businesses operating across multiple states.
• Complexities for Larger Businesses: Gusto might not be the best fit for companies with more than 1000 employees.
• Pricing Structure: Some users find Gusto’s pricing high, especially for small businesses with limited needs.

Pricing:

• Contractor Only Plan: At $35/month plus $6 per contractor, it’s a good start for businesses relying mainly on contractors.
• Simple Plan: $40/month plus $6 per employee, best for single-state operations.
• Plus Plan: $80/month plus $12 per employee, offering more advanced features.
• Premium Plan: Custom pricing, providing the most comprehensive suite of services.

Client Review:

“I’ve been using Gusto for 4 years and it’s consistently impressed me with its ease of use and efficient customer support. Running payroll is a breeze, and the service saves me considerable time. The issues I’ve encountered, minor and mostly self-inflicted, were resolved promptly. Gusto’s user-centric design and functionality make it an essential tool for my business operations. I highly recommend it to other small to midsize business owners.” 

3. OnPay: Best for Companies Seeking Industry-Specific Solutions

OnPay offers is a user-friendly and cloud-based platform that simplifies payroll processing for small and medium-sized businesses. Offering features like automated tax calculations, direct deposit, and employee self-service, OnPay provides a convenient and efficient solution for companies seeking a payroll processor for their specific industry.

Key Features:

• Full-Service Payroll Plan: OnPay offers a comprehensive, full-service payroll plan. This includes direct deposit, tax filings, W-2s, 1099s, setup, data migration, software integrations, and HR tools.
• Specialized Services: OnPay provides services tailored to various industries such as restaurants, farms, nonprofits, and larger companies.
• Custom Reporting: The software offers robust custom payroll reporting features, catering to diverse business needs.

Pros:

• Comprehensive Service: Offers a full-service package without the need for add-ons or upgrades.
• Ease of Use: Praised for its user-friendly interface and logical workflow.
• Excellent Customer Support: Known for timely and helpful customer service, ensuring a smooth user experience.

Cons:

• Limited Integration Options: May not suit businesses seeking extensive integration capabilities.
• Pricing: Positioned at the higher end of the market, which might concern very small businesses.
• Onboarding Process: Some users need more detailed guidance to navigate the onboarding process.

Pricing:

OnPay is priced at $40 per month plus $6 per employee per month. This transparent pricing model is appreciated for its simplicity and inclusivity of essential services.

Client Review:

“OnPay has transformed our payroll process. It’s user-friendly, efficient, and their customer service is top-notch. As a small business owner, it’s a relief to know that payroll is one less thing to worry about. Highly recommended for any SMB looking for a reliable payroll solution.”

4. Intuit QuickBooks: Best for Companies That Use QuickBooks Accounting

Intuit QuickBooks Payroll offers various features for small to medium-sized businesses. This versatile software combines the power of QuickBooks’ renowned accounting prowess with efficient payroll processing.

Key Features:

• Next-Day Direct Deposit: Ensuring timely payment processing.
• Automatic Tax Filing: Handles both state and federal taxes, reducing administrative burdens.
• Integration with QuickBooks Products: Seamlessly works with other Intuit services, which is ideal for existing Intuit users.
• Higher-Tier Bookkeeping Tools: In the premium plans, features like expense tracking, invoicing, time tracking, and inventory tracking are available.

Pros:

• Integrated Solution: Streamlines accounting and payroll in one platform.
• Comprehensive Tax Handling: Automates most tax-related tasks.
• Scalable Plans: Options available from basic to advanced needs.

Cons:

• Cost Factor: The basic plan is relatively expensive for small businesses.
• Limited Integrations: Integration mainly within Intuit products; may not suit businesses using diverse software ecosystems.
• Local Tax Automation: Does not fully automate local taxes, which can be a drawback for some businesses.

Pricing:

• Payroll Core: $45/month + $5/employee. Covers basic payroll and some HR tools.
• Payroll Core + Simple Start: $70/month + $5/employee. Adds bookkeeping features like expense tracking.
• Payroll Core + Plus: $130/month + $5/employee. Includes advanced features like time and inventory tracking.

Client Review:

“I’ve been using QuickBooks Payroll for our small business, and it’s been a lifesaver. The integration with QuickBooks accounting makes our financial management much smoother. While it’s a bit pricey, the time saved on tax filings and payroll processing makes it worth it. However, I wish it had more integrations outside the Intuit ecosystem.” 

5. Patriot: Best for Smaller Businesses with Tight Budgets

Patriot is a cost-effective solution tailored for businesses with tighter budgets, providing essential payroll features without compromising quality. With its user-friendly interface, affordable pricing, and core functionalities like tax filing and direct deposit, Patriot Payroll caters to small businesses seeking efficient payroll management within financial constraints.

Key Features:

• Focuses on small to medium-sized businesses: Tailored for small to medium-sized companies in the United States, supporting 1 to 500 users.
• Two plan options: Basic and Full-Service are the two main plan options, with the latter including tax filing services.
• Essential features: Direct deposit, time-off accruals, the ability to pay contractors, unlimited payrolls, and W-2s.
• Quick payroll processing time: Customers average less than three minutes to run payroll.

Pros:

• Affordability: Both Basic and Full-Service plans are competitively priced, making it an excellent choice for businesses with tighter budgets.
• Customer Support: Patriot provides excellent customer service with responsive and knowledgeable support staff.
• Flexibility: The platform is adaptable, with various integrations and customization options.
• Efficient Payroll Processing: The system is designed for speed and simplicity in payroll management.

Cons:

• Limited Features for Larger Businesses: May not be suitable for larger companies due to its focus on small to medium-sized business needs.
• Geographical Limitation: Mainly for businesses based in the United States; not ideal for international operations.
• Additional Costs for Integrations: While integrations are available, they might increase the overall cost.
• Limited Reporting Features: Some users desire more comprehensive reporting capabilities.
• Limited Customization in Certain Areas: Some users find restrictions in customizing payroll processes like salary adjustments.

Pricing:

• Basic Payroll: $17/month + $4 per employee/contractor.
• Full Service Payroll: $37/month + $4 per employee/contractor.
• The main difference is the inclusion of tax filing services in the Full Service plan.

Client Review:

“I’ve been using Patriot Payroll for over a year now, and it’s been a game-changer for my small business. The affordability was a major draw, but the ease of use and exceptional customer support have made me a loyal customer. Running payroll is now a breeze, and I’ve saved so much time. The fact that I can easily integrate it with other tools I use is just the icing on the cake. Highly recommend Patriot for any small business owner!”

6. Rippling: Best for Companies Planning International Expansion

Rippling is an ideal solution for companies planning international expansion, offering a comprehensive platform that seamlessly integrates payroll management across borders. With its global capabilities, automated compliance features, and centralized control, Rippling provides businesses with a robust tool to navigate the complexities of payroll when expanding operations internationally.

Key Features:

• Global Reach: Rippling shines in its ability to manage international employees. Its tools facilitate onboarding, local currency payroll, and local law compliance.
• Comprehensive Integration: Rippling is more than a payroll service; it integrates HR, IT, and Finance, offering a holistic approach to workforce management.
• Efficient Onboarding: Capable of setting up various aspects such as payroll, corporate cards, and third-party apps quickly and efficiently.

Pros:

• Time Efficiency: The platform streamlines various processes, saving significant time for users.
• Versatile Integrations: Supports a wide range of third-party applications, ensuring flexibility and broad applicability.
• Scalability: Suitable for businesses experiencing growth, accommodating expanding HR and payroll needs without added complexity.

Cons:

• Technical Issues: Some users have reported encountering technical glitches or bugs.
• Complexity in Adjusting Employee Information: Adjustments can sometimes be more complex, requiring time to navigate and understand the process.
• Pricing Opacity: Rippling’s pricing structure isn’t transparent, necessitating discussions with representatives for detailed quotes.
• Limited Use for Very Small Businesses: Not ideal for businesses seeking only basic payroll processing.

Pricing:

Starts at $8 per month per user, but a detailed quote is necessary for specific business requirements.

Client Review:

“I find Rippling to be a game-changer in simplifying my work life. What I like best about Rippling is the convenience of having everything in one place. From payroll and health insurance to managing my 401k and HSA, Rippling streamlines the entire process. The centralized platform not only saves time but also ensures that I have a comprehensive view of all aspects of my benefits and financials. It’s user-friendly and efficient, providing a seamless experience that has significantly enhanced my day-to-day work management.”

9. Papaya Global: Best for Companies Managing a Global Workforce

Papaya Global is an optimal choice for companies with a global workforce, offering a comprehensive platform designed to streamline and simplify international payroll management. With features tailored for cross-border compliance, multi-country payroll processing, and global workforce visibility, Papaya empowers businesses to navigate the complexities of managing payroll on a worldwide scale efficiently.

Key Features:

• Global Payroll Services: Papaya Global offers payroll solutions across 160 countries, ideal for managing a global workforce.
• End-to-End Employer of Record (EOR): The software assists in onboarding, managing, and paying international staff, as well as handling work and residence permits for employees working overseas.
• Contract Worker Management: Efficiently manages contract workers, ensuring compliance and smooth operations.
• Multi-Language and Multi-Currency Support: Pay stubs can be generated in local languages, and the system can process multicurrency and cross-border payments.

Pros:

• International Business Suitability: Ideal for businesses managing international staff, offering robust support in various countries.
• Comprehensive HR Solutions: Offers a wide range of services from payroll to workforce management, simplifying HR complexities.
• Local Compliance and Support: Ensures compliance with local regulations and provides expert support for diverse workforce management.

Cons:

• Pricing: Generally more expensive than competitors, with costs increasing based on services and employee numbers.
• Complex for smaller businesses: Robust features and a focus on global workforce management may be more extensive than required for more straightforward payroll scenarios. 

Pricing:

• Grow Global: $25.00 per employee per month
• Scale Global: $20.00 per employee per month
• Enterprise Global: $15.00 per employee per month
• Enterprise Grade EOR: $650.00 per employee per month

Client Review:

“Papaya Global is a very helpful solution in order to manage payroll for several locations: having everything on the same platform, a single point of contact, and the same format for every report, is very valuable. The platform is also user friendly, and the Payroll experts are available for any question.”

7. Paychex: Best for Companies Seeking Support via Telephone

Paychex software offers robust solutions that strongly emphasize providing exceptional customer service, ensuring businesses receive dedicated support for their payroll needs.

Key Features:

• Comprehensive Payroll Processing: Provides end-to-end payroll processing, covering tasks such as wage calculations, tax deductions, and direct deposits.
• Tax Compliance Management: Automates tax filing processes, helping businesses stay compliant with federal, state, and local tax regulations, and it stays up-to-date with changes in tax laws.
• Employee Self-Service Portals: Includes employee self-service features, allowing employees to access their pay stubs, tax forms, and other relevant information online, reducing administrative burden.
• Dedicated Customer Support: Strong customer service options, providing businesses with dedicated support to address inquiries, troubleshoot issues, and ensure a smooth payroll experience.

Pros:

• Focus on small businesses: Their average payroll customer has 18 employees, and their product roadmap keeps that in mind.
• 24/7 support: Round-the-clock assistance via various communication channels, including telephone, chat, and online forms.
• Free trial: Offers a 3-month trial on some of their plans.
• PEO and HR Outsourcing: Provides extensive HR outsourcing solutions.

Cons:

• Extra fees: Upgrade needed for payroll tax filing, W-2, and 1099 filing.
• Lacking some functionality: Additional platforms are required for time-tracking and benefits administration. 
• Complexity in Report Generation: Some users find it challenging to generate customized reports.
• Customer Service Variability: Experiences with customer service can be inconsistent.

Pricing:

• Paychex Flex offers four tier levels: Essentials, Select, Pro, and Enterprise.
• Essentials Plan: $39/month + $5 per employee.
• Higher-tier plans require consultation for customized pricing.

Client Testimonial:

“As a small business owner, Paychex Flex has been a game-changer for us. The platform’s ease of use and comprehensive features have streamlined our HR and payroll processes significantly. While there were some initial hiccups with customer service, the overall experience has been very positive. It’s like having an entire HR department at our fingertips!”

8. ADP: Best for Companies with Many Ad-Ons and Apps

ADP stands out as a premier payroll solution, particularly well-suited for companies seeking extensive add-ons and integrations, offering a highly customizable platform to meet diverse business needs.

Key Features:

• Range of functionalities: Offers a range of features, including Human Resource Management, Payroll, Benefits, Talent Management, Time & Labor Management, Learning and Analytics, and Return to Office capabilities.
• User-friendly software: Provides innovative and easy-to-use features and offers insights into the flow of work.
• Strong integration capabilities: Supports an integrated and connected ecosystem, easily integrating with third-party solutions.

Pros:

• Scalability and flexibility: Highly scalable, accommodating the needs of businesses of all sizes, and offers flexibility to adapt to evolving payroll requirements.
• Comprehensive compliance: Robust compliance features, staying up-to-date with ever-changing tax laws and regulations, ensuring businesses remain compliant with local, state, and federal requirements.
• Extensive add-ons and integrations: Provides a wide range of add-ons and integrations, allowing businesses to customize their payroll solution with additional features, such as time and attendance tracking, benefits administration, and HR management.

Cons:

• Unclear pricing: Pricing isn’t transparent, and there are additional fees for many tools and features.
• Complex implementation process: Some businesses note that the onboarding process is complicated. 
• Expensive solution: Relatively more expensive than other payroll processors, which may be a consideration for businesses with budget restraints. 

Pricing:

ADP Workforce Now offers tailored pricing based on the specific needs and scale of the business. Detailed quotes are provided after a consultation with an ADP representative.

Client Review:

“I’ve been using ADP Workforce Now for over a decade and it’s been instrumental in streamlining our HR processes. The integration of payroll, benefits, and talent management within one platform has significantly reduced our administrative workload. While the reporting can be complex, the insights gained are invaluable for strategic decision-making. However, it’s worth noting that pricing transparency could be improved, and the occasional technical hiccups can be a setback.”

10. Hourly: Best for Companies Managing Hourly Employees

Hourly is a dynamic tool designed for businesses with mobile and hourly employees. Its unique selling point lies in combining timekeeping, payroll, and insurance into a seamless system. 

Key Features:

• Time-Tracking: With GPS tracking and real-time alerts, Hourly ensures accurate tracking of employee locations and work hours.
• Payroll Management: Integrates time-tracking data directly into the payroll system, simplifying the payroll process.
• Insurance Handling: Combines workers’ compensation with payroll, streamlining the process.

Pros:

• Additional Tools: Includes digital time cards, job costing, custom pay schedules, detailed payroll reports, automatic tax filing, real-time geofencing alerts, built-in compliance, and audit logs.
• Comprehensive Solution: Hourly is praised as an all-in-one solution for time tracking, payroll, and workers’ comp insurance.
• Affordability: Compared to other options, Hourly is considered cost-effective, especially for small businesses.

Cons:

• Connectivity Issues: Some users report problems in areas with poor cell service.
• Report Customization: Transitioning from other systems like QuickBooks may require adjustment to Hourly’s reporting style.
• Real-Time Updates: The app or web portal may occasionally require a manual refresh for up-to-date information.
• Limited Features for Specific Industries: The need for prevailing wage payroll processing can be a downside for the construction sector.

Pricing:

Hourly offers two pricing tiers:

• Gold Payroll: $6.00 per employee per month.
• Platinum Payroll: $12.00 per employee per month.

Client Review:

 “Hourly has been a game-changer for us. Its user-friendly interface makes navigating payroll information a breeze. The support team is a standout, offering quick and effective assistance whenever needed. Our only hiccup has been in low-service areas where manual time punching is required, but overall, we are thrilled with the system.”

11. Asure: Best for Small Businesses

Asure’s platform stands out for its commitment to streamlining and simplifying HR tasks. Their integrated approach covers everything from payroll processing to tax compliance, emphasizing automation and user-friendliness.

Key Features:

• Tax Compliance: The system handles calculations, payments, and filings, reducing the workload for HR teams.
• Integrations: Asure offers seamless integration with general ledger systems and HR modules.
• Employee Empowerment: Employees have secure access to their pay information, enhancing transparency and engagement.

Pros:

• Efficiency: Asure’s platform automates many payroll tasks, ensuring timely and accurate wage processing.
• Customer Service: Many users highlight the responsive and helpful customer support.

Cons:

• Not Always User-Friendly: Some users find certain aspects of the software less intuitive.
• Adjustment Issues: There can be challenges with configuring specific settings like accrual policies.

Pricing:

Asure’s pricing is segmented into four categories (Human Resources Automation, Payroll & Tax Filing, and Time & Attendance), but you must speak to a sales representative to learn more.

Client Review:

“The report function from Asure is great. I am the accountant, so I would need to use all those payroll reports to do any further reporting and analysis. I would be able to get all the reports that I want to see from Asure.”

12. Square: Best for Contractor-Only Businesses

Square Payroll, renowned for its credit card processing solutions for small retailers, extends its expertise into the payroll domain with two distinct packages catering exclusively to businesses with employees and contractors or contractors.

Key Features:

• Automatic Tax Calculations & Filings: Square Payroll simplifies tax compliance by automating calculations and filing business tax forms.
• Seamless Integration: Integrates with Square’s team management and other products, enhancing workflow efficiency.
• Flexible Payment Options: Offers various payment methods, including check, direct deposit, and Cash App.
• Comprehensive Reporting: Integrates with major accounting systems like QuickBooks Online, Xero, and Zoho Books.

Pros:

• User-Friendly Interface: Easy to navigate and integrate into existing workflows.
• Versatile Payment Methods: Offers checks, direct deposits, and Cash App payments.
• Seamless Square Integration: Ideal for businesses already using Square’s suite of services.
• Comprehensive Tax Support: Handles all federal, state, and local tax filings.

Cons:

• Not Ideal for Very Small Businesses: The pricing model might not be cost-effective for very small companies.
• Limited to Square Ecosystem: Best suited for businesses that use Square’s other services.
• Special Account Requirements: Faster payment options require setting up a specific Square account.

Pricing:

• Employees & Contractors Plan: $35/month plus $5 per employee.
• Contractors Only Plan: $5 per person paid per month.

Client Review:

“I’ve been using Square Payroll for my small retail business, and it’s been a game-changer. The integration with our Square POS system makes tracking hours and processing payroll a breeze. Tax filings, which used to be a headache, are now handled automatically. However, I wish it offered more flexibility outside the Square ecosystem, as we use a different system for some other business processes. Overall, it’s a solid solution for businesses already embedded in the Square world.”

Selecting the ideal software for your payroll needs should be a straightforward process. Once you’ve identified the necessary features for your team’s success, the options may narrow considerably. Your optimal choice is to opt for a payroll platform equipped with payroll and HR capabilities, designed to scale alongside your organization’s growth. 

Our platform, PrimePay, provides integrated solutions to over 18,000 companies, ensuring affordability while meeting their specific requirements. Plus, you can incorporate additional functionalities, such as health services or performance management, whenever needed to adapt to your evolving workforce.

The post The 12 Best Payroll Software for 2024 appeared first on PrimePay.