The link between payroll and retention may seem obvious: you have to pay your employees in exchange for the work they do. But there’s more to it than that. Inaccurate or late payments can severely erode your employees’ trust in you as an employer and can motivate your best talent to look elsewhere.
In fact, one study found that roughly half of employees say they will start looking for another job after two payroll mistakes at their current employer. And 24% say that they will jump ship after just one mistake. And this can be detrimental to your recruiting efforts too. No job seeker is going to apply to a company that is riddled with negative Glassdoor reviews that cite “payroll issues.”
Simply put, your employees depend on you to pay them accurately and on time. This is true for everyone, but especially the 54% of Americans living paycheck to paycheck. So if you can’t get it right your employees have plenty of other options for employment with organizations that they can trust.
So what can you do? Here are four steps you can take to fix any payroll mistakes you’re making now or prevent them from happening altogether:
Overhaul your processes
If you’ve been following the same payroll process for decades, it might be time for an overhaul. Times have changed. There are better tools and methods out there for completing payroll on time and accurately. Sit down with everyone involved with payroll and map out step-by-step what you do now to complete payroll and ensure accuracy. Chances are there are some improvements you can make — whether that’s with new technology, added steps for accuracy reassurance, or new protocol for avoiding mistakes.
Conduct regular payroll audits
Even with a repeatable and consistent process in place, mistakes still happen — you’re human after all. That’s where payroll audits come in. A payroll audit confirms that you are paying employees accurately, on time, and in compliance with the law. Payroll audits should happen on a consistent schedule (quarterly or bi-annually) and should include steps like reviewing your employee list and pay rates, verifying the amount paid against the pay rate and hours worked, and reconciling internal records with tax forms.
Re-educate yourself on tax law
Tax laws and regulations change constantly. When was the last time you updated your knowledge and understanding? Get in the habit of regularly researching what’s new and identify changes you need to make in order to remain compliant. And during your reviews you might uncover information you missed or understood incorrectly, which can help you spot any issues you might be unknowingly making now.
Automate manual work
The most common cause of payroll issues is simple human error. Thankfully, there are plenty of tools out there that can automate the most complex aspects of payroll, ultimately helping you avoid mistakes, remain compliant, and build trust with your employees. The best platforms will also include features for recruiting and hiring talent so that your entire talent management process — from pre-hire to post-hire — is completed in a single location.
Every little thing you can do to curb turnover at a time when hiring is harder than ever can go a long way. Of course creating a great working environment, offering benefits, and providing flexibility are always important, but something as simple as ensuring that you provide accurate and consistent paychecks can make more of a difference than you think.
Hireology’s payroll solution can help. It’s built into our all-in-one recruiting, hiring, and employee management platform, allowing you to complete payroll seamlessly alongside other HR tasks like sending offer letters and scheduling your existing employees. You’ll never have to worry about losing data from system to system or wasting time tracking down information from separate tools. Don’t wait, schedule a demo with Hireology to learn more today.