3 Key Benefits of Integrated Timekeeping and Payroll
To an untrained eye, processing payroll seems like a simple mathematical equation – you multiply the number of hours worked by the hourly rate, and ta-da…a paycheck is delivered. It’s quite obviously much more complex than that when you think about adding in tax deductions, benefit elections and potentially even overtime. But the root of a paycheck starts with employers knowing “how much” their employees have worked. While there are several ways to understand that, the most common, and universal is, in fact, tracking time.
In a study seeking to understand the skills, capabilities, technology, and strategies required to deliver business results in today’s complex work environment, Aptitude Research Partners explored the benefits of integrating payroll and timekeeping systems and three critical benefits emerged.
1. Enhancing the employee experience. The relationship between an employee and their company is reciprocal. The employees drive the business, but they only can do that if they are set up in a position to do so. Delivering a positive employee experience will attract and retain the best in the business, and payroll plays a key role in that.
Delivering accurate paychecks is crucial to maintaining a positive employee experience that will keep your retention rates high. A staggering 49% of U.S. workers will leave a job after experiencing just two problems with their paychecks. Every generation in the workforce values growth and development in their roles, but why would they trust you with their development and performance management if you can’t accurately track their time and pay them correctly? Combining timekeeping and payroll helps enhance the employee experience because it ensures greater accuracy when the calculating engine for payroll can directly pull time data. The fewer the systems, the fewer the integrations, the fewer the reports means the fewer points there are for mistakes to happen that effect the accuracy of their paycheck.
2. Freeing up time to tackle new projects. Organizations using a solution that has both timekeeping and payroll capabilities were 44% more likely to have a payroll error rate at 2% or less. Saving payroll administrators, managers, and other employees countless hours of administrative work and the potential cost of time having to reissue checks or expensive compliance fines is key. Not to mention, creating efficiency in the process allows the payroll team to focus on other projects and explore new ways to add value to the company. Organizations with integrated timekeeping and payroll reportedly overachieved their revenue targets by 7%.
3. Ensuring regulatory compliance. Today’s regulatory environment is in a constant state of change and development, making it difficult for businesses to keep pace with compliance. No matter what size your business is, managing workforce compliance is a complex and high-stakes undertaking.
The penalties of noncompliance are steep and can be crippling for a company in terms of money, time, and resources. Heavy media coverage and the rapid exchange of information poses a threat to organizations with compliance infractions because it damages their reputation and thus the ability to attract and retain top talent when these violations become public. And contributes to the challenges of managing compliance? Time tracking tends to be at the heart. When you replace disparate tools such as timekeeping and payroll with one technology system, all your employee data is stored in one location, providing a consistent, accurate and real-time view to reduce your risk of compliance. Organizations are also automating and streamlining their repetitive, rule-based processes typically prone to human error in an attempt to proactively manage compliance and increase efficiencies. Not only does this save money and reduce compliance risk, but it also frees payroll administrators to analyze, rather than enter, data.
Everything you have read so far indicates that there is no simple equation or one fundamental thing that ensures the success of your business. Perfect paychecks, accurate timekeeping, compliance, and a positive employee experience are all intertwined in a domino-like relationship. If you can check off each of these aspects of your business, you are likely in a good place. If one falls, it can negatively impact other areas of your business in a ricochet manner.
Integrating timekeeping and payroll is not just a solution to a business problem, it’s a proactive measure to avoid the problem. Team up these two processes to ensure that employee data is accessible and accurate, eliminating the potential of human-error that a manual system threatens. With these processes handled, you can focus on enhancing the experience of your employees.