Meeting Today’s Payroll Challenges

After a pandemic year, many companies are traversing uniquely challenging terrain as economic uncertainty, shifting consumer expectations, and evolving workplace arrangements press businesses to quickly change and adapt. While these trends touch every department, they have particular implications for payroll professionals who are tasked with ensuring operational continuity with optimal efficiency in a challenging business landscape.

Most prominently, payroll departments are managing compensation packages at a time of historic turnover. More people quit their jobs in May 2021 than any month in nearly a century, and up to 40 percent of employees indicate that they may leave their jobs in the next year. Unsurprisingly, compensation is one of the top reasons people quit, putting pressure on payroll departments as everything from changing pay packages to increased employee onboarding demands excellence.

Meanwhile, 82 percent of business leaders plan to make remote work a permanent part of their workplace arrangement, distributing once-centralized teams around the world. That’s why, according to Deloitte’s most recent Global Payroll Strategy survey, 88 percent of companies are implementing a global payroll strategy, a 38 percent increase since 2018. As a result, the report found, “Most companies operate one payroll platform for each country where they do business, the survey said. Time-tracking within a country was achieved by using multiple time-and-attendance solutions.”

In this environment, enhancing time tracking and expense reporting solutions can make all the difference, allowing payroll departments to thrive while enhancing organizational outcomes. Here are three ways payroll departments can leverage these solutions to improve time tracking and expense reporting today.

#1 Simplify Digital Solutions

Technology was a critical lifeline for many companies during the pandemic, allowing teams to safely communicate and collaborate from their kitchen tables and ad hoc home office nooks. However, even the idea of rapid digital acceleration fails to account for the dramatic transition at many companies. As a McKinsey & Company study notes, “Digital adoption has taken a quantum leap at both the organizational and industry levels.”

Before the pandemic, 10 percent of companies deployed more than 200 apps. This phenomenon, colloquially known as “app sprawl,” is pervasive in today’s companies. One post-lockdown survey found that 65 percent of respondents indicated using more digital communication and collaboration tools, while nearly three-quarters stated that it makes “work more complex.”

Often, new workflow complexity is just the first challenge. App overuse can reduce productivity while heightening employee fatigue and burnout. According to The Society for Human Resources Management, “Having too many disparate applications and platforms can waste time, impede productivity and deliver a poor experience.”

When it comes to time tracking and expense reporting, two critical tasks that demand optimal efficiency and effectiveness, combining services can simplify workflows, enhance data visibility, and reduce errors. When employee time tracking, time reporting, and expense reporting are brought under a single digital umbrella, payroll departments – and the distributed teams they serve – are best positioned to thrive in this transitional moment.

#2 Expand Expense Reporting

Before pandemic restrictions grounded flights and closed offices, business travel was a cornerstone element of customer relations. It was also a unique challenge for payroll departments charged with issuing per diem payments, accounting for travel expenses, and managing other costs associated with high-flying customer service representatives.

While business travel is back, it won’t be the same. Some companies are eradicating business travel expenses while others are paring back this practice, using communicative technologies to stay connected to their clients.

Simply put, payroll departments will continue to manage travel expense reporting by relying on automation to maximize efficiency and constrain overhead costs. At the same time, they will need to expand their capacity to include more consequential expense reporting categories.

Most prominently, companies need to pivot their expense reporting to encompass their newly remote teams. One study found that 75 percent of workers spent their own money to establish their workspaces, with the average employee shelling out $572 to procure the proper furniture, technology, and other home office fixtures. Unfortunately, as a separate remote work survey concluded, “While employers expect to have significantly more remote workers in the future compared with last year, many have yet to develop policies to accommodate those working from home.”

Companies should develop home expense policies in conjunction with payroll departments, creating a streamlined system that avoids one-off spending decisions and ensures timely reimbursement. These policies should clarify the process, allowing payroll personnel to easily differentiate reimbursements, supplemental compensation, and other spending allocations.

In addition, remote work employee expense reporting policies should be consistent, simple, and adaptable, balancing flexibility and intentionality to allow payroll personnel to account for a variety of new expense reporting requirements.

#3 Incorporate Leave Management

Remote workers desperately need a break, making it imperative that companies facilitate highly effective leave management that prioritizes time away while maintaining optimal staffing levels at all times. To begin, evaluate existing leave management policies, ensuring they are adequate for a post-lockdown business environment. Avoid excessive rigidity, and update leave management policies to accommodate on-the-ground realities.

For example, businesses should consider allowing employees to claim accrued personal time that expired during the pandemic, boosting employee morale and supporting healthy, sustainable teams.

This process is best implemented with an automated leave management solution that eliminates side deals and one-off approvals while allowing employees to self-serve when requesting time off, approving absences, and tracking employee trends.

To optimize payroll department outcomes, leave management should operate symbiotically with employee time tracking and expense reporting protocols, enhancing effectiveness across the board.

Conclusion

As businesses adjust to a rapidly changing post-locked down business environment, payroll personnel are essential to navigating this transitional moment. The challenges are immense, and a single solution won’t solve every problem they face. However, enhancing time tracking and expense reporting solutions can go a long way toward helping payroll personnel excel at their jobs. These changes can have far-reaching implications when implemented correctly, allowing businesses to thrive now and in the months and years ahead.

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Alan Tyson serves as the CEO of DATABASICS, a best-in-class time and expense management solutions provider recognized by leading global organizations for its deep expertise, next-gen technology, and customer-focused platform. Connect with Alan on LinkedIn or follow on Twitter @DATABASICSinc.