Payroll is relatively easy when there are only a few employees, but things can quickly become complicated at scale.
And ‘complicated’ and ‘payroll’ are two words that should not belong together. It’s not just the administrative burden that takes a toll. The risk of mistakes also increases, and that can have a damaging impact on the employee experience. A single late or incorrect payment can be frustrating; repeated issues raise serious questions and can provoke otherwise happy employees to consider searching for new employment.
Understanding the reasons why large businesses often struggle with payroll can go a long way towards preventing issues in the first place. In this post, we’ll run through why it’s challenging, as well as outline some practical solutions.
Number of Employees
The number of employees on payroll wouldn’t be an issue if everyone were on the same contract and paid the same.
But that’s not the case. It’s rare that even two employees have the same payroll requirements. Hours, rates, deductions, benefits, and other factors tend to be unique to each employee. This complexity grows, but the payroll deadline stays the same. For this reason, it’s usually best to use software or payroll outsourcing services, which can either make it easier to manage payroll at volume or take the task off your plate entirely. That can give you confidence that payroll is handled correctly, every single time, regardless of workforce size or complexity.
Integration Issues
Accurate payroll is dependent on data from other internal systems, such as finance or time-tracking. That’s fine to manage manually when there’s a small group of employees, in which case cross-referencing is sufficient, but it becomes complex when there’s a large team. Not only does it increase the risk of errors, but it can also be difficult to trace which system produced the initial issue in the first place. Using software that is designed to integrate with your business’s key platforms ensures that all your systems can communicate with one another.
Frequent Regulation Changes
Payroll isn’t just a payment issue. It’s a compliance issue, too. Reporting requirements can change frequently, and even more so when you’re managing an international workforce. Keeping up to date with those changes can be a full-time job in itself, and many organizations simply don’t have the resources to make sure they’re fully in line with tracking and implementing those changes. This is where outsourcing can really shine; you’re not just handing the job over to someone else, but to an expert who is always fully up to speed with the latest regulations. It’s a way to ensure that nothing falls through the cracks.
Reporting Pressure
As a business grows, so does its reporting pressure. Large organizations are more likely to be audited, and sometimes even shareholders want to take a closer look. Delivering reliable data and doing so quickly is not optional. Having a centralized system for your payroll will make it much easier to generate reports, turning what could be a stressful moment into a walk in the park.
