Payroll helps you find out how many employees left your business last year and how much a contractor was paid during high season and low season. This data can save your life when paying your employees, entering into contracts with newer people, or paying taxes.
But that’s not all it does.
Payroll data can save your business from problems during a recession, with taxes, or any other problem really. Feeling curious? Let’s talk about the million-and-one ways payroll data can be a boon.
What Is Payroll Data?
Payroll is a business function that sources data from several areas and creates different types of data. That makes payroll data an amalgam of several payroll processes.
Payroll data is essential for creating more value for your company. It ensures compliance with local, state, and employment laws. It can also make employee retention and recruitment policies more effective and enable you to monitor fair pay across your workforce.
This data also helps businesses analyze and modify business strategies and make payments to the IRS and other government authorities on time.
Types of Payroll Data
As mentioned above, payroll data is collected from various sources. So, there are several different types of payroll data, such as:
- Core Salary Payments – These are regular payments given to temporary or permanent employees. The records are usually stored in a pay stub generator history.
- Contingent Workforce Costs – These are payments made to contractors, freelancers, or consultants.
- Bonuses – These are rewards given to employees for target achievements and other high-performance indicators.
- Payroll Taxes/Withheld Taxes – These are income amounts and payroll taxes withheld and remitted to tax authorities.
- Employee Benefit Payments – These are additional benefits like life or health insurance, child care assistance, pension contributions, etc.
- Compliance Information – These are funds set aside to comply with payroll laws and regulations.
- Strategic Payroll Background – This is information about salaries paid to employees in several markets or about the interest rates in critical countries.
3 Ways Payroll Data Helps Organizations During Turbulent Times
Wondering how payroll data helps your business? Check the list below:
It Builds a Useful Picture of Operational Costs
Payroll data builds a useful picture of operational costs and allows companies to analyze and modify business strategies when needed.
For instance, payroll data, as we’ve seen above, contains information about benefits, market interests, economic climates in other countries, compliance information, and more. This data can help business leaders understand where their company is being held back.
Once all business leaders are aware of the operational costs, they can cut them back down or shift them to an area that needs more cash flow, such as benefits payments.
It Improves Recruitment and Retention
Employees are the foundation of a business. Without them, no task gets accomplished, and nothing gets done.
When a business wants to hire a new employee, they have to understand the risks and costs associated with recruiting that person. They also need to think about ensuring their onboarding processes are going to get the best candidate for the job.
Payroll data helps during this time. It can enable businesses to find out when to hire new employees, when to engage contingent workers, and when to let workers move up. For instance, a long-term contractor may be a more attractive hire than a new team member who doesn’t know how the company works.
Moreover, payroll data can also help businesses figure out all the details behind employee compensation and allow them to design and offer pay packages that are more effective at luring in and retaining high-performing employees.
For instance, if you’re hiring internationally, your payroll data is going to help you find out what matters to the employees in that geographical location. If the employees from that area value flexible working more than pension contributions, you’ll be able to give it to them because you’d know about it.
It Informs Future Planning and Business Strategy
Payroll data allows business leaders to assess the organizational impacts and entire costs of short- and long-term decisions. For instance, payroll performance over time can help managers create more accurate yearly projections, allowing them to manage budgets and capital correctly.
Let’s look at an example. A business has been struggling with high employee attrition and failing productivity in several markets during a fiscal year. To figure out the impact of the issues and learn how to resolve them, you could use payroll data.
Payroll data would allow you to find out the connection between compensation, productivity, and retention specific to your business. If you find that productivity or retention were low because of lower pay, you might implement a small pay raise across all business positions.
While you know that this action may raise operational costs, it could reduce employee churn, increase engagement and productivity, and help you meet your business goals, which will translate into higher revenue and lower payroll costs.
This kind of intelligent data analysis can help you raise the chances of success, reduce business costs, attract the best candidates, and maintain a careful balance between revenue and business operations.
Payroll data can help organizations stay afloat during turbulent times by allowing them to know who they can let off and who they can’t. It can also allow them to find out employee churn numbers and work on ways to reduce them.
So, payroll data is invaluable. If you’ve never kept payroll records, now’s the time to begin keeping them.