Trends defining today’s payroll management require that companies embrace cloud-based payroll software and ditch manual processing. And businesses of all sizes can benefit.
The main trends in the world of payroll management today have served to highlight the growing importance of payroll software.
In 2022, these trends included the need for:
- Personalised employee experiences
- Salary compliance
- Flexible payment automation
- Improved employee data and insights
- Mobile bank integrations
- The use of cloud technology.
Companies who stick with manual processing for payroll will continue to struggle to adapt to these trends, and such ineffective payroll management systems will hurt both employees and employers.
Consequently, companies looking to adopt an effective and efficient payroll management system must embrace advanced payroll software to help enable better employee and employer experiences.
This applies equally to small business owners as much as to medium and large business owners.
In this article, we will consider the benefits of payroll software to both employers and employees as a way to encourage companies still stuck with manual processing to make the transition to digital payroll.
We will cover:
- Benefits of payroll software to employers
- Benefits of payroll software to employees
- Getting started with cloud-based payroll software
Do you want to improve your payroll management by using cloud-based payroll software? Sign up for NOW Money for cost-effective, simple, smart, and flexible payroll management or learn more about how NOW Money can help your business.
1. Benefits of payroll software to employers
Many companies that have grown frustrated with manual processing have traditionally tried to outsource their payroll management instead.
However, we have argued that an outsourced payroll solution creates other disadvantages that makes them inefficient.
As we consider the benefits of payroll software, we will emphasise why applying in-house digital solutions is superior to both manual processing and outsourced payroll solutions, especially in the context of the ongoing trends in payroll management.
A major regulation provided by the WPS requires that these companies pay wages and salaries electronically. Also, recent updates to the WPS regulations – Ministerial Resolution No.43 of 2022 – requires that companies pay at least 90% of workers’ wages through the system (allowing for some withholdings/deductions) and onboard new employees to the system within 30 days.
These requirements of the WPS have further emphasised the importance of payroll software.
With such software, employers can easily add new employees to the system, generate necessary salary information files (SIFs), and upload them to the WPS system.
Importantly, this seamless integration with WPS will ensure compliance with government regulations. In countries that pay personal income tax, this software can also help with payroll taxes ensuring that your tax filing adheres to government regulations.
Furthermore, today’s advanced payroll software providers can easily keep up with changes in regulations and update the platform’s guidelines to reflect such changes, essentially doing the compliance work for you. Said differently, “the most optimal way to manage payroll and comply with state and federal laws is by leveraging a robust payroll management software,” according to Evoke Technologies, a IT services provider.
This is important because, according to a report by Deloitte, maintaining compliance with regulations is the primary challenge of payroll systems across the world.
Saves time and money
The manual processing of payroll usually requires employing multiple staff to handle various aspects of payroll.
And as a company grows, the need for payroll staff grows, leading to higher costs of operation.
Relatedly, manual processing requires that staff members spend much more time preparing necessary documents and processing payments of remuneration. When human error occurs, it will even require more time to make adjustments.
While an outsourced payroll solution might be cheaper and require less time than manual processing, it is not as efficient as using payroll software.
Outsourced payroll service providers will still require monthly retainers that are large enough to cover their own cost of operation and turn a profit for their owners. Also, monitoring these providers to ensure they are working in your best interests may require significant time as well.
In contrast, payroll software can save employers lots of time and money.
Regarding time, the automated processes provided by payroll software reduces the time humans need to work on payroll management.
Regarding cost savings, payroll software can save you from paying expensive monthly retainers.
Moreover, as the number of your employees grows, payroll software will result in lower average cost per employee. Though “many organisations believe they can reduce cost by outsourcing payroll,” according to Deloitte, “processing payroll in-house is typically the lowest-cost solution.”
Data security and control
The increased need to secure data of employees can also help highlight the importance of payroll software.
When a company outsources its payroll management, it gives an entire organisation control over employee information. If this data gets into the wrong hands, the safety of the company’s employees may be compromised.
To avoid such scenarios, it is better and safer for a company to take charge of its own payroll management and employ payroll software that provides necessary security measures.
“With data becoming more accessible, movable and sometimes even malleable, it becomes increasingly important for organisations to improve data security,” said Wayne Herbert, CEO of AI Assets, a data analytics company for real estate companies. “Owning data allows organisations to safeguard, control and limit access to sensitive information.”
In addition to data security, companies who control employee’s data can analyse such data to generate insights that will help them improve their payroll management system, as well as their overall human resource strategy. “Owning your data could streamline data processing as you no longer have to use multiple information silos and can customise reporting and insights generation to meet your business needs,” says Herbert.
Digital record keeping
With payroll software, employers can store relevant data, documents, and reports (including payslips and expenses report) on the cloud, where they are safer and can be easily accessed.
In contrast, manual payroll management will require sorting through numerous files before key documents can be accessed. And with outsourcing, this will require spending time coordinating with the provider.
By removing these inefficiencies, payroll software enables quicker access to payroll information for legal, compliance, and auditing purposes, among other reasons.
With manual processing, the transition process can include a very detailed handing over of necessary documents and unique knowledge of the system. Transitioning from one outsourced provider to another can also be difficult since they both use different systems.
Today’s advanced payroll software is designed to be easy to use for those without any technical expertise, providing cloud-based platforms with easy windows to the entire payroll process. Consequently, anyone in the HR department can quickly learn how to operate the system.
This can be very helpful when the HR staff in charge of the software is leaving the company. Since these platforms are designed to be easy to use, another HR person can easily take over, ensuring continuity.
Adapting a payroll software to the current realities of the company can be as simple as a few clicks of a button. With manual processing, this will require a lot of documentation; and it will require a lot of coordination in the case of outsourced providers.
Flexibility is very important to payroll management, as the experience of iPay Holding has shown. By changing the frequency of sales incentives payment from quarterly to daily, this company experienced a 50% increase in sales performance among its retail team.
The ease of adopting new sales strategies with payroll software makes it better adapted to improving business performance.
And this goes back to the point we made about data control. The more control an employer has over payroll data, the more insights they can generate, and the more tweaks they can make in their business development and sales model.
2. Benefits of payroll software to employees
Now that we have considered the importance of payroll software in relation to employers, let’s focus on the benefits that accrue to employees.
These benefits should just as equally encourage business owners to embrace cloud-based payroll software, since happy and mentally healthy employees are the most important resources in any organisation.
Below are five key benefits for employees:
Receiving wages and salaries (and other remuneration) in cash can be dangerous even in a safe country like the UAE. Even paychecks have the same disadvantage.
In contrast, by receiving wages and salaries electronically through a payroll software already integrated with their mobile bank accounts, employees can be at ease and feel more secure.
Quick access to remuneration
A more efficient payroll management means timely payment of employee salaries.
Since payroll software is the most efficient, it gives employees quick access to their remuneration.
“By paying employees on time consistently, you are essentially saying that you appreciate their contribution to the workplace and want them to remain employees at your business,” said Buddy Punch, a time tracking software. “This, in turn, will make employees want to stay in their jobs long-term. It also keeps you from getting in trouble for violating employment law.”
The change in the frequency of sales incentives led to higher sales performance in iPay Holding because it met the needs of the sales agents, which made them more motivated.
Said differently, the flexibility offered by payroll software allows companies to make changes to payroll systems that are beneficial to employees.
Better financial management and access to financial services
When employees receive their remuneration electronically, they are able to access various financial services (expenses tracking, financial reports, bills payment, etc) that will improve their financial management.
Also, a reliable payroll software that ensures timely payment will make it possible for employees to create a budget around their income and meet their needs as at when due.
Likewise, payroll platforms like NOW Money give all employees in your company’s payroll system access to a free mobile bank account, which provides access to numerous basic financial services.
This includes access to low-rate international money transfers, as well as the ability to top up phones of family and friends back home.
Another important service that NOW Money provides is salary advance.
This allows employees to receive their salaries before payday when their financial situation requires it. In this way, they can meet emergencies without going through the hassle of seeking expensive bank loans.
Greater satisfaction and productivity
Timely payment of remuneration will improve employee satisfaction and happiness. “Employees prefer being paid on time as it signifies respect in terms agreed, according to My Work Pay, a HR software. “This benefit results in the satisfaction of employees. Thus, payments that are done on time foster great teamwork.”
Furthermore, greater satisfaction leads to greater productivity. A study by Inc has shown that positive workplace satisfaction improves productivity by 31%.
Consequently, the importance of payroll software can be seen in how it improves employees’ satisfaction and productivity.
3. Getting started with payroll software
Now that we have discussed the importance of payroll software to both employers and employees, let’s consider how you can get started with payroll software in the UAE.
From what we have said so far, it is obvious that any payroll software that an employer chooses must be flexible, simple to understand, easy to use, cost-effective, secured, and compliant with relevant regulations.
These features are what NOW Money provides for employers in the UAE.
In regards to flexibility, Dubai-based iPay Holding was able to adjust the frequency of its sales commissions with NOW Money, leading to a 50% increase in sales performance.
Employers can easily tweak components of their payroll strategies at no extra cost just like this.
The NOW Money platform is simple to understand and easy to use; it requires no technical coding skills. Also, the onboarding process is straightforward and the platform itself is user-friendly.
Furthermore, the platform has an authorisation system that allows the admin in charge to grant access to other users while limiting what they can do or not do on the platform. This ensures that employees’ data are kept away from those not allowed to access it.
In regards to pricing, NOW Money only charges AED 0.50 for every SIF that employers upload to the platform, irrespective of the number of employees. This means that even when your employees are growing, your payroll cost remains the same. Consequently, you can grow with the software and even reduce the average cost per employee.
Furthermore, when an employer signs up for a payroll account, their employees will qualify to open free mobile bank accounts. In this way, employers can easily pay workers electronically and contribute to improving financial inclusion for underbanked people.
NOW Money does this by also providing access to low-rate international transfer services, as well as international mobile airtime recharges.
By serving as both a payroll software provider and a WPS agent, NOW Money is also able to keep up with new WPS regulations and update users about what they need to do to comply.
Do you want to enjoy the benefits of payroll software in the UAE, as well as provide your employees with free mobile bank accounts? Sign up for NOW Money now or learn more about how NOW Money can help transform your payroll management system.
Payroll management is advancing and manual processing cannot provide employers with the edge they need.
Employers who want an effective and efficient payroll management need to deploy payroll software.
Payroll software helps employers to comply with regulations, save time and money, secure their data and generate insights from them, keep relevant digital record records, ensure continuity in payroll capability, and be flexible with payroll strategies and policies.
Payroll software also helps employees receive their remuneration in a timely, flexible, and safe manner and this can improve their financial management, job satisfaction, and productivity.