State of Payroll: Everything You Need to Know About Payroll
With new technology and a changing business environment that is offering new types of careers, the state of payroll is undergoing an evolution. Here are some of the trends now impacting payroll that can drive how you incorporate this function in your business or determine how you might fill a need in the marketplace for outsource payroll services.
Payroll for Your Business
There are numerous trends that are most likely impacting the payroll function of your business:
- The move to mobile is hot among small business owners. A SurePayroll survey noted that as many as 80% of their customers are now leveraging mobile technology to assist with payroll tasks, including timesheets and scheduling employee payments.
- More companies are looking for platforms and solutions that combine tasks, including those that relate to recruiting, payroll, benefits and performance reviews. Often, a small company of fewer than 10 employees has one person performing all these repetitive tasks so finding a solution that can combine all the tasks into one is a way of saving time and money, which is crucial for today’s small business owner or startup.
- The need for more global solutions for payroll is also an emerging trend. Payroll has become more complicated as small business owners are hiring virtual staff around the world for various services, which could mean paying them in foreign currency. This means knowing how these other countries work in terms of sending payments.
- A complex regulatory environment, spurred on by new legal requirements from the Affordable Healthcare Act, are changing the state of payroll and benefits and creating financial challenges for numerous companies.
- Outsourcing HR functions is set to be a $162 billion global business this year, according to a report from Bloomberg BNA as more companies recognize the value of outsourcing over expensive in-house software solutions.
Offering Payroll Services
With the increased demand for trustworthy HR and payroll outsourcing services, this is an opportunity to explore starting your own business to fill this need. Your payroll service can provide a way for these companies to save money, improve their compliance, enhance accuracy and tap into technology without making a significant investment.
For your payroll business that means staying on top of the available apps and technology that you can integrate to provide a seamless solution for your clients, including leveraging cloud technology for easy data sharing and high levels of security. This also provides a way for you to deliver extra value that many of today’s organizations are seeking from a payroll outsource provider, including the analytics and Big Data to help them make more informed decisions about their payroll expenses, benefits, compliance requirements and other HR responsibilities. In terms of deciding what type of payroll outsourcing company to start, you can choose to offer a complete HR function or just specialize in paycheck processing or benefits management.
Another option is the expansion of what is known as the Professional Employer Organization (PEO), which involves a co-employer relationship that handles payroll, workers’ compensation, benefits and more in a way that combines the best of in-house and outsource capabilities. With these types of payroll businesses in greater demand, this is an area of opportunity that is set to continue growing. According to the National Association of Professional Employer Organizations, the industry continues to grow with $92 billion in revenues in 2012 and approximately 900 PEOs operating across the 50 states.
A Guide to Payroll
For more information to influence your decision about your payroll function or your strategy for starting your own payroll business, be sure to check out our ultimate payroll guide, which covers everything from why payroll is important and the best practices approach to doing payroll to the decision to keep payroll in-house or outsource and the basics of invoicing.