Managing your employees is one vital aspect of your business that will determine its long-term success and profitability. While modern-day candidates care for your company culture, your brand purpose, and their role in the business, their salary remains a top factor in how people choose their jobs, and how loyal they remain to your business. In fact, the smoother the payroll process and the more it benefits both the business and the employee, the greater the chances are for you to retain your dedicated staff and make them happy. Monitoring a range of payroll processes and other aspects of your HR department is essential to make this happen.
Key performance indicators, or KPIs for short, are the simplest way to keep track and measure the success of your payroll system, and make sure that your employees receive their salaries in time and in full on a regular basis. They also allow you to spot drains on your budget, so that you can optimize performance across the board. To give you an idea of what factors you should monitor, here are a few of the most relevant KPIs for your payroll to keep your business on a steady path towards success.
1. Task productivity of your team
Some companies pay their employees per hour of work, while even the ones that receive a monthly salary no matter their time contribution could benefit from some payroll adjustments. For example, the time it takes your teams to complete their typical tasks can be a clear sign of overworked employees and an understaffed business, which can lead to severe budget issues in the long run.
Alternatively, if you have enough employees, but some of them spend significantly less time on tasks and actively working, you need to reconsider your staffing needs, salaries, and workload distribution. Measuring employee productivity is vital in establishing the stability of your payroll and recognizing drains in your budget.
2. Human errors in your payroll
Whenever your employees, even the most skilled and educated among them handle certain tasks, mistakes can occur. They don’t have to be frequent or significant to take a toll on your budget and financial stability, and your employee satisfaction can also suffer. If they don’t receive their payments in time, or if they suddenly find that their salary was lower due to a clerical error – they are bound to be peeved.
Some companies have started using personalized employee income cards to cut costs of these transfers, but also to automate the payroll process so as to avoid human error. Every employee then receives their salary in time and in full, and the system tends to the details of the transaction while your accounting staff can focus on other growth-oriented tasks and issues. Plus, automated solutions often come with compliance taken care of, so that you can have peace of mind in that area as well.
3. The complete cost of payroll
From the early stages of business development to this very day, few businesses take the time or the effort to look into the comprehensive costs of their payroll for their organization. Growth can happen gradually, but in case your business experienced growth spurts that made it mandatory to hire more people, you might have lost track of your financial needs for your payroll.
Monitoring the overall cost of your payroll is essential to get the idea of the profitability of your business, as well as its long-term viability. You need to be able to provide a competitive salary, benefits, overtime, but you also need to ensure that your employees can grow in your business and get raises when it’s appropriate. You should know how much you spend on your payroll, business banking, transfer fees, taxes, and the accounting staff needed to tackle the actual payroll – that will give you an idea of what you should do to make your business more profitable in time.
4. The overtime coverage
Some companies have numerous employees on staff, even the ones that work remotely, but the projects on which they work can be of different urgency as well as complexity. In case there’s an issue your team needs to resolve, it can happen that they’ll need to stay an hour or two after their official work hours are over. With that in mind, knowing precisely how often and for which clients your teams clock in overtime can be of great help in tweaking your performance and your business-wide operations.
Perhaps the cost of introducing an added team member to your business would be lower than having your people stay after hours to finish those most urgent projects. If the workload is of seasonal nature, you can always add freelancing reinforcements in monthly increments to cover the added workload, without hiring full-time staff.
Just like you should keep track of your marketing campaigns’ success and the KPIs related to all other departments in your business, your payroll is highly dependent on your ability to make adjustments when you notice issues, and preferably do so in time to cut unnecessary costs, reduce employee turnover, and increase retention. The bottom line is that you should always be prepared to monitor your payroll process even upon introducing automation and personalization, and use it to grow your business over time.
**** This is a guest post from Elaine Bennett, Editor in Chief, Bizzmark Blog****