In the bustling customer service world, contact centers are the frontline warriors, tirelessly addressing inquiries, resolving issues, and ensuring customer satisfaction. Yet, behind the scenes, managing the workforce responsible for this critical task comes with challenges, especially regarding payroll.
Managing payroll is a key aspect that can easily become overwhelming without care. Investing in an efficient payroll management system isn’t just about saving time and money; it’s about protecting against potential legal and internal issues that could escalate into more significant problems. While there isn’t a one-size-fits-all solution, sticking to best practices can make the process smoother and more efficient.
Payroll Pain Points: Unlocking Solutions to Payroll Challenges
Each pay period presents various challenges, from ensuring accuracy and compliance to adapting to changing regulations and technological changes. The good thing is that these obstacles can be successfully managed and resolved with suitable strategies and solutions.
1. Legal compliance and legislative matters.
Running a company isn’t easy, and one of the greatest challenges in payroll processing is staying compliant. Labor laws, state regulations, and statutory requirements are among the many rules that businesses must adhere to, making compliance not an option but a necessity.
However, making mistakes in compliance isn’t always intentional. Many people struggle to understand complex, frequently updated regulations. These errors can lead to significant fines and penalties for your company, something you surely want to avoid.
Consider implementing several strategies:
- Regular Compliance Training: Provide ongoing training sessions for payroll processing employees to ensure they understand current regulations and updates.
- Utilize Compliance Software: Invest in payroll software that includes compliance features and automatically updates to reflect labor laws and regulations changes.
- Consult with Legal Experts: Seek guidance from legal professionals specializing in labor laws and regulations to clarify complex compliance issues and manage non-compliance risks.
- Regular Audits: Conduct regular payroll audits to identify compliance gaps or errors. Address any issues to avoid potential fines and penalties.
2. Inaccuracies in record-keeping and retention.
Human error often causes mistakes in record-keeping. However, errors in tracking time and leave accruals can lead to incorrect payments, which might lead to compliance issues. Therefore, keeping accurate data when managing records is important to avoid these problems.
To stay safe with regulations, it’s suggested that employees keep records for up to seven years.
Department of Labor Requirements
2-Year Retention:
- Timecards
- Piece work tickets
- Wage rate tables
- Work and time schedules
- Records of wage additions or deductions
3-Year Retention:
- Payroll records
- Collective bargaining agreements
- Sales and purchase records
IRS Regulations
4-Year Retention: Employee tax records, including:
- Personal information
- Forms 940, 941, and 1099.
- Records of wages, annuities, pensions, tips, fair market value of in-kind wages, sickness or injury payments.
- Forms W-4 and variants
- Tax deposit dates and amounts, copies of filed returns and confirmation numbers, fringe benefits, and expense reimbursements.
This approach ensures you follow all the legal rules for keeping employee payroll and tax records. Using record-keeping and payroll software can make this process easier.
3. Technological advancements.
Putting complete trust in technology may become a major global payroll challenge in today’s digital world. Blindly relying on technology can be unreliable over time.
A prime example occurred in 2022 when the Australian Taxation Office (ATO) experienced a major disruption in its online services, including payroll portals.1 This incident underscored the risks of relying solely on technology for payroll operations, as it caused widespread interruptions for businesses.
While efficient payroll software can solve many payroll management issues, it’s important to assess which technologies to implement and trust carefully. Verifying every aspect of the payroll service provider is essential to minimize potential risks.
- Quality Assurance Measures: Implement quality assurance processes to verify the accuracy of technology-generated payroll calculations and outputs. Regular audits and checks can also help identify and correct any discrepancies.
- Diversification of Technology: Avoid relying on one technology provider for payroll management. Diversify by using multiple software solutions or platforms to cross-verify data and minimize the risk of errors.
- Continuous Monitoring and Updates: Stay vigilant by continuously monitoring the performance of payroll technology and staying informed about updates or changes. This ensures that any issues or bugs are easily addressed.
- Expert Consultation: Seek guidance from payroll experts or consultants who can provide insights into selecting and implementing reliable payroll technology. Their expertise can help identify trustworthy solutions that meet specific business needs.
Related Reading: The Top 7 AI Trends Reshaping Customer Service
4. Handling payments for different types of workers.
Whether your workforce includes employees, independent contractors, or a combination, managing payments for individuals working for your organization involves several responsibilities.
Take the case of contract-based contact center employees: companies like WH Smith, Marks & Spencer, and Argos have faced issues meeting minimum wage requirements, affecting around 63,000 workers. WH Smith alone owed over £1 million to more than 17,600 workers, highlighting the seriousness of payment inaccuracies.2
This situation illustrates the potential for companies to mishandle payment processes for their workers. Utilizing a reliable payroll services provider equipped with efficient technology can help manage payments while ensuring compliance with IRS regulations.
5. Difficulties in managing attendance and leave.
Attendance tracking in contact centers often involves methods like card swipes, biometric scans, or manual sign-ins on worksheets. This attendance data must be accurately transferred, duplicated, imported, or exported across various teams to calculate pay and incentives before it can be finalized.
In some cases, managerial approvals and adjustments are necessary. The complex nature of contact center operations, extensive paperwork, and multiple individuals involved in this routine process consume significant time and effort, resulting in frequent errors and inconsistencies.
Implementing automated attendance tracking systems specifically designed for contact centers can streamline the process. These systems can easily integrate with payroll software, minimizing the need for manual data entry and minimizing errors. This not only saves time but also improves accuracy, making sure that employees are compensated correctly for their work.
6. Difficulties in managing remote work.
With the shift to remote work, traditional HR and payroll methods are no longer practical. Traditional attendance tracking methods like card readers and sign-in forms don’t work for remote setups, while managing leave and compensation manually is challenging for dispersed employees.
Processing numerous emails for HR tasks can lead to chaos. Additionally, typical onboarding and offboarding processes, involving extensive documentation and face-to-face meetings, aren’t suitable for remote or hybrid setups.
Given these challenges, there is a greater need for automated systems that can handle these issues. Establish clear remote work policies outlining attendance, leave management, and communication protocols. Provide access to HR and payroll resources through a centralized online portal for efficient communication and administrative tasks.
Related Reading: 3 Ways to Help Your Remote Customer Service Team Thrive
7. Risk to data security.
With advancing technology, the threat to data security is on the rise, presenting challenges for employers, including in the payroll industry.
For instance, recent cyber-attacks on Zellis, a payroll provider used by companies like British Airways and Boots, compromised sensitive employee data, including names and national insurance numbers.3
The payroll industry and associated data are anticipated to hold potential risks, making it a prominent challenge in this digital world. However, strengthening security measures can also prove beneficial overall.
- Implementing security protocols: Ensure that the payroll provider and internal systems have up-to-date security measures, including encryption, firewalls, and multi-factor authentication.
- Cybersecurity awareness: Educate employees on cybersecurity best practices, such as recognizing phishing attempts and maintaining strong passwords.
- Data encryption: Encrypt sensitive data during transmission and while at rest to prevent unauthorized access in the event of a breach.
- Incident response plan: Develop and consistently update a comprehensive incident response plan to ensure a quick and coordinated response during a cyber-attack.
- Vendor risk management: Assess third-party vendors’ security practices, such as payroll providers, before engaging their services and ensure they adhere to strict security standards.
SIMPLIFY YOUR PAYROLL PROCESS WITH SALEM SOLUTIONS
Experience relief from the administrative headache of payroll processing. Let Salem Solutions take care of your contingent workforce’s payroll, onboarding, and reporting needs. With our expert services, you can ease payroll management challenges and focus on growing your business and customer experience.
Say goodbye to administrative burdens and hello to streamlined operations. Partner with us, take the stress out of payroll pains and ensure efficiency in your operations.
References
1 Adams, David. “Major ATO Website Outage Puts Accountants on Edge ahead of June 5 Concession Deadline and HECS-HELP Indexation.” The Mandarin, 30 May 2022, www.themandarin.com.au/191011-major-ato-website-outage-puts-accountants-on-edge-ahead-of-june-5-concession-deadline-and-hecs-help-indexation/.
2 “WH Smith, M&S and Argos Failed to Pay Minimum Wage.” BBC News, 21 June 2023, www.bbc.com/news/business-65968986.
3 Reuters. “British Airways, Boots Staff’s Payroll Data Compromised by Cyberattack.” @Bsindia, Business Standard, 5 June 2023, www.business-standard.com/world-news/british-airways-boots-staff-s-payroll-data-compromised-by-cyberattack-123060500929_1.html.