3 big-picture insights that come with payroll reporting
Businesses across all sectors and industries can benefit from consolidated payroll reporting.
It’s no secret that COVID-19 has altered the way the world functions. Work-from-home has become the new normal for many companies and hiring remote workers outside of a business’ headquarters is increasingly appealing, as it enables them to expand their talent pool. As businesses continue to become dispersed over both state and country lines, how can they use technology to maximize their bigger picture decision making?
One department often overlooked is payroll — a typically outdated, siloed sector of a given business. Standardizing payroll data paves the way for reporting that is comparable across countries, resulting in key insights around labor costs. The insights and data collected include visibility into hiring headcount, location of a new office, extended workforce reporting, gender equality, and more. Businesses across all sectors and industries can benefit from consolidated payroll reporting, especially those in a period of hypergrowth, currently scaling, or with strong plans to move into new countries or territories based on current location.
Related: Improving the payroll process with artificial intelligence
Let’s dive into three helpful insights that come from consolidated global payroll reporting.
Cost management
It’s the job of the Chief Financial Officer (CFO) at a company to control its budget and predictive spend. Having payroll insights allows CFOs to compare year-over-year payroll spend, compare spend across different countries the company operates in, and predict what payroll costs are likely to be for the next 5+ years.
For example, if a company wants to increase its staff headcount by 10% over the next six months, payroll insights can tell the executive team approximately how much cash is needed to do so. Data from payroll insights can also reveal what the most expensive pay elements are within an organization, including employee bonuses, overtime, or additional monetary perks, and find out what regions are more expensive to hire employees.
Cost of employment
Employers pay more than just the salaries of their employees and the true cost of an employee is not always obvious. An employee’s base salary can be impacted by a number of factors, including location. For businesses that operate in multiple countries, having the ability to compare costs of employees located in various locations, in a single currency, is critical for human resource managers when comparing labor costs.
Not only do payroll insights allow for clarity into salaries when comparing operations in one country over another, but they also offer the ability to drill down into specific pay elements like an employee’s pension, taxes, and bonuses. Salary data alone doesn’t reveal the bigger picture costs and having the advantage to view these other pay elements will aid in a company’s overall understanding of the cost of employment and lead to informed decision making.
Extended workforce reporting
As a result of the post-pandemic world, reporting on contractors, project managers, non-permanent staff, and remote workers is becoming more important than ever before. A global company is more likely to hire a broader range of these types of employees moving forward, and payroll insights allow a business to analyze the cost of each contracted worker.
Additional benefits of payroll insights include gender pay gap, tracking headcount of employees, and quick data on the number of new hires and resignations. A company can also collect insight on ad hoc payments including bonuses, costs split by entity, and the cost center department.
It’s evident that payroll insights help a company make decisions way outside of just the payroll department, which can impact the strategic direction and revenue of a business. The workforce is everchanging by technological advancements, and an updated automated payroll system with strong reporting functionality should be something to consider when revamping your business strategy.
Fidelma McGuirk is CEO of Payslip.
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