Let’s face it: payroll is one of the most important tasks for the organisation as it needs to meet sensitive statutory compliance. It is also a function that has a direct impact on employee satisfaction, engagement, and retention rates.
While maintaining a competitive salary or compensation package could attract potential employees, making sure it meets efficient, fair, accurate, and ethical standards is important to give a good impression of the company among current employees, helping with good word-of-mouth and indirect marketing.
Besides this, having loopholes in the payroll and HR system can result in significant legal consequences in terms of fines, penalties, or in worst-case scenarios, even restrictions in continuing a business.
Payroll Beyond The Surface
As pioneer providers of customised HR and payroll solutions across the Middle East, we understand maintaining payroll or an HR system, in general, is easier said than done. It meets much more than the eyes, as it deals with data, numbers, and sensitive employee information.
More importantly, as payroll is regulated by the government for fair and efficient payments, especially in the UAE and neighbouring Middle Eastern countries through systems like WPS (Wage Protection System), maintaining an effective payroll accounting system comes with many challenges.
This article will break down simple yet effective methods on how to make payroll easier, especially for SMEs, in 2024.
Have Defined Payroll Policies
One of the many downsides of traditional payroll systems is that they lack defined and well-structured payroll policies. As a result, payroll tasks and processes tend to be all over the place with no proper guide or foundation to guide them.
Start by assessing the type of payroll you need according to employee categories. Then analyse local laws and regulations concerning payroll.
Outline anything that would be necessary for payroll calculation. This can include overtime, paid time off, sick leave, vacation, healthcare benefits, retirement plans, or any other allowances. This ensures that both the employee and employer are on the same page regarding payroll policies and are not experiencing any surprises.
These payroll policies should be clearly explained to new joiners, and in the event of any changes, they should be properly informed to the workforce. This goes a long way in ensuring transparency and fair practices within the organisational culture, and reduces misunderstandings.
Go Digital
One of the major drawbacks of a traditional payroll and HR system is that they are time-consuming, tedious, feature repetitive tasks, and, most importantly, are prone to errors. As we know, payroll is a sensitive task that is bound by legal obligations, conducting errors can lead to legal breaches and costly consequences.
Not to mention, as payroll deals comprehensively with numbers, even minor errors and integrated data sharing with HR can duplicate them, resulting in inaccurate reports and misleading data for decision-making. Correcting these errors can, again, be time-consuming and a hassle altogether.
Moreover, in the Middle East, legal initiatives like the Wage Protection System (WPS) monitor and ensure the timely release of salaries for employees to protect their employment rights. Manual payroll systems cannot meet this demand for efficiency as expected, which can result in non-compliance.
Going digital is the key step in simplifying payroll, especially for SMEs, who have many other areas of business growth that require manual labour, effort, and thought processes.
It also reduces the need to have more employees directed towards payroll or cut down costs on them altogether.
Divide Employee by Category
There can be many different types of employees in an organisation. This includes full-time, part-time, freelance, contract basis, or even an internship. Their employment type has a direct influence on the nature of payroll processing, as how you pay each of these categories differs.
Dividing employees by their category or payment basis can make the payroll process much easier and more straightforward. It makes it easy to retrieve data when an employee requests it or if HR needs it.
Having organised payroll data for employees is also beneficial in effective decision-making and accounting procedures.
Continued Communication & Training
Making sure your employees, especially those in the payroll team, are informed and communicated thoroughly about policy changes is key to simplifying this function. When this is not met, there is more room for misinterpretations, leading to errors, inefficiencies, and sometimes disputes.
For example, if employees are not made aware of changes in over-time or paid-time-off policies, they will be disappointed when they receive their payment at the end of the month, causing frustration, disengagement, and even turnover in the long-run.
Similarly, no matter how small or large your payroll team is, make sure they are informed about any regulatory changes. Provide them with the required training to keep up with legal payroll frameworks and how to incorporate them into the company’s payroll and HR system so it stays compliant at all times.
Educate them on the importance of adapting to new payroll systems, techniques, and technology to ensure compliance, efficiency, and accuracy. Make them understand the need to stay exposed to these positive changes and how it would benefit both the company and their careers as well.
Get Extra Help
Unlike many other organisational functions, payroll is unique. It comes with many legal and ethical requirements, as it delays employees who work within the company.
Especially for a new company or startup, understanding how to make payroll easier, the ins and outs of it, and making sure it is fair, efficient, and compliant at all times while building a business can be challenging.
This is when it is highly recommended that you seek professional help from experts who are best at carrying out this particular function on behalf of your company, i.e. payroll outsourcing.
Outsourcing your payroll solution eases the stress of monitoring it and having a team manage it, freeing up time to spend on other areas of business growth. Aside from being cost-effective, they are specialised and have networks to monitor the latest regulatory changes concerning payroll and ensure your company is duly compliant.
This saves you from the hassle of understanding how to make payroll easier, keeping track of these statutory frameworks, and constantly worrying about adherence.
Making Your Payroll Effortless
At BSH, we customise all our solutions to cater to the most unique payroll needs of our clients. As leading HR and payroll solutions providers in the Middle-East, we have dedicated teams across the regions to ensure compliance with changes in the payroll regulatory landscape.
This allows us to ensure your payroll system is duly updated and compliant with the latest changes, facilitating a hassle-free and smooth business operation.
