As most hospitality businesses employ hourly paid workers, one of the most common problems we see are payroll process issues. From tracking and capturing time to transferring money, the process of paying people can waste huge amounts of effort and cost up to 1.5% of the monthly wage bill.
The problem with payroll
On the face of it, payroll is simple. Multiply hours worked by the rate of pay, send the numbers to finance, and you’re done. The reality is more complex:
- Capturing time. It’s often manual, even paper-based, and massively prone to error.
- Collating data. Turning manual timesheets into data creates more potential for mistakes.
- Authorisation and sending to payroll. If the data is fragmented and not collected in an ordered manner it makes it harder to see and sign off.
- Calculation. This can be a serious headache for businesses that pay different rates based on factors such as role (kitchen, bar or front of house staff), day of the week, hours worked and age.
- Processing. And if there are any payslip errors, tracking them can be a huge hassle.
The cost of ‘payroll pain’ impacts business in many ways:
- Wasted time and money. At one 3,000-employee business in the UK, the payroll run tied up a three-person team for 3-5 days each month.
- Dissatisfied employees. Payroll glitches can impact morale, customer service and productivity.
- Poor visibility. Without a clear view of hours, rates and pay, businesses find it hard to make cost-related decisions.
- Compliance risk. New laws are putting more pressure on businesses with hourly paid or shift workers to record, maintain and publish accurate records of hours worked.
Why do businesses put up with payroll pain?
“If it ain’t broke, don’t fix it” applies to many payroll systems. Businesses are scared of disrupting a system that works, however imperfectly. Broken payroll can be hard to see. Head office may not be aware of much admin work is needed to keep the payroll system working. Finally, no-one ‘owns’ end-to-end payroll: there’s little incentive for either HR or finance to look at the big picture.
Pay that works
There’s a one-word answer to fixing payroll: digitisation. Happily, today, this doesn't mean ripping out and disrupting an entrenched system. Using mobile apps, cloud-based data and API technology, any organisation can shift immediately to a more efficient way of managing payroll data flow.
By utilising a cloud based workforce management system that integrates payroll, time capture and scheduling, it creates an end-to-end process that’s simple, accurate, transparent, and auditable. The time taken on monthly payroll can shrink from days to hours.
Fixing payroll doesn’t just make life easier for managers, employees and finance departments. By radically simplifying a process that holds back businesses with hourly paid or shift workers, it sets you up to be more agile, responsive and cost-efficient.
UKHospitality members receive 20% off the Deputy Premium Plan for their first six months.
Make pay work for your business by trying Deputy for free or contact us on 020 3150 1149 to learn more.