The payroll process is more than just a transactional affair. It can have an impact on the overall health of a business.
If the payroll process of a company is inefficient, it will have an effect on other facets of the business. Staff retention may be affected by poor payroll processing.
Too much staff turnover will undoubtedly eat into your profits as a business owner. Each time a staff member leaves you will have to spend time sourcing a replacement. This means that you are taking time away from production time. This also means that the new staff member’s details will have to be recorded, which will take time away from focusing on operations.
The payroll process should ideally minimise mistakes. It also helps for it to be transparent. Employees, according to the Harvard Business Review, prefer clear, down-to-earth conversations about payroll. This is why transparency is encouraged, along with questions. As a business owner, keep employees engaged.
This goes a long way towards establishing trust between employer and employee. An employee will expect a fair process, which means that payments are made on time and in full. If not, this results in less trust. Employees may also feel that they are not valued by the organisation, which may lead to them being more likely to leave.
Employees will want to know that employers value them and that they have their best interests at heart. This involves making sure that employees are paid exactly what is due to them and that they are paid on time.
Payroll processing and accounting have to be efficient and organised, which means that payments will be made when due, leading to improved staff retention.