Tips and best practices to refocus your HR team's time and effort from compliance tasks to HR strategy.
Managing HR-related compliance risks is one of many critical roles performed by human resource teams. All too often, however, routine, manual tasks associated with compliance management turn skilled HR knowledge workers into manual laborers. But that doesn't have to be the case.
HR departments can overcome the status quo by taking a closer look at the time and effort their teams spend on manual HR compliance tasks and make a compelling case to automate, outsource and optimize their processes.
Making the most of your HR compliance efforts
HR operations, including payroll processing and tax filing, that require attention to compliance management typically include a wide range of manual tasks and procedures that are accepted as part of the process. The inherent inefficiencies of these operations are often accepted as a cost of doing business. But many processes can potentially introduce avoidable errors and compliance risk that go beyond the cost of inefficiency.
High-volume, routine operations like payroll processing and production are excellent candidates for automation, where rules-based systems can reduce errors and exceptions while significantly lowering costs. But according to a 2020 Deloitte Global Payroll Benchmarking Survey, only 15% of organizations surveyed currently rely on some form of next-gen technology process automation for payroll processing, with an additional 41% saying they aren't sure or do not have plans to use such technology in their payroll function.
The same survey respondents regarded payroll compliance and payroll accuracy as the top two areas for improvement. Both can be achieved through automation—with greater efficiency and cost savings.
Aside from adopting automation to support internal payroll processes, companies can choose to outsource payroll to service providers leveraging automation while providing payroll process expertise and oversite.
Making tax filing and compliance less taxing
The 2018 Deloitte survey revealed that global companies struggle most with tax compliance challenges in three areas: determining tax withholding for mobile employees, reporting local payroll taxable income, and year-end processing.
With federal employer payroll tax laws and regulations and compliance challenges compounded by inconsistent laws and regulations across 50 U.S. states, monitoring and managing employer tax compliance is a growing challenge. With 20 different kinds of employment records that must be maintained to satisfy federal requirements alone, the burden to internal staff and systems is significant.
Companies that take a hard look at their internal labor costs, the cost of inefficiency related to manual processes, and the costs related to potential compliance risks can then make informed decisions about automation or outsourcing to organizations that specialize in tax compliance.
ROI: Running the numbers
When companies take a closer look at the costs and efforts that go into HR compliance, the decision to automate or outsource can become a relatively straight-forward decision based on the return on investment from labor savings alone. But the more meaningful ROI to companies and HR teams comes from empowering employees to perform more engaging, higher-level strategic work that contributes to the company's business goals.
Download our Transforming HR Compliance guide to learn how HR process improvement can elevate your operations. This interactive resource provides personalized insights into your organization's potential savings based on your company size.