Don't miss these best practices to elevate HR compliance from a cost center to a strategic asset.
When HR teams are able to look beyond day-to-day operational activities and compliance responsibilities, they can focus more on identifying and capitalizing on opportunities to contribute to executive-level strategic business goals and to having a greater impact on employee wellness and engagement.
The availability of smart technology solutions allows HR departments to take a deeper look at opportunities to claim tax credits and other incentives for which they may be eligible. Those solutions also offer tools to make payroll and employee pay delivery more flexible and attractive to employees.
Raising the bar for HR compliance
Expecting more value from human resources in terms of business impact is nothing new, according to a Deloitte study. In 2016, more than half (51 percent) of companies said they were correlating business impact to HR programs, up from 38 percent in 2015.
Identifying tax credit and incentives opportunities to offset costs related to hiring or to business innovation and growth is one way that HR can lean into adding more value to the organization. Another is innovating the company's approach to pay.
Digging deeper into tax credit opportunities
Companies claim tax credits when they file their income tax returns. Tax credit programs often require records that document fulfillment of the credit, so businesses need to plan for tax credit reporting requirements and calculations in advance and keep records to prove compliance.
Often, companies are too over-burdened to even identify tax credit opportunities for which they may be eligible. In other cases, they fail to capture all the tax credits for which they may be eligible because they lack efficient and effective processes to do so.
The Research and Development (R&D) tax credit is an example of an employer tax credit that potentially eligible companies fail to take advantage of due to the complexity of identifying qualifying activities and expenses. Companies that prioritize identifying and capitalizing on these kinds of tax credit and incentive opportunities can potentially offset their investments in growth and innovation.
The Work Opportunity tax credit (WOTC) is a common example of an instance where companies typically experience sub-optimal results. WOTC allows eligible employers to secure a tax credit when they hire an employee from certain targeted groups who have historically faced significant barriers to employment. By failing to identify candidates that fall into eligible WOTC categories, employers often miss out on WOTC tax credits. Integrating WOTC data capture and qualification into the application process can help to generate a return on investment, while streamlining and improving the process, which can generate long-term benefits in terms of hiring and retaining top talent in a competitive marketplace.
Embracing the future of pay and investing in employee financial wellness
When it comes to payroll and employee pay, it isn't just how much employees are paid but how they are able to access those funds that matters. According to a 2019 ADP survey, more than 60% of employee respondents said if an employer offered more pay delivery flexibility (e.g., the ability to select pay frequency, same day pay, or early access), it would make a difference in whether they would accept a job offer.
Consumer trends and demographic shifts are leading employees to expect convenient, flexible methods of pay tied to online and/or mobile tools. Those tools can also contribute to their financial wellness by providing visibility to spending habits and guidance on planning and budgeting.
These pay card/digital pay solutions can reduce cost and effort for employers while enhancing talent recruitment and employee retention—just another example where innovation and efficiency can go beyond cost savings to contribute to the strategic goals of the company.
Making the case for change
To learn how HR process improvement can elevate your operations, download our Transforming HR Compliance guide. This interactive resource provides personalized insights into your organization's potential savings based on your company size.
Other articles in this series
- Transforming HR Compliance: Making the Case for Change
- Transforming HR Compliance: Labor-Saving Opportunities
- Transforming HR Compliance: Systems and Service
- Transforming HR Compliance: Less Risk, More Reward
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