Why Staffing Firms are Looking Outside to Optimize Payroll and Benefits in 2020
If you are like your operations and payroll peers throughout the staffing industry, improving your operational efficiency and candidate experience will be two of the most important factors in your success for 2020 and beyond.
While those are large, complex initiatives, what if you could focus on some key areas and produce some quick wins? And what if you could make those improvements in a way that augments what you do today? By addressing two important elements – payroll and benefits – you can make quick, high-impact inroads that will help you overcome many of today’s business challenges. This 3 part series will help you learn how.
We’ll begin by detailing a few key challenges operations and payroll professionals face in 2020 and how tapping into new resources such as staffing software might be the easiest solution. Follow-up articles will look at more specific ways to boost operational efficiency and accuracy and enhancing your client experience.
Challenge 1: Improving Operations Through Technology
Technology is at the heart of operations efficiency and accuracy, and used well, can significantly impact your bottom line. But while everyone wants staffing software to magically transform their business, it’s never that easy. You need the right blend of technology, resources, and people to truly deliver transformative results.
In fact, Bullhorn’s recent research, from their Global Recruitment and Insight Data project, noted that 47% of staffing pros list embracing digital transformation to improve operations as one of the top two challenges staffing firms face in North America.
In speaking directly with staffing firms, a few of the biggest challenges we’ve heard are limits with payroll technology and processes, including:
- Integrating with other systems – Whether its time tracking, benefits, deductions, or a host of other items, manually retrieving and rekeying information leads to a loss of time and increase in errors.
- Ensuring correct tax rates for placed employees – This is something that you simply cannot afford to get wrong and it gets harder and harder as a number of jurisdictions can change tax rates from rooftop to rooftop. Yes I’m looking at you, Pennsylvania and Ohio. If your payroll software doesn’t include this today, it’s manual and error prone.
- Automating paycards – Manually connecting paycards to payroll is burdensome, and results in unnecessary time added for data entry.
- Benefits deductions and carrier files – Depending on how long your placements are and the types of candidates you place, managing benefits deductions in payroll can be another major hindrance to accuracy and efficiency, requiring lots of data to be manually rekeyed. And managing data files with insurance carriers can be a significant hassle, as well as something where a missed data transfer can be extremely costly.
Any expected improvement in operational efficiency and accuracy through technology must address these issues (and others). Look for technology that is both proven and constantly being updated with new capabilities that stay ahead of changes in legislation.
When applying new technology, It’s important to keep in mind that change also significantly impacts people and process. Looking for a partner that can ease some of this burden is something more staffing firms have been considering. More on that below.
Challenge 2: Improving Candidate Experience
According to recent research from the American Staffing Association and Inavero, Candidate Experience is one of the top 3 things keeping staffing Pros up at night. Sixty-one percent noted this was a top challenge, and is closely tied to to the top concern, differentiation.
How you deliver payroll and benefits for placed employees is critical to your success here. If you have an issue with payroll taxes for example, you can bet that employee will share their frustration with the hiring manager, and they will definitely remember it the next time they are in the job market.
For technical candidates looking for a long term placement, affordable, quality healthcare benefits may be key factor in the job they choose. According to United Healthcare, 80% of Americans note that voluntary benefits are important. And voluntary benefits have moved from a nice to have to essential according Willis Towers Watson and SHRM.
Benefits and temporary placements haven’t always synonymous, but it doesn’t have to be that way. If you take the right approach here, you can deliver a world-class benefit experience in a manner that’s cost efficient, and even offer some of the newest, most creative voluntary benefits without extra work.
A Better Approach: Outsource Some (Or All) of Your Payroll and Benefits
Human Resource Outsourcing companies (HROs) have been around for a long time, but more and more staffing firms are utilizing them to quickly address payroll and benefit shortcomings. These companies have the technology, teams, and expertise in place to immediately handle the challenges detailed above (and countless others).
Firms who have offloaded these elements to an HRO have been able to significantly improve operational efficiency and reduce errors. At the same time, they’ve been able to simultaneously deliver a differentiated experience to their candidates. Taking this approach can help you scale and become more efficient as you grow, enabling you to keep the resources you already have focused on your current business.
Now you may be thinking, “that’s not what we do” or “that won’t work for our business.” But pause and think about that for second – if there’s a way to quickly overcome some of the biggest challenges facing your business, without significant time, additional people, or major upfront investment, isn’t that worth investigating?