Payroll data refers to information about employees that companies need in order to pay employees compliantly.
What are the different types of payroll data?
When you start a new job, your new company will ask you to provide key information that will ensure that they pay you accurately and on time for your work with them. Different types of payroll data include:
- Employee demographics
- Labor hours and overtime
- Salary and compensation figures
- Use of employee benefits
- Tax withholdings
- Payroll processing costs
- Job code changes (labor utilization)
Why is payroll data important?
Though these details may seem mundane, analyzing payroll data in different ways can show you current and future trends in your business. These trends include things like:
- Hours worked by department
- Distribution of overtime
- Average pay rates by function
- Payroll burden by geography
Payroll data can be a powerful tool when it is standardized and leveraged strategically. Keep reading to gain insight on the impactful role that payroll data plays in your payroll process and business.
What are the benefits of leveraging payroll data?
How many meetings or conversations have you had about the cost of your payroll or the distribution of overtime in the company?
These discussions are usually fueled by best guesses and generalizations. Payroll employees manually run some reports, spend time digging through them, then collate a few data sets to pass around. In other words, you put a lot of time and effort into coming up with marginal data sets that often produce mediocre insights—and therefore mediocre results.
Payroll automation and payroll analytics offer new capabilities that make payroll data more accurate, accessible and useful. With the right technology in place, your payroll data comes in from a variety of sources, is qualified for accuracy, and is aggregated into a single, ready-to-analyze output. This puts past, present and future views of your data right at your fingertips, in real-time. Additionally, this opens the door to big opportunities for multinational businesses to use payroll data to improve compliance, strengthen business decision making, and improve recruitment and retention.
Improve compliance by using payroll data
Compliance is the number one thing on many global executives’ minds. It’s a common (and sometimes costly) topic clouded in confusion thanks to rules that often change for every country, state or region.
Clean payroll data, standardized around the globe, is a game-changer for compliance. However, many organizations still struggle to maintain clean payroll data. According to the 2021 EY Global Payroll Survey, 32% of organizations say that importing inaccurate employee source data into payroll systems is the biggest compliance challenge in their payroll processes. At a close second, 30% of organizations also identified keeping up with changing compliance regulations as a significant challenge.
Better quality data in your payroll means fewer payroll mistakes and more efficiency in processing payroll. Accurate, automated payroll data can put a stop to common problems like off-cycle payments, corrections and calculation errors when working with different currencies. And with fewer errors, the associated costs of missed deadlines and extra labor decrease as well.
How payroll data strengthens global business decisions
Access to insights through payroll data helps global leaders make better, faster decisions about the business’ strategy without having to crunch numbers in Excel, analyze a bunch of different data sets, or even qualify the accuracy of the numbers.
You can use payroll data to inform workforce planning decisions, like whether it is cost-effective to employ contingent workers in different locales. Similarly, you could compare actual benefit costs to projections for different areas to see where the most cost-effective opportunities are for expansion. A quick look at the payroll data modeling can also flag potential problems in real-time, allowing your business to react and correct problems quickly.
For example, let’s pretend a manufacturer sees a spike in overtime hours at a specific facility. This can trigger an investigation into the root cause with a same-day turnaround. Instead of losing two weeks' worth of productivity, the issue can be discovered and addressed quickly.
Improve recruitment and retention—proactively
Talent has always been a subjective area in business. But payroll data provides a new lens through which to understand the dynamics of attracting and retaining employees. Multinational employers can use payroll data to provide a snapshot of salary, worker demographics, length of employment, benefits and more to uncover employment trends across the company's global team. With this data, you can connect talent trends to local cultures, allowing you to make effective decisions regarding pay, benefits and other offerings that directly feed into talent recruitment and retention in specific locales.
For example, this payroll data can feed predictive modeling to show you how a small salary increase might affect employee retention in different regions. Or maybe better maternity benefits would help you to attract the talent you’re looking for in another region.
Using payroll data to uncover these insights puts time on your side. Your company can proactively work to keep employees happy and engaged or react to problems in the moment—instead of months after retention rates start to plummet.
Make payroll data a competitive advantage with Safeguard Global
Payroll data has been around in one form or another for decades. The difference now is that standardization and automation has made the data more timely, accurate and accessible. Speedy, accurate insights from your payroll data can be the difference between snagging a big opportunity and completely missing out. It can be the difference between nailing all the local payroll regulations or racking up a steep amount of compliance fines. It can be the difference between retaining talented employees or losing them.
So, are you using your payroll data to your full advantage? Contact us to learn more about how Payroll 360 can provide you with a centralized view of your global data, equipping you with the insights needed to get ahead and stay ahead.