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Trusted Brand Reviews brings you expert insights to guide your payroll processes and human resource management. Discover practical strategies to optimize these systems through HRIS and software automation, freeing up time and resources and boosting productivity.
Hr functionPayroll Tax Outsourcing: 3 Opportunities and Threats for HRPayroll outsourcing is quickly becoming a popular tactic for many businesses looking to cut costs or streamline their payroll operations. It's the act of transferring payroll administration responsibilities to a third-party source on behalf of the company. Many companies have been turning to this alternative for their payroll and other tax-related duties - and it is not something that is done lightly.
Although opting for outsourcing rather than in-house payroll handling comes with its benefits, there are some threats associated with this process as well. While outsourcing can significantly streamline payroll tax handling, employers are still held liable for federal employment taxes, even if they outsource these tasks.
With this in mind, here are some payroll tax outsourcing opportunities and threats for HR.
» HR outsourcing solutions: see whether your business needs ASO or PEO
3 Opportunities and Threats of Payroll Tax Outsourcing for HR
Here are three opportunities and threats of payroll tax outsourcing:
3 Opportunities of Payroll Tax Outsourcing
Improved control and visibilityBetter administrationReduced costs
3 Threats of Payroll Tax Outsourcing
Additional costsNo in-house knowledgeCompliance and calculation errors
3 Opportunities of Payroll Tax Outsourcing
Let's go into detail about the three opportunities payroll tax outsourcing offers:
Improved Control and Visibility
Outsourcing to another party that can manage payroll data online accurately can be highly beneficial. With today's technology, decentralized HR can benefit from digitized payroll data thanks to bolstered data visibility. And, of course, this can substantially increase HR efficiency and reduce errors.
Better Administration
It might seem counterintuitive, but outsourcing can support HR administration in general tasks, including personal file management, taxation, Social Security, and other day-to-day assignments. Ultimately, outsourcing can assist the HR department in making well-informed decisions.
Reduced Costs
Finally, outsourcing can save money on hiring additional personnel, especially during the busiest times of the year. Overall, payroll outsourcing can trim onboarding costs and scale back on training costs.
» Learn whether HR functions still outsource their services
3 Threats of Payroll Tax Outsourcing
Now, let's examine the three threats of payroll tax outsourcing:
Additional Costs
Companies often learn that outsourcing payroll could be more expensive than in-house processing due to multiple reasons. The most common one is that some suppliers might encourage clients to use their services by providing combo deals, meaning payroll firms specializing in this field may add fees for extra and usually unwanted services. As a result, it would be necessary to clearly define what services you need to avoid these fees.
No In-House Knowledge
Internal knowledge can be diminished at a significant pace for two reasons. The first is that outsourcing can result in your HR team forgetting how to do payroll. The second is that if you terminate your working relationship with an outsourcing partner, you'll need to train an HR team to do payroll.
Compliance and Calculation Errors
Failing to ensure payroll compliance and calculation errors are the two most common mistakes by payroll outsourcing service providers, which is ironic considering many businesses hire them to avoid these in the first place. However, these mistakes can cause delays in paychecks and, if they become frequent enough, this can lead to fees and penalties.
» Payroll tax vs. income tax: learn which you should pay as an employer
Outsource Payroll Tax Smartly
Payroll administration tasks are known to be overwhelming and difficult. Although engaging with a third-party source might not be the perfect solution for every employer, it's an easy fix for a complex problem.
However, if this isn't something you'd consider, adopting payroll management software could be a better alternative since it almost guarantees compliance and data accuracy.
» Not sure which payroll software to choose? Read TBR's payroll software reviews and find the one that best suits your specific needs.
Hr function4 Ways to Mitigate Co-Employment Risks to Protect Your Business’s ReputationComplex business arrangements sometimes require intricate legal and administrative contracts, which is why co-employment might be needed. This is a business arrangement between an organization and a professional employment organization (PEO), where both entities share the legal responsibilities of an employee, have some degree of an employer-employee relationship with the worker(s), and will have to take on certain obligations. Of course, both employers should have clearly defined roles and responsibilities.
Nevertheless, issues related to co-employment happen more frequently than business owners would like, potentially causing log-term reputational damage and even a PR crisis. Luckily, there are some measures business owners can take to mitigate and manage the potential risks of co-employment. In this article, we'll look at four ways to protect your organization’s reputation in a co-employment arrangement.
» Considering a co-employment agreement with a PEO? See the 3 PEO types
Strategies for Preventing Co-Employment Risks
Before we dive in, it's worth mentioning there are some common misconceptions about co-employment. Business owners often believe co-employment will cause problems related to payroll, replace the HR department, or even cause employee dissatisfaction in their organization. However, having the right co-employment strategies and considerations in place will protect you from such risks.
So, to avoid putting your company's reputation at risk, consider the following suggestions:
1. Ensure Regulatory Compliance With Employment Laws
The potential risks of not complying with labor laws are too big to ignore, as non-compliance can have massive legal, reputational, and financial consequences. That's why it's important for both organizations involved in the co-employment arrangement to be up-to-date with all the latest employment regulations & labor laws and make sure any agreements are compliant with them.
This also means that both companies understand their respective roles and responsibilities in the arrangement, and all parties are aware of their rights & obligations. Remaining compliant with the relevant laws & regulations is the easiest way to keep your business' reputation intact.
» Maintain your reputation by avoiding payroll compliance penalties
2. Verify Proper Classification of Independent Contractors
Although a co-employment arrangement is almost always used for full-time employees, independent contractors can also come into the picture and cause some confusion. It's important to remember that properly classified independent contractors are never a part of a co-employment arrangement, as they act as "independent businesses" themselves. This means they alone are responsible for all the taxes they pay and how the payroll is processed on their side. Your business won't be held liable for any payroll-related issues, as long as the contractor/freelancer is properly classified.
Thus, it's important to avoid the misclassification of employees at all costs, as it can have legal & PR consequences for both parties. By being thorough and verifying all documentation when hiring, you can protect your business's reputation in the long term.
3. Avoid Treating Independent Contractors like Employees
Even if the independent contractor is classified correctly, it can be easy to overlook this and start treating them like a regular employee. This should be avoided, as the distinction should remain clear throughout the entire co-employment arrangement. If independent contractors are treated any differently than their contract requires, it gives them legal grounds to file a complaint or lawsuit.
You can avoid a hefty lawsuit or an unwelcome visit from institutional representatives by simply abiding by federal, state, and local government laws. Make sure to keep independent contractors' rights in mind and make the distinction from full-time employees clearly visible in all aspects, from employee benefits and compensation to workers' compensation to their specific responsibilities.
» Managing workers' compensation: see what injuries aren't covered
4. Partner With an Experienced Agency
Sometimes, business owners have to delegate some of their responsibilities to ensure peace of mind, which is where reputable agencies come in. Outsourcing tasks to the right agency will help you manage and mitigate co-employment risks, as they have all the experience and resources to do so.
However, it's important to avoid agencies that are potentially non-compliant with employment laws and regulations, as they can cause much more harm than good. In some cases, your business might be held liable for the mistakes they've made, causing a permanent stain on your reputation in addition to massive legal consequences. On the other hand, a trustworthy agency will help you manage the entire co-employment process seamlessly.
Avoid Co-Employment Risks to Protect Your Business
Co-employment can be a great way to gain access to a talent pool without the full employer commitment, but if not managed correctly, your business might face severe consequences. That's why it's important to remain mindful of all the co-employment risks and take the necessary steps we've mentioned above to protect your business from all legal, reputational, and financial implications.
It's also worth mentioning that businesses in a co-employment arrangement almost always benefit from using payroll software equipped with the right features, as these solutions help businesses remain compliant and avoid many of the risks we mentioned above while saving a lot of time and resources in the long run.
» Want to remain compliant in co-employment? Read TBR's payroll software reviews and find the right solution to protect your business' reputation.
Hr functionHow Efficient Employee Onboarding & Offboarding Increases ProductivityEmployee onboarding and offboarding are two very important processes in the workplace that can make a world of difference when done correctly. Companies that fail to understand the value of integrating and parting with employees in an efficient and pleasant manner usually suffer from decreased productivity, morale, and engagement.
In simple terms, proper onboarding can help new employees quickly become much more productive members of the team, allowing them to start achieving results as soon as possible. Similarly, offboarding can help ensure that employees leaving the organization do so on a positive note and with all of their obligations fulfilled.
» Should onboarding be in your talent acquisition strategy? See what role it plays
Employee Onboarding
Employee onboarding is the process of introducing new employees to their roles within an organization that usually involves communicating the company’s culture, providing job-specific training, and introducing them to their coworkers. The goal of onboarding is to help new employees transition smoothly into their roles so they can start contributing to the company’s success as soon as possible.
Although every company has a different way of integrating new employees into the workplace, there are five crucial steps every organization must take to ensure the onboarding process is going as smoothly and efficiently as possible. These include the following:
Clearly define the onboarding process: Having verified new employee information, the first step is to document the onboarding process in writing in the form of a detailed job description and an overview of the new employee’s tasks and responsibilities. Establish a timeline: It's important to establish a timeline for the onboarding process that includes targeted milestones and deadlines to ensure the new employee is up to speed as soon as possible. Introduce the new employee to existing staff: Introducing the new hire to existing staff as soon as possible will help them feel welcome and allow them to get up to speed with the team. Provide job-specific training: A comprehensive job-specific training for the new hire should include an overview of their duties and responsibilities, as well as any software or hardware they'll need to be familiar with.Monitor and track progress: During the onboarding process, it's important to track the new employee’s progress and provide regular feedback to help identify any gaps in knowledge that need to be addressed. This forms part of your efforts to manage your workforce as effectively as possible.
Although onboarding processes aren't limited to these five steps and can be tailored to fit the needs of each organization, these best practices will ensure new employees are integrated into the team as quickly and efficiently as possible.
Benefits of a Positive Employee Onboarding Experience
A positive employee onboarding experience almost always leads to drastically increased productivity and engagement in the workplace. If the onboarding process is successful, it can:
Shorten the adjustment and learning period: Onboarding helps new employees quickly learn their duties and responsibilities, leading to increased productivity. Ensure compliance: A well-structured onboarding process can help ensure employees have a clear understanding of the company’s processes and regulations, leading to fewer errors and compliance issues. Improve communication: Introducing new employees to their colleagues can help foster better communication and collaboration between teams, bringing better results for the company. Boost engagement: A positive onboarding experience can increase employee engagement by making them feel welcome and supported. This will make them more likely to stay with the company and work hard to achieve their goals. Streamline performance tracking: Onboarding can help streamline performance tracking by giving new hires clear objectives and expectations so that employers can monitor their progress and provide feedback.Enhance job satisfaction and retention rates: Finally, a well-structured onboarding process can help improve job satisfaction and increase employee retention rates. When new hires feel their employer has invested in their success from day one, they're more likely to stay with the company in the long run and become high-performing employees.
» Managing high performers: see our tips on how to do it
Employee Offboarding
The employee offboarding process is more commonly neglected by organizations, even though it's just as important to part with employees in a friendly manner as it is to welcome them. Employee offboarding is defined as the process of transitioning an employee out of their role within the company with minimal disruption to the team.
Like integrating, separating from employees has a few best practices that can make the process much smoother for all parties involved. These include doing the following:
Make sure the employee understands their rights: Before the offboarding process begins, make sure employees are aware of any entitlements they may have, such as severance pay, health insurance, employee benefits, and even stock options.Document the separation: Ensure that all details of the separation process are properly documented and that all paperwork is filed correctly.Offer support: Do your best to provide outplacement resources to ensure the employee’s transition is successful.Ensure a smooth handover: Prior to the employee’s departure, make sure all duties and responsibilities are properly assigned to another team member. Make a positive impression: Finally, make sure that employees leave with a positive impression of their time in the organization.
Benefits of a Positive Employee Offboarding Experience
Doing your best to create a positive offboarding experience for employees can help to:
Streamline the transition: A proper offboarding process can ensure all necessary tasks are completed and the transition is smooth for everyone involved. Avoid security risks: If your employees leave on a positive note, they're less likely to share confidential information or sabotage the company in any way.Get constructive feedback: Employees leaving the organization can provide valuable insight into their experience with the company, which can help inform better decision-making in the future. Keep communication lines open: Open communication channels can help keep relationships alive, which could potentially lead to a return of boomerang employees.
Investing in a good offboarding system can help ensure the entire transition goes as smoothly as possible and that your employees leave with the best impression of your company. If they leave with only positive things to say about their experience, it will benefit the company’s reputation in the future. This can help attract potential new employees and build a sense of loyalty among current staff, improving your work environment.
» Is workplace culture important? See why it matters and how to improve it
Increase Productivity Through Efficient Onboarding & Offboarding
While it may not seem like it, both onboarding and offboarding have a huge impact on the way your employees behave and feel about your company. Following the best practices outlined above will help ensure your employees feel fully supported by your organization, fostering loyalty and helping maintain relationships for years to come.
As a final note, it's worth mentioning that using the right payroll software can help streamline the onboarding and offboarding processes. Adopting automated payroll can make these processes easier for both parties by making accurate calculations and potentially projecting how the future of the business will unfold.
» Want to streamline your onboarding and offboarding processes? Read TBR's payroll software reviews and find the right solution to help you along the way.
Hr function5 HR Considerations When Converting a Contractor to Full-Time EmployeeThe decision to convert a contractor to an employee can be daunting for a business, as the process of onboarding and managing a new employee shouldn't be taken lightly. Having someone as a contractor often means fewer responsibilities for the business, yet there are some risks associated with employee misclassification that can land an employer in hot water.
Still, for businesses that have worked with a contractor over an extended period of time and are satisfied with their work, the decision to convert them to a full-time employee may be beneficial. To avoid possible misclassification issues, businesses should ideally make the conversion within a year of working with the contractor. We'll look into the 5 most important considerations to take if you want to convert a freelancer or contractor to an employee.
1. Amount Of Work
Probably the most important consideration to take when considering a contractor-to-employee conversion is the amount of work the contractor has been doing for the business. If their work is consistent and similar to that of a full-time employee, it may make sense to convert them into an employee role. This can streamline the workflow and make all processes easier for the business, in addition to potentially reducing costs, even though they'll be entitled to overtime compensation.
2. Compensation
If you're considering converting a contractor to an employee, it's important to calculate the cost-effectiveness of the decision and consider the potential expenses. While an independent contractor's hourly rate is typically higher than an employee's, one should also calculate the taxes and employee benefits that come with bringing in a full-time employee.
Namely, contractors pay taxes themselves, but employees' taxes are paid by the employer. Moreover, bringing a full-time employee to the team means more than just a fixed salary—it also requires paying for employee benefits like health insurance, paid time off, or retirement plan benefits.
» Which taxes should employers pay? Learn about income tax vs. payroll tax
3. Benefits and Vacation
As we briefly mentioned above, an important consideration when converting a contractor to an employee is the benefits package they'll receive. Not only should you consider the cost of providing health insurance and vacation time to the employee but also how these benefits can help attract and retain top talent. As a business owner, you should see these benefits less as an upfront cost and more as a smart investment in reaching your recruitment goals. In fact, having a solid package of benefits and paid time off might have a bigger impact on a contractor's motivation to become an employee than the salary they'll receive.
So, let's take a look at all the benefits a full-time employee can receive:
Health insurance, including dental, life, and vision benefitsA yearly paid vacation & paid time offA dedicated retirement plan & savingsPerformance bonusesProfessional development benefitsSocial benefits like team-building outings and holiday parties
» Managing employee benefits: set up an effective absence & leave program
4. Training and Supervision
When hiring an employee, you'll need to provide more training and supervision than you would with a freelancer. Usually, companies have a limited ability to train independent contractors, as they're often expected to “hit the ground running” in terms of their knowledge and experience. But for full-time employees, you should be able to provide more intensive training and guidance. Of course, this might be a bit tedious in the short term, but making this part of the business' talent acquisition strategy will greatly benefit the business in terms of increased productivity and efficiency. This will ensure a good long-term relationship between the employer and the worker and ensure a pleasant work environment.
» Is workplace culture important? See why it matters and how to improve it
5. Tax Status
As you probably already know, independent contractors are alone responsible for their taxes. This is important to consider when deciding whether to convert a contractor to an employee. In most countries, becoming a full-time employee means becoming liable for taxes, as the employer will be responsible for paying them instead of the worker. Thus, the tax status should be discussed with a tax expert to ensure tax and payroll compliance and avoid any issues in the future.
When calculating costs, the employer should consider taxes and other overhead expenses, including:
The employer-paid portion of payroll taxesTravel-related expenses and similar reimbursementsTraining costsCosts related to equipment and technology investments
Regarding the legal aspect of differentiating independent contractors from employees, business owners should remember there are multiple legal papers and forms that should be filled out, including:
Income tax formsPayroll taxesLabor standards documents
Bottom Line
When converting a contractor to an employee, there are several considerations to take, including the costs of providing benefits, training and supervision requirements, and compliance with relevant local laws in your jurisdiction. While the entire process might seem tedious, there are many ways to streamline it.
That being said, many modern businesses recognize the value of using a payroll software solution to avoid all the stressful paperwork that comes with ensuring compliance with local tax laws. Adopting an automated payroll solution can simplify the process of transitioning a contractor to an employee, saving you money and time in the long run.
» Want to simplify turning contractors into employees? Read TBR's payroll software reviews to find a solution that will help you along the way.
Hr functionStartup Culture vs. Corporate Culture: Key Features & Fundamental DifferencesStartups and corporations generally have different types of cultures—typically, the former is more exciting and unique, while the latter is more stoic and rigid. But before comparing the workplace culture of the two types of businesses, it's crucial to understand the difference between a startup and a corporation. A startup refers to a business in the early stages of development that's generally viewed as a young and innovative enterprise, while a corporation is more established and will function at a methodic and slow-moving pace, with an emphasis on productivity. In this article, we'll see what the fundamental differences between the two are.
» How important is workplace culture? Learn why it matters and how to improve it
What Is Startup Culture?
Startup culture is vastly different from corporate culture. Be it in the middle of Silicon Valley or in Hong Kong, startups focus on various ways to achieve growth, whether through problem-solving or facilitating open communication among all personnel. A smaller business that just opened its doors will thrive on working around the clock and exploiting any investment opportunities that come its way.
5 Key Features of Startup Culture
Here are five key features of a startup culture:
Purpose: The new generation desires a sense of purpose when joining a firm, and smaller outfits certainly make you a critical aspect of the team.Adaptability: In today's hyper-globalized economy, it's essential to adapt to anything that changes on the fly. By acclimating to your surroundings, you foster a more creative and innovative climate.Innovation: Startups aren't trying to reinvent the wheel but to use innovation to solve common problems or find a different way of using a product or service.Values: Do startups already maintain a set of values, or are they developing as the company grows? Whatever the case, startup cultures survive and thrive by depending on the core principles of a firm.Excitement: A startup's workplace is about excitement, fun, and problem-solving. Everyone is working toward a common goal, and they want to be there, as opposed to just waiting to collect a paycheck.
Pros and Cons of Startup Culture
Here's a look at some of the pros and cons of startup culture:
Pros
Employees can learn and grow during their time at a startup.Depending on the startup, employees can enjoy a broad array of perks and benefits and a strong workplace culture.Workers might be offered stock options as part of their compensation package.
Cons
As it could fold at any moment, a startup can be a risky endeavor for employees, so there's a lack of job security.It's common for startups to require long hours at the office to help grow the business.A young and small firm will ultimately offer low salaries because it's still growing.
What Is Corporate Culture?
Corporate culture may be best defined in the cult classic "Office Space," as a group of employees stuck behind a computer in their cubicles filling out TPS reports. Many experts view corporate culture as being about hierarchy and stagnation rather than growth and innovation.
4 Key Features of Corporate Culture
Here are four key features of corporate culture:
Development: Companies that wish to retain the best and brightest employees will offer better professional and training development.Advancement: From lead supervisor to vice president, corporations extend advancement opportunities to the best employees as a form of recognition to ensure the smartest folks will lead the organization.Formality: Corporate environment is seen as more formal, as everybody follows a pre-defined set of rules in terms of start and end times, attire, breaks, behaviors, and other outlined corporate principles.Responsibility: A corporation will delegate assignments and tasks and ensure employees only concentrate on what is presented to them. Essentially, this means everyone must stay in their lane.
Pros and Cons of Corporate Culture
Here are the pros and cons of corporate culture:
Pros
Paycheck: You can be confident that the large company will be around tomorrow, meaning that you can enjoy a steady paycheck.Hours: The office only operates at certain times of the day, so your schedule is already established, giving you plenty of time to do stuff outside of working hours.Certainty: A corporate culture thrives on certainty. In other words, everything will be the same tomorrow as it was yesterday, from the workforce to values.
Cons
Innovation: It can be challenging to innovate in a corporate environment, whether due to the sheer size of employees or the potentially stoic atmosphere at the office.Communication: The corporate culture has a communication problem because of the multiple managers, supervisors, departments, and procedures. It can be hard to get in touch with everyone for a final decision.Indifference: Studies show corporate employees often feel as if they're a cog on a wheel without offering anything significant or becoming part of anything unique. This can create an aura of apathy, resulting in a wide array of consequences on productivity or work quality.
3 Fundamental Differences Between Startup and Corporate Culture
The dichotomy between startup and corporate culture is enormous, as both types of office environments maintain their own sets of advantages and disadvantages. Here are three fundamental differences between the two:
Internal controls will vary between startups and corporations. In some instances, a startup culture won't have any internal controls, which could lead to chaos should anything go south.As previously mentioned, there will most likely be considerable gaps in employee compensation and benefits between these climates. A corporate culture will start with higher pay, while a startup culture might one day offer higher pay.It is much easier for startups to correctly classify employees compared to corporations, as they deal with considerably fewer employees. When the gap in payroll numbers is this enormous, it could result in employee misclassification.
» Are you properly compensating employees? See some tips for managing workers' compensation
Know Your Company Culture
Both startup and corporate culture have their advantages and disadvantages—it's all about perspective, the company, and what's being sold to customers. The makeup of the team also matters, so when you manage your global workforce, you need to understand your employees and determine if they like a fast-paced environment or a calm and steady one.
» Both startups and corporations need streamlined payroll. Read TBR's payroll software reviews and find one that best aligns with your business needs.
Hr functionHow to Expertly Forecast Labor Demand to Optimize Labor CostForecasting labor demand is essential for any business to efficiently manage its labor costs. Accurately predicting the amount of staff you need for a given period of time can not only help you optimize the labor costs in your organization but also allow you to manage your workforce more efficiently. A precise labor demand forecast will allow you to meet customer demands while remaining cost-effective and ensuring your company isn't overstaffed or understaffed.
This article will outline the steps you need to take to expertly forecast the labor demand for your business and optimize labor costs. It will also discuss the key considerations when making predictions and provide tips on improving accuracy. Finally, it will explain the importance of regularly monitoring labor demand and adjusting forecasts accordingly so your business is prepared for any scenario.
» Labor costs can be reduced through a global workforce. See how to effectively manage yours
What Is Labor Demand Forecasting?
In simple terms, labor demand forecasting is the process of predicting the amount of staff a business will need to meet customer demands over a given period. Organizations predict labor demand based on a variety of data sources, including past performance, customer trends, and seasonal changes. A successful labor demand forecast will provide an organization with an accurate estimate of the staff that will be needed to avoid over- or understaffing.
There are multiple reasons why forecasting labor demand is a vital process for any organization. By accurately predicting the number of employees needed to meet customer demands, organizations can minimize the labor costs they incur. In addition, forecasting helps organizations prepare for any changes in customer demand, allowing them to react quickly and staff up or down as necessary.
» Need to staff up? Expand your global workforce with the right strategy
5 Proven Labor Demand Forecasting Techniques
As a data-driven process, labor demand forecasting is best performed using a combination of techniques and a human resources information system (HRIS) to ensure accuracy. Here are five of the most effective and proven techniques for labor demand forecasting:
1. The Delphi Method
The Delphi Method is a structured process involving multiple rounds of expert-led questionnaires or surveys. It requires gathering feedback from various stakeholders—including management, supervisors, and employees—which is then used to generate a consensus forecast of the labor demand for a given timeframe.
There are multiple variants of the Delphi Method you can try using in your organization:
Brainstorming – involves gathering opinions from stakeholders in an open and creative environment to generate ideas.Nominal group technique – focuses on gathering input from a smaller number of experts. Survey research – requires gathering feedback from a larger group of stakeholders with the help of surveys. Focus groups – involve gathering opinions from a smaller group of stakeholders in an interactive setting.Statistical modeling – uses statistical models to generate an accurate forecast of labor demand.
As you can probably guess, the Delphi Method is an effective tool for labor demand forecasting in various situations. For example, it can be used to accurately predict the amount of temporary staff needed during peak periods, such as holiday seasons or sales promotions. It can also be used to forecast the labor requirements for new business initiatives or to estimate the staffing for a new product launch.
2. Historical Analysis
Historical analysis is a simple yet effective forecasting technique that involves analyzing past performance to accurately predict future labor demand. This method considers past trends and patterns, such as customer demand, seasonal changes, and employee performance.
Depending on the use case, there are multiple different types of historical analysis you can try performing at your organization:
Time-series analysis – uses data from past periods to generate an accurate forecast for the future. Event analysis – looks at specific times when there have been significant changes in demand and uses this data to project future trends. Seasonal analysis – analyzes specific months or times of the year when demand is typically higher and uses this data to make projections for future labor requirements. Regression analysis – examines past performance and looks for patterns that may indicate future labor demand.
As a labor demand predicting technique, historical analysis best forecasts the labor demand for a specific period. For example, businesses can use this technique to accurately estimate the number of employees needed during peak periods such as Christmas or Easter. However, you can also use historical analysis to predict the amount of staff needed for a new product launch or a business expansion.
3. AI Forecasting
AI forecasting is a technique that relies on Machine Learning (ML) and Artificial Intelligence (AI) algorithms to accurately predict future labor demand. Modern technologies have the ability to use historical data and patterns to generate forecasts with great precision with a minimum of human intervention.
Your organization can utilize AI & ML to predict labor demand in the following ways:
Predictive models – use historical data and Machine Learning algorithms to generate accurate forecasts. Natural language processing (NLP) – a technique that uses AI to analyze various sources of data and generate insights. AI-powered recommendation – uses customer data to personalize recommendations for labor demand forecasting.
AI forecasting is a powerful tool for organizations looking to optimize their workforce planning in every scenario. By using predictive models and AI-powered recommendation engines, businesses can accurately predict customer demand, seasonal changes, and employee performance. It can also help predict the impact of changes in the labor force on the future demand for a specific job, optimize employee scheduling, and minimize overtime costs.
4. Quantitative Data Analysis
Quantitative data analysis is a technique used to analyze measurable data and draw meaningful insights from the results. It involves collecting data about the labor force, performing calculations, and interpreting the data to generate an accurate forecast.
There are multiple approaches you can take to perform quantitative analysis, including:
Statistical analysis – looks at data collected from a variety of sources to generate accurate predictions. Econometric modeling – uses economic data and mathematical models to forecast labor demand. Time series analysis – looks at the historical data to identify trends and patterns that may be used to predict future labor demand.Machine Learning algorithms – analyze large sets of data and generate accurate forecasts.Monte Carlo simulations – use probability distributions and random sampling techniques to generate predictions.
These advanced techniques can be used to forecast labor demand in a variety of ways, from predicting customer demand to anticipating changes in the labor force. Quantitative data analysis can also be used to optimize employee scheduling and minimize overtime costs. By combining quantitative and qualitative data analysis techniques, businesses can create accurate forecasts and make informed decisions about their workforce planning.
5. Market Research
Market research is a technique used to identify potential labor demand from the market. It involves gathering and analyzing data about customers, markets, competitors, and other factors to determine the potential demand for a particular job or skill set.
Depending on what insights you exactly need, you can try different ways of conducting market research:
Surveys – allow businesses to gather data about customer preferences to determine the demand for specific skillsets. Focus groups – identify trends and patterns in customer behavior. Interviews – gather data from experts in the industry and gain insights into potential labor demand.
Market research can be used to forecast labor demand in various ways, from identifying customer needs to tracking market trends. It's an effective tool for businesses looking to optimize their workforce planning in any scenario.
Benefits of Labor Demand Forecasting
Besides the obvious advantages of reducing labor costs and increasing productivity, accurate labor demand forecasting can provide your businesses with several other benefits:
It will help you avoid fraud in the personnel cycle and recognize potential emergencies in advance. By receiving precise predictions of labor demand, businesses can adjust their workforce planning accordingly and remain competitive in the market. Labor demand forecasting also allows you to track workers' compensation, which is essential for ensuring compliance with the law and maintaining an ethical workplace. By predicting labor demand accurately, businesses can identify potential growth opportunities, attract and retain top talent more easily, and make informed decisions about the workforce.
Overall, having precise labor predictions is critical for your business, as it helps you plan your workforce in the most cost-effective and efficient way possible. Without it, your business risks running into labor shortages and high turnover rates, which can seriously impact the bottom line.
» Avoid other business risks: make sure you're payroll compliant to avoid penalties
Common Challenges Associated With Labor Demand Forecasting
If your organization is new to labor demand forecasting, you may find it tricky to implement in your business. Some common challenges associated with this process include:
Data accuracy and availability – without accurate data, businesses can’t make reliable forecasts. To ensure accuracy, you need access to quality historical data and up-to-date information about the current market. Difficulty interpreting data – just having access to data isn't enough—businesses need to be able to interpret it correctly. This requires a deep understanding of data analysis techniques and the labor market. Difficulty forecasting future trends – since it’s subject to constant change, labor demand can be difficult to predict. Businesses need to stay ahead of the curve by keeping an eye on the market and staying up to date with current trends.
These challenges can be addressed by using advanced forecasting tools, conducting regular market research, and staying informed about the labor market.
Accurately Forecast Labor Demand to Minimize Labor Costs
In conclusion, labor demand forecasting is an important tool for businesses to maximize their workforce productivity and minimize costs. To ensure its success, it's important to have access to accurate data, employ advanced forecasting tools, and stay up to date with labor market trends. When done right, labor demand forecasting can provide businesses with invaluable insights that can help them stay competitive in the market.
» Staying competitive in the market is easier without worrying about payroll. Read TBR's payroll software reviews and choose one that will help your company thrive.
Hr functionFTO vs. PTO: What’s Best for Small Businesses?In today's economy, small businesses are always trying to find ways to be competitive and grow the business. While many entrepreneurs will look at external factors, a great tool could often be enough to adjust internal policies, particularly if it relates to human resources. Be it better payroll compliance or a strategy to manage and track worker compensation, there are many ways smaller outfits can rein in expenses. This is why it's important to debate the advantages and disadvantages between paid time off (PTO) and flexible time off (FTO).
» Properly compensate for time off: see what features your payroll software needs
What Is FTO?
In recent years, a long list of businesses has adopted flexible time off (FTO) policies—and their prevalence will only expand in the coming years as organizations compete for talent. FTO essentially means employers allow their employees to take time off whenever they need it, rather than instituting a predetermined paid time off (PTO) edict.
How Does FTO Work for Small Businesses?
The FTO policy works in small businesses as it would in larger companies—simply put, private firms will allow unrestricted time off to workers, as long as their deadlines are met and work is completed at the highest quality.
Pros and Cons of FTO for Small Businesses
So, what are some of the pros and cons of FTO?
Pros
Attracting Talent: when a small business is trying to attract and retain the best and brightest, it will be more appealing to qualified candidates if it offers flexibility instead of a rigid schedule.Employee Morale: the workplace culture immediately receives a boost, as more employees want to enjoy an improved work-life balance, which is quickly becoming as important as employee compensation.Money Saver: does FTO save money? Yes! Under a PTO system, employees can accrue paid time off, making it harder to track and pay employees upon resignation. In addition, administrative costs can be immensely reduced because the HR personnel doesn't need to monitor PTO.
Cons
Abuse: although employees who are part of FTO policies are likely to take less time off, there's always the risk of abuse—employees might exploit FTO and take time off whenever they wish.Schedules: another drawback for small businesses embracing FTO is that it could be more challenging to schedule employees, which then leads to other problems, such as difficulty getting work done or collaborating with the team.Compliance: ultimately, FTO could lead to more uncertainty about time off for staff. This could add to costs since it may require legal staff or more HR-related hours.
What Is PTO?
Paid time off is an HR policy that allows employees to bank a certain amount of hours that can be used for any purpose. As the name says, workers are paid while taking time off work for vacation, sickness, or personal days.
How Does PTO Work for Small Businesses?
Experts say that PTO mechanisms are beneficial for small business owners and workers, noting that it's a great tool to retain good employees.
Pros and Cons of PTO for Small Businesses
Here are the pros and cons of PTO for small businesses:
Pros
Better Management: The key advantage of PTO is that it offers the small business some control over unscheduled absences. By knowing when a staff member will be taking time off, the company can better plan and adapt.Transparency: With a PTO policy, employees are far more likely to be open and honest about their reason for not being at work, which is paramount in facilitating a positive employee-employer relationship.Tracking: The HR department will only need to track one bank of paid time off hours rather than separating personal days, sick days, and vacation times.
Cons
Confusion: Employees might not understand the difference between vacation time and other reasons why they might miss work.Costs: Depending on the small business jurisdiction, accumulated paid time off is mandated to be paid to employees on their last days at the company. However, this doesn't apply to unused personal time or sick days, causing problems for workers using the wrong type of paid time off.More Staff: If too many people are taking their paid time off, the small business might need to hire additional staff or have employees on standby, which can lead to a myriad of other headaches.
» Need help managing time off? See the best leave & absence management practices
3 Fundamental Differences Between FTO and PTO for Small Businesses
Here are the three fundamental differences between FTO and PTO for small businesses:
1. Accrual
The first major difference is that a PTO policy requires employees to accrue days throughout the year, while FTO is a benefit extended to employees upfront.
2. Payment
The second key difference is that PTO will be paid out to workers who leave the company. For the most part, FTO isn't paid out to employees when they leave or the hours are unbanked.
3. Work Culture
Small businesses that adopt FTO convey the message that they're more interested in being productive than just being a body in an office setting. Simply put, unlimited time off is fine as long as employees get the job done, which boosts workplace culture and makes employees more satisfied.
» How important is workplace culture? Learn why it matters and how to improve it
Which Is Best for Your Small Businesses?
In the end, which time off policy is right for your small business—FTO or PTO? The answer to this common question will depend on your company's specific needs, such as if you manage a global workforce or you're looking to change the HR department. By navigating your firm's day-to-day operations, you can better understand what's the best policy to integrate into your business model.
» Need payroll software to better navigate time off compensation? Read TBR's payroll software reviews and find one that's just to your liking.
Hr function7 Key Procedures for Creating a Comprehensive Talent Acquisition StrategyCreating a comprehensive talent acquisition strategy is essential for any business looking to attract and retain the best talent in its niche. As a company's employees are one of its most important aspects, a well-crafted strategy can help businesses create an accurate picture of where they are today, determine where they want to be tomorrow, and chart an exact path to get there.
For these purposes, a company needs specific functions to fulfill its long-term goals, like a talent acquisition team and an HR department that focus on managing the current employees and employing new ones. Now, let's get into the depths of talent acquisition and uncover the best procedures to develop a comprehensive strategy.
» Talent acquisition vs. HR: learn their key differences
What Is Talent Acquisition?
Talent acquisition is the process of sourcing and attracting potential employees, screening them to ascertain their suitability for the job, and ultimately hiring them. Namely, the talent acquisition process is usually tailored for each open position to ensure the new hire is a great fit for the job. A good talent acquisition strategy is especially helpful for remote companies, as it will help you scale the business and manage your global workforce.
However, talent acquisition is much more complex than it looks, as it encompasses more than just finding qualified employees and hiring them. Now, with the basics of talent acquisition out of the way, let's go over the most important procedures to create a comprehensive strategy.
1. Evaluate and Readjust Your Current Strategy
When it comes to creating a comprehensive talent acquisition strategy, the first step is to evaluate and readjust your current strategy. This process involves analyzing your company’s existing personnel policies and procedures, as well as the recruiting methods used by the talent acquisition team. Evaluating will help you avoid and mitigate risks like employee misclassification and payroll non-compliance.
Once you’ve conducted this evaluation, you should be able to identify areas that need improvement and create a plan of action to make the desired changes. This will ensure all recruitment efforts are aligned with the company’s core values and objectives—which brings us to our next step.
2. Identify Your Talent Acquisition Objectives
The next step in creating a comprehensive talent acquisition strategy is to identify your objectives. This means you need to determine what kind of talent you’re looking for in terms of the desired skills, experience, qualifications, and attitude for each vacancy.
Of course, this involves outlining the budget for the recruitment process, determining who'll be involved in the recruitment process, and deciding on any tools or techniques that will be used. This is important to ensure you’re able to attract the best talent while staying within the set budget.
» Talent acquisition objectives in 2023: see the recruitment goals your team should set
3. Employ Strategic Workforce Planning Methods
A crucial part of creating a comprehensive talent acquisition strategy is to employ strategic workforce planning methods. This involves forecasting the organization’s future needs with regard to its personnel, as well as developing and implementing strategies for hiring and retaining them.
This step includes researching the best practices in your industry and setting KPIs (Key Performance Indicators) to measure the success of the strategy and determine how cost-effective your strategies are and if there are any areas that need improvement.
4. Strengthen Your Brand
To attract the best talent for your organization, you need to have a strong reputation as an employer, which means you should be active on relevant social media and other online platforms, as well as work towards creating career-oriented content.
Having a good employer brand is key to attracting top talent, but creating it requires time and effort. This process could involve fostering relationships with university recruiters, engaging in job fairs and other events, producing content that appeals to potential job candidates, and making sure your current employees are happy with their current jobs and workplace. Strengthening your company's brand will not only help you hire new talent but will also improve your workplace culture.
5. Rely on Data and Marketing Skills for Effective Acquisition Material
Data and marketing skills are essential for creating effective recruitment materials. This involves understanding which platforms/channels will be most suitable for your target demographic, what type of content to create, and how to structure the messages you’re sending out to potential talent.
In addition, you should focus on making sure the material is easy to understand and clearly conveys the benefits of working in your company to ensure you're reaching the right people for your job vacancies.
6. Create an Airtight Onboarding Program
Once you’ve found the right candidates, it’s time to create an airtight onboarding program that will ensure new hires have all the necessary training, resources, and support they need to be successful in their roles.
An effective onboarding program should include a comprehensive introduction to the organization and its culture, as well as rigorous training and a detailed orientation program. Additionally, your onboarding process should be constantly monitored and improved to make sure new hires quickly settle into their roles.
7. Provide Development Opportunities for Employees
The final step in creating a comprehensive talent acquisition strategy is to provide ongoing development opportunities for your employees, including providing access to learning and development programs, offering career counseling, and ensuring competitive employee compensation and benefits.
You might see this step as redundant, but the benefits it offers say otherwise—it will help your organization remain competitive by having talented and motivated personnel able to reach their full potential. Additionally, it ensures you’re able to retain top talent and build loyalty among the current personnel.
» Are you properly compensating your employees? See our tips for managing workers' compensation
Build a Strong Talent Acquisition Strategy to Fulfill Long-Term Goals
Following these steps will help you create a comprehensive talent acquisition strategy that sets your organization up for success. However, it’s important to note this process should be monitored closely and adjusted if necessary to make sure it remains effective over time. With the right strategy in place, you’ll be able to attract and retain top talent for your organization.
» Looking for payroll software to manage paying new and existing employees? Read TBR's payroll software reviews to learn which would fit you best.
Hr function6 Types of Information Released for Employment Verification & Why They're NeededEmployment verification is a process that's equally important for both the employer and the employees. In addition to ensuring employers their candidates have the right qualifications, it also provides employees with peace of mind and gives them a sense of security about their prospective job.
Releasing the right information needed for employment verification can help avoid employee misclassification, payroll fraud, and other issues down the road. This article will discuss the six types of information typically released during employment verification and why they're necessary.
» Who performs employment verification? See the difference between HR vs. Talent Acquisition
What Is Employment Verification?
In simple terms, employment verification is the process of confirming an individual's employment history and job position with their current or previous employer. The information gathered during this process can be used to verify an employee's job title, dates of employment, compensation, eligibility for rehire, and more.
There are many reasons why an employer may request employment verification—it may be required by law, like when verifying the work eligibility of a new hire, or it may be done for the purposes of background checks or reference checks.
So, it’s safe to say the importance of employment verification is clear—but exactly what information is released during employment verification? Read on to find out.
Types of Information Released for Employment Verification
There are six types of information typically released during employment verification:
1. Basic Employment Information
Name and Address
The name and address of the previous employer are the most basic pieces of information released during employment verification. The new employer needs this information to confirm they're speaking with the correct company and that the employee worked there during the time period they claim they did.
Job Title
The employee's job title and a description of their job duties are also typically released during employment verification. They help the new employer confirm the employee is qualified for the position they're applying for.
Previous Employment Details
The dates of the employee's employment and the details of their job responsibilities are also typically released. With their help, the new employer can confirm the employee worked for the company during the time period they claim they did and that they have the relevant experience.
However, this is usually the bare minimum information that should be released, and some cases require more detailed information.
2. Previous Work Experience
Providing details about the previous work experience of the employee is critical, as it helps the new employer understand the employee's work history and qualifications for the position. However, it's also important for understanding the employee's workplace culture and how they might fit into the new company. For this reason, releasing detailed information about every aspect of the employee's work experience can make a huge difference.
3. Salary Information
Release of salary information is often required by law, such as in the case of employment verification for government benefits. In other cases, there are multiple reasons why employee wages need to be shared for employment verification—for instance, it helps the employer confirm the employee was paid what they claim they were or understand the employee's motivation for leaving their previous position.
» Run your payroll without a hitch with these payroll software features
4. Feedback on Previous Job Performance
Employment verification isn't just about verifying facts, but also about understanding the employee's previous job performance. As a result, feedback from the previous employer can be very insightful—by giving the new employer a glimpse at the candidate’s job performance history, they can have a better idea of what they can expect from their new hire.
5. References From Past Managers
References from past managers or supervisors can be extremely helpful in employment verification, as they provide first-hand accounts of the employee's work performance and can answer any questions the employer might have. Additionally, they can also provide insight into the employee's character and how they might fit into the company. Finally, they can provide context for the employee's decision to leave their previous position.
6. Past Criminal or Legal Investigations
In some cases, the employer might need to verify the employee hasn't been subject to any criminal or legal investigations. This is typically done by requesting a copy of the employee's criminal record from the police or by conducting a background check. However, it's important to note this information should only be requested if it's relevant to the position the employee is applying for.
Additional Information That May Be Needed
There are some cases when the employer might need additional information to verify the employee's identity or qualifications. For example, if the employee is applying for a position that requires a professional license, the employer might need to request a copy of the license from the relevant regulatory body. In other cases, the employer might need to request additional documents from the employee's previous employer, such as transcripts or certificates.
Bottom Line
Employment verification is a critical part of the hiring process, as it helps employers minimize the risk of hiring someone who isn't qualified for the position or might pose a risk to the company.
However, it's essential to understand what information can and should be released during this process. In most cases, the bare minimum information necessary is the employee's job title, employment dates, and previous job responsibilities. although more detailed information is sometimes required.
» Need to make paying new employees easier? Read TBR's payroll software reviews and find one that will best suit your preferences.
