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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.
Setting Up Payroll and Taxes for Remote Employees in 2023
PayrollSetting Up Payroll and Taxes for Remote Employees in 2023A new year often means new opportunities for a better business year than the previous one. And with 2023 on the horizon, new projects & opportunities could require adding new workers to your remote team. After all, your talent acquisition strategy should aim to expand your talent pool, and doing so as a remote company with flexible working schedules is much easier. However, the legal and administrative process of setting up payroll for a new member of your team can be quite daunting, as it requires collecting the right paperwork and staying up-to-date with relevant tax laws to make sure your employee is properly compensated and reported on. All this can easily confuse you, but we're here to help—read on to learn how to manage and structure payroll and taxes for your team of remote employees. » Want to hire remote employees? See how to manage your global workforce Key Considerations Before You Get Started Before you choose your payroll software and start setting up the entire payroll structure of your organization, you first need to understand that you'll be primarily working with two types of workers: full-time remote employees and independent contractors. Let's understand the differences between them: Full-Time Remote Employees Full-time remote employees are those who work for the company on a permanent basis and receive regular compensation. They usually have set working hours and follow the employer's policies. Full-time employees are often considered 'employees' in the eyes of the law, which means you'll have to withhold income taxes and social security contributions from their salary. In addition, you'll also be responsible for providing them with all the full-time employee benefits. Independent Contractors Independent contractors are workers who don't receive regular salaries or additional benefits associated with working for the employer. They're often hired on a project-by-project basis and paid according to their services. Unlike full-time employees, independent contractors aren't considered 'employees' in the eyes of the law and are thus not subject to withholding taxes or social security contributions from earnings. So, setting up the payroll process is easy for independent contractors—the real difficulties come with setting it up for your full-time employees. Some key factors to consider before you set up the payroll process for your remote employees include: Checking the employee's location and ensuring compliance with their laws Researching the fees for bank transfers and fund transfersLooking into exchange rates if your employee accepts payments in another currencyFinding a payment method suitable for them, whether it's a direct deposit or through an e-wallet Setting Up Payroll for Remote Employees To avoid legal issues and minimize stress while managing payroll, you need to know how to properly set up the system in your organization. As you can see below, this depends on your employee's country and state of residence. Remote Employees Residing in the U.S. If your remote employee resides in the U.S., you need to comply with local, federal, and state-level tax legislation and collect the correct employee information, such as their social security number, address, and other necessary data. If the employee is in the same state as your business, the company should withhold state income taxes according to the state's jurisdiction. On the other hand, if they reside in another state, you'll have to comply with the employee's local regulations. Remote Employees Living Abroad If your remote employee resides in another country, you need to be aware of the country's jurisdiction and comply with it by determining how much tax needs to be collected from the employee and remitted to the government. Usually, this requires establishing some form of legal entity in that country, like opening an LLC or an LP. To avoid this administrative hassle, the easiest solution for handling full-time employees working abroad is hiring them as independent contractors or partnering with a global employer of record. Another alternative is to outsource a multi-country payroll provider to pay for its international employees. » Outsourcing payroll: see if HR functions still do it Setting Up Taxes for Remote Employees Taxes are a critical part of managing payroll for your remote workers. As previously mentioned, the local and federal laws vary depending on the employee's location, so you need to make sure you comply with the taxes associated with each of your remote employees. Usually, the employer pays local taxes in the country/state where the employee works in addition to registering with local and state tax agencies. Let's dive into more detail regarding taxes. Remote Employees Residing in the U.S. For remote employees living in the U.S., you need to collect and pay local, state, and federal taxes. This means withholding income taxes from your employee's wages on a semi-monthly or monthly basis and filing appropriate tax forms with the IRS (Internal Revenue Service). In addition to potentially registering your business in every state where you have a remote worker, you'll also need to familiarize yourself with the state's laws and calculate the relevant taxes at a state level. Remote Employees Living Abroad If your remote employee is living outside the U.S., you need to comply with foreign taxes and regulations. This might include setting up a legal entity in that country, registering for social security, and understanding the tax implications of paying an employee abroad. It's worth mentioning that most countries have a double-tax agreement, ensuring workers only pay taxes in the country they're currently residing. Nevertheless, this tax rate can vary vastly, so you have to make sure you have the right info. » Tax ID vs. EIN: see the difference Properly Set Up Payroll and Taxes for Remote Workers Setting up the payroll process and properly managing taxes can be challenging, but if you're familiar with the relevant laws, the underlying challenges will be easy to overcome. Nowadays, the majority of remote businesses use good payroll software to manage salaries for remote workers. These tools will save you a lot of time when processing payroll and taxes, in addition to helping you stay compliant with all relevant laws. Also, adopting an automated payroll solution will provide a way to properly set up the entire payroll infrastructure. » Need help setting up your payroll for remote employees? Read TBR's payroll software reviews to find the right solution for your remote business needs.
5 HR Considerations When Converting a Contractor to Full-Time Employee
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.
5 Legitimate Ways to Reduce Payroll Tax as an Employer
Payroll5 Legitimate Ways to Reduce Payroll Tax as an EmployerAs a business owner, you should always be looking for ways to increase revenue and reduce costs, while making sure you maintain payroll compliance with local laws. One of the biggest costs businesses have are payroll taxes, which refer to the employer's tax obligation related to their employees' compensation. Payroll taxes are used to fund federal programs like Social Security and Medicare, which is why they're seen as crucial by the government. Still, implementing certain tax-saving strategies can help you reduce the total payroll tax you pay while keeping employees satisfied and your business compliant. Read on to learn about multiple legal strategies business owners can use to reduce the amount of payroll tax they pay. » What type of tax should employers pay? Learn about income tax vs. payroll tax How to Save Money on Payroll Tax as an Employer Before deciding where and how to cut down, there are some considerations employers should take. This includes determining whether you’re a small business owner, as different strategies may be available for larger companies. Additionally, it's important to properly classify your employees, as different tax rules apply based on employee status. Regardless, there are some universal strategies you can implement to reduce your payroll tax burden: 1. Work With Independent Contractors Hiring independent contractors is one of the easiest legal ways to reduce payroll taxes, as employers don’t need to pay any employment taxes on the income they give out to freelancers and other contractors. Moreover, contractors can be paid on a per-project basis, which gives employers much more control over their payroll costs. However, it's important to avoid employee misclassification when hiring contractors, as this can lead to fines and other legal implications. » Want to convert independent contractors to employees instead? Here's what to consider 2. Offer Tax-Exempt Fringe Benefits Fringe benefits are rewards employers give to their employees beyond salaries and wages, such as health insurance, retirement plans, and more. In certain situations, these can be offered on a tax-exempt basis if they meet specific criteria set by the Internal Revenue Service (IRS). By carefully positioning fringe benefits as tax-exempt contributions, you can lower your payroll taxes without affecting employee satisfaction and jeopardizing workplace culture. 3. Use an Accountable Plan for Employee Reimbursements Under an accountable plan, employers can give their employees a certain amount of money to cover all of their work-related expenses, such as travel and training. This is an excellent way to reduce payroll taxes, as employers don’t need to pay them on these reimbursements. However, it's important to properly document all reimbursements under the plan to avoid any legal issues. 4. Improve Employee Retention Retaining valuable employees can be one of the most effective ways to reduce payroll taxes, as it decreases overall turnover costs and allows businesses to avoid paying taxes on the income they give out to newly hired employees. In most cases, it's much cheaper to keep existing talent and reward them than to hire and train new employees through efficient onboarding processes. In addition to cost savings, retaining current employees can lead to better productivity and team morale, which is why businesses should make employee retention a priority. 5. Offer Remote Work Employers willing to give their employees more flexibility in terms of where and when they work can enjoy significant savings. By allowing employees to work remotely at least some of the time, businesses can avoid payroll taxes on certain benefits related to commuting. Additionally, offering a remote work option can give employers access to a much wider talent pool. In addition to reducing costs, offering your employees the option to work remotely has a number of benefits, including: Drastically improved worker satisfaction: Employees that have the option to work remotely usually have a better work-life balance, leading to higher satisfaction and better results down the road.Increased productivity due to less time spent commuting: On average, employees waste around 30–40 minutes a day commuting, amounting to 5–10 days spent commuting on a yearly basis. Instead of wasting this time on commuting, employers can give their workers these 5 days as paid time off, leading to improved productivity and satisfaction.Reduced office overhead: Overhead expenses usually refer to telephone bills, repairs, supplies, and utilities. Having at least some of your employees work remotely can quickly add up, putting substantial amounts of money in your business's pocket. A decrease in unexcused absences: Employees that have to commute usually call in sick when they don't feel 100% healthy, as they'd rather rest than commute. On the other hand, remote employees could just continue working from home when they're feeling better, as all they have to do is sit at their home desks. » Considering hiring remote employees? Here's how to set up their payroll Reduce Payroll Tax and Save Money in the Long Term Although reducing payroll taxes can be a difficult task, it’s far from impossible. By following the methods outlined above and being mindful of different legal regulations, employers can take advantage of several strategies that allow them to save money while providing their employees with fair wages. In some cases, it might be beneficial to even hire a tax professional to oversee the entire process and help you minimize costs. It's also worth mentioning that using a payroll software solution to handle the cumbersome payroll process could be quite helpful. By implementing automated payroll software, businesses can quickly and accurately calculate all payroll taxes (and other types of spending) while remaining compliant with all relevant tax laws and regulations. » Want to reduce payroll tax more easily? Read TBR's payroll software reviews and find the right solution to help you along the way.
Startup Culture vs. Corporate Culture: Key Features & Fundamental Differences
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.
Healthcare Compliance Auditing: 8 Business Tools for Effective Compliance
Compliance servicesHealthcare Compliance Auditing: 8 Business Tools for Effective ComplianceIf there's one industry that endures the most bureaucratic paperwork, it's got to be the healthcare sector. The healthcare industry needs to fill in a broad array of forms to comply with rules and regulations at the federal or state level. But the thankless tasks of healthcare compliance, whether to avoid fraud or to submit claims, can easily be accomplished using the best tools available for your specific needs. » Ensure payroll compliance: see how to avoid penalties Types of Healthcare Compliance Audits Before we dive into the various tools healthcare professionals can use, here are two types of healthcare compliance audits that are regularly performed: Internal Audits An internal audit is done through operational tasks, processes, resources, structures, and systems. Essentially, an internal audit is about assessing and improving the organization's quality management system. External Audits An external audit refers to evaluating specific features of a healthcare firm that improves hospital compliance programs. This kind of audit, which can apply to government and commercial insurance health entities, provides the office with an outside perspective to assess the professional standards, workflows, and domestic processes. 1. Procedural Checklists Procedural checklists are an essential tool for healthcare compliance auditing. The checklist is used to ensure the healthcare organization follows the rules and regulations in place, and it should include a list of all items that need to be audited, along with the procedure for each of those items. The procedural checklist should be tailored to the organization's needs and based on the audited areas. Procedural checklists for healthcare organizations are different from those of a retail store or consumer organization and should include all key elements, such as medical documentation, patient health records, and healthcare billing. A procedural checklist is useful because it helps ensure all necessary items are being audited. It can also be used as a training tool for new auditors and future audits. Checklists ensure important things aren't forgotten and that everything is accounted for. 2. Proper Compliance Planning As compliance is an integral part of healthcare, a properly prepared compliance plan is an essential tool for effective healthcare compliance. The compliance plan should be designed to ensure the safety of both patients and healthcare workers while adhering to the governmental regulations in place for healthcare. Ideally, a comprehensive compliance plan should include the following: Written standards, procedures, and policies of conductRisk management assessmentsEmployee training planCommunication strategiesInternal monitoringKeeping abreast of regulatory changes. 3. Process Automation and Data Management As patient volumes in healthcare are increasing at a dramatic pace, there's an increased focus on data security, patient data management, and patient privacy. To ensure healthcare organizations are prepared, it's vital to automate critical tasks related to data management and ensure any data management strategies and tools in use are highly secure. Patient data is highly sensitive, and it's imperative that healthcare organizations have a system that ensures data safety and security. Any violation of patient privacy can complicate things for the organization. This step can help healthcare organizations minimize the risk of data leaks and breaches by ensuring effective data management strategies are in place. 4. Computer Assisted Audit Techniques (CAATs) Computer-assisted audit techniques (CAAT) are critical for healthcare. CAAT is a method of gathering electronic records and simplifying and automating large volumes of data to ensure improved adapt analysis. CAATs make the audit process less disruptive for healthcare organizations and can reduce the time required to complete the audit. In addition, they improve accuracy and compliance, reducing the chance of error. 5. Detailed Records and Patient Information Healthcare organizations are required to maintain detailed records and comprehensive patient information. As a result, they need effective record-keeping tools to collect and analyze this data for informed decision-making. Most healthcare organizations today are required to maintain electronic health records. Still, whichever method is in place, the important thing is to organize this information in a manner that is useful for clinicians to evaluate and refer to, much like you would when you are creating records to manage your workforce. This might be a tedious step, but patient data is extremely valuable and critical for improving the efficiency of both clinicians and the healthcare organization itself. » Automated payroll improves efficiency as well: see why you should ditch manual payroll 6. Risk Evaluation Risk assessment is a very useful tool for analyzing, assessing, and setting priorities in healthcare. Risk evaluation allows healthcare organizations to identify potential hazards, risks, and threats. Once the risk assessment and identification process are complete, a healthcare organization can estimate the level of risk and identify actions that will minimize important risks. It's important to remember that healthcare organizations are high-risk and complex, with multiple factors at play (professional, technological, and organizational). Risk evaluation is essential for patients and healthcare workers, as well as ensuring a good reputation for the healthcare organization. 7. Procedure Reviews A procedural review is a formal, structured assessment of a system or process within a healthcare unit. The goal of this review is to identify problems and implement change to ensure continuous improvement, as well as implement an effective governance program. In healthcare, any procedure that affects patients, workers, managers, and support staff needs to be evaluated to ensure there are no safety and quality issues or security breaches. For example, reviews of adverse patient outcomes or workplace grievances can ensure a healthcare organization delivers quality care and guarantees workforce safety and satisfaction. This may be one of those circumstances where you can take advantage of one of the many types of PEOs (professional employer organizations). 8. Compliance Training Healthcare is a highly regulated sector. Medical facilities generally can't operate legally without proper, in-depth healthcare compliance training. This should be an ongoing process to educate healthcare employees about their responsibilities and legal and government regulations. Such training should form an important part of the workplace culture. In addition, healthcare compliance training is critical to ensure appropriate policies and processes are set and effectively communicated to all relevant parties. Adherence to regulations, policies, and producers is a priority in healthcare and a chief component of workers' compensation, so it's important to train the healthcare staff accordingly. Conclusion From better payroll compliance to improved office efficiencies, there are many compliance audit measures healthcare offices can enjoy to enhance their compliance efforts. Whether it's better compliance training or adopting computer-assisted audit techniques, there are many steps you can take to ensure your operations are in compliance. » Want your payroll to function without a hitch too? Read TBR's payroll software reviews and make an informed decision.
FTO vs. PTO: What’s Best for Small Businesses?
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.
How to Expertly Forecast Labor Demand to Optimize Labor Cost
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.
7 Key Procedures for Creating a Comprehensive Talent Acquisition Strategy
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.
6 Types of Information Released for Employment Verification & Why They're Needed
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.

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