The holiday season is the busiest time of the year for most retailers, and many hire a seasonal workforce to ensure operations run smoothly. However, the addition of a seasonal workforce creates more payrolls for HR teams and heightens possibilities for error if the right processes and technology are not in place.
Payroll errors are no small issue. They can force employees to make hard financial decisions and have the potential to push people below the poverty line. They can also impact companies with compliance risks and a decrease in productivity and employee retention, which have a broader impact on a company’s success and hiring plans for the following holiday. To this end, business leaders hiring seasonal staff must understand how pay mistakes happen and be proactive to avoid potential errors before it’s too late.
How Does Incorrect Pay Happen?
Companies using traditional payroll processes are subject to several payroll errors. Some of the most frequent include missing/incorrect time punches and incorrect scheduling. Organizations hiring seasonal workforces can be especially prone to these mistakes since they have significantly more data to collect and analyze.
Seasonal workers often work a different number of hours each week depending on volume and other business factors. Therefore, they may have more flexible schedules and the ability to pick up overtime shifts and receive hourly pay, which can differ state by state. A OnePoll study commissioned by Paycom found 41% of U.S. HR, payroll or accounting professionals have miscalculated overtime pay and 64% have performed a retroactive payroll adjustment for incorrect or miscalculated pay.* The intricacies of seasonal workforces are especially difficult when coupled with HR teams working faster than normal to accommodate the increased hiring on top of typical year-end tasks.
How Can Errors Be Prevented?
Avoiding payroll-related issues is a primary reason for many companies to deploy robust HCM software. Payroll processes are typically outdated, and many HR software options are difficult to use and exacerbate issues during peak hiring times, like the holiday season. Businesses using a traditional payroll process can expect a 20% error rate, based on data from Ernst & Young. This creates broader issues surrounding compliance, time wasted on repairing errors and harm to the employee experience.
Implementing the right HR tech can guarantee accurate payrolls for all employees, seasonal or not. By fully automating payroll, organizations can see benefits, including increased accuracy by ensuring information is correct prior to payout; fewer payroll errors, manual checks, and voids on the general ledger; reduced wire fees and direct deposit reversals; and increased time for HR teams to focus on strategic, human-oriented work instead of data entry and administrative tasks. Businesses using the right HR tech can reduce this risk.
Why HR Tech Is Essential for Seasonal Workers
The right HR tech can alleviate several concerns of seasonal hires and their companies. For companies, HCM software can more effectively manage seasonal workforces via scheduling systems and online time clocks. Other features like self-service onboarding allow seasonal hires to enter their personal data before their first day, which ensures data accuracy and gets seasonal hires working sooner.
For employees, HR tech creates greater visibility into arguably the most important asset for seasonal hires: their paycheck. Nearly 9 in 10 Americans increase their expenses by at least $100 during the holiday season, according to a recent study conducted by Pollfish and commissioned by Paycom. An incorrect or missing paycheck can be detrimental to a seasonal worker, leading to heightened stress over finances and lost trust in their employer. Solutions like Paycom’s Beti® automatically calculate every aspect of payroll and guide employees to find and fix errors before payroll submission. Employees have a stronger sense of trust and financial reassurance from seeing their take-home pay before payday. This is especially important for seasonal hires who often work irregular schedules and overtime hours.
Employees expect their paychecks to be 100% accurate every single time, and if they are not, they lose trust in their employer, which can negatively impact productivity in the workplace and their appetite to return to the same employer for the next holiday season. Giving all employees the opportunity to be in total control of their personal information creates a more transparent, trusted, motivated work community during the busiest time of the year.
For 25 years, Paycom Software, Inc. (NYSE:PAYC) has simplified businesses and the lives of their employees through easy-to-use HR and payroll technology to empower transparency through direct access to their data. And thanks to its industry-first solution, Beti®, employees now do their own payroll and are guided to find and fix costly errors before payroll submission. From onboarding and benefits enrollment to talent management and more, Paycom’s software streamlines processes, drives efficiencies and gives employees power over their own HR information, all in a single app. Recognized nationally for its technology and workplace culture, Paycom can now serve businesses of all sizes in the U.S. and internationally.
*A survey of 300 U.S. HR, payroll or accounting professionals who regularly work in the payroll process, conducted by OnePoll on behalf of Paycom in October 2021
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ABOUT THE AUTHOR
Paycom’s director of HR business services
Tiffany Gamblin, Paycom’s director of HR business services, has more than 12 years of HR experience developing processes and collaborative strategies across different functions within the HR department, including benefits, employee relations, compliance and onboarding. As a thought leader in the HR community, Gamblin is a featured guest and contributor on webinars and podcasts on HR topics through the Society for Human Resource Management, HR.com and Paycom’s own HR Break Room™. She is SHRM-SCP-certified.