Payroll Software Buyer's Guide
By Alainia Conrad, Market Research Associate
There are several reasons why companies of all sizes need payroll software. Probably the most significant reason is the cost of the workforce, estimated to be as high as 70 percent of operating expenses (according to the Human Capital Management Institute). Another important reason is the complexity of the regulatory system, with hundreds of rules at different levels of government: municipal, state, national and international. Failure to comply with all these regulations may lead to hefty fines or even lawsuits, which can have a negative impact on the financial stability and reputation of the company.
These are the most obvious reasons why companies need payroll systems, but there are also a few important reasons that may not be so evident. One of them is the relationship between employee satisfaction and compensation or pay. A recent study by the Society for Human Resources Management (SHRM) shows that of all the factors that contribute to job satisfaction, pay and compensation has the most significant gap between importance and satisfaction.
While 61 percent of employees consider pay and compensation to be very important to them, only 26 percent are very satisfied with this aspect of their job. This is not only due to the salaries people are earning, but also how they are being paid and the perks they receive.
- Software allows businesses to adapt to new types of work, such as temporary positions and remote work.
- A payroll system can assist in the management of all financial responsibilities.
- A comprehensive system will keep your business in line with all relevant laws and regulations.
- Analysis of payroll data provides insight into labor costs, compliance and industry changes.
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Adapt to New Types of Work
Different ways of working are gaining traction worldwide, for example, temporary and remote work. While some companies have tried to fight these trends and impose work conditions on their employees, this new reality is forcing companies to adapt and be more flexible in regards to how and where their employees work.
Here are some statistics showing why these new types of work are important and why they should not be ignored:
- Temporary work has been around for decades and it currently represents more than a fifth of the total employment in Spain and the Netherlands, in addition to 15 percent or more of total employment in Finland, France and Sweden. While temp jobs represent only 2 percent of total employment in the United States, that number has more than doubled since 1990. Furthermore, one in 10 jobs created since 2009 in the United States are temporary jobs, according to The Economist.
- Remote work is also on the rise, as 91 percent of UK companies employ at least one employee who works from home. The trend will continue with successive generations. Take millennials, for example — the great majority of them would prefer to telecommute 100 percent of the time, according to CIPHR.
Since many employees will soon either work temporarily or outside of the office, it will become very difficult to track what they work on and for how long. In order to address this issue, companies need to trust their employees and provide them with the tools to easily track their work time.
For organic growth, payroll can become a challenge when the company expands into new geographical locations or diversifies its activities. When new business activities require new types of work (temporary, unionized, etc.), companies need to comply with different sets of rules. More complex activities also require more functionality, such as better time tracking.
When it comes to the number of employees, only a big shift like exponential growth can cause real problems. Most of the different types of systems are fairly scalable and able to adapt to the growth of the company. The challenge comes from the fact that growing companies will inevitably invest in HR or HCM systems that may or may not include payroll functionality.
If the company decides to keep its standalone system because it covers the company’s specific needs, it should make sure that the system can be used together with all the systems it needs to integrate with (ERP, HR/HCM, etc.).
Adapting to Technological Advancements
As technology becomes an increasingly important part of our lives, we expect the software we use at work to be as simple as the tools we use in our personal lives, such as social media platforms. This can be a challenge for companies that are trying to keep up with these new expectations, but also keep data secure. Bring your own device (BYOD) is an important challenge for companies since employees tend to use unsecured devices to access company payroll data. This trend extended to mobile apps and is impossible to control, even though some companies have tried to ban mobile devices at work.
Another challenge that companies experience as they grow is the need for integration between payroll software and other systems. Since many companies in industries like manufacturing and retail continue using on-premise ERP software, integration remains important. Even when companies decide to adopt mostly cloud-based software, silos previously created in on-premise software may move to the cloud. While integration between cloud systems is relatively easy, the more systems that are used, the more complicated integration gets.
Staying Up-to-Date with Changes in Regulations
One of the main complexities of payroll is that regulations always change. Most of the time, changes are minor. But they can still create problems if companies don’t keep up with the latest rules. Even though they don’t happen very often, major changes can be much more disruptive. An example is the General Data Protection Regulation (GDPR), a set of data protection laws that will affect the European Union. GDPR will impact any company doing business in the EU, as well as any company that processes data collected in the EU.
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Ensure Proper Compensation
|At its core, payroll software is exactly what the name implies: software to manage payroll. These systems handle attendance processing and salary rates to oversee the essential function of paying employees. Payment options make sure compensation is distributed in the way most suitable to the company and their workforce.|
Analyze Processes and Other Financial Matters
|Business intelligence features provide a data component to corporate payroll services. Companies can use the insights provided by payroll data analysis to make adjustments to salaries, bonuses and other pay-related decisions.|
Provide Employees Access to View and Manage Their Payroll Information
|Self-service capabilities are essential to today’s tech-savvy workforce. Employees want to be able to see their information without asking HR for assistance, saving time across the organization.|
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Basic Features & Functionality
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Advanced Features to Consider
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Like all software systems, payroll systems aren't just tools that companies can simply install and expect to solve all their problems. First, companies need to understand why they need systems and how it fits into their overall business strategy. Second, strategies and processes need to be translated into features and functions that can support them successfully. And finally, the technical infrastructure needs to be implemented in order for payroll applications to be deployed and maintained, ensuring it can seamlessly exchange data with other systems.
These three components of a payroll software selection initiative (strategic, functional and technical) should be implemented together for optimal results. The order in which these are performed also matters since functionality without strategy is meaningless. Technology can vary a lot depending on the functionality it supports.
Since payroll is so important for companies, there are many vendors that offer some kind of software. The main categories of software providers that offer payroll include software companies that focus exclusively on payroll (obviously), HR and HCM vendors that offer it either as a part of or in addition to their system, and ERP vendors that include a module in their offerings.
Questions to Ask Yourself
- What’s wrong with your current payroll system (if you have one)?
- If your business doesn’t currently use software, why are you interested in adopting a system?
- Which features are most important to your organization?
- Will your current infrastructure be responsive to adoption? If not, what changes should be made in preparation?
- What budget and time constraints do you have?
Questions to Ask Vendors
Once you have identified your short list of payroll companies, consider asking them the following questions:
- Does the system have mobile capabilities?
- Does the software include analytic functions?
- Is a core HR base included in the system?
- Is the system scalable?
- Does the system support compliance management and adapt to changing regulations?
RUN powered by ADP is a cloud-based payroll solution designed to meet the needs of small businesses (under 50 employees). ADP has other paid options for larger organizations. Basic capabilities, such as benefits administration and hiring, are available besides the payroll module. The vendor also offers professional services to help companies with taxes, benefits and insurance.
Paycom automates a variety of the core tasks necessary for managing and retaining talent. It helps businesses streamline their processes and relieve the burden of unnecessary paperwork, allowing managers to focus on tasks that cannot be automated. Cloud-based deployment provides access to features from any internet-connected device, enabling users to complete tasks even when they’re out of the office. It facilitates tasks such as benefits administration, reporting and more.
Paylocity is an all-in-one cloud payroll solution that enables organizations of every size to execute administrative tasks such as talent acquisition, time and labor management, and other core processes. Its functionality includes multiple configuration options that allow companies to customize according to their needs.It contains robust security measures such as encryption, real-time backups and secure data centers. It also has a user-friendly mobile app that is compatible with both iOS and Android devices.
Paychex provides payment processing, time-keeping and other general human resource software. They offer this to self-employed users, small businesses, medium business and large enterprise ventures. Buyers can choose from various pricing plans and payment options such as direct deposit, real-time transfers and same-day ACH. Most versions have some core HR management and pay processing functionalities.Based in the cloud, it assists with hiring, onboarding, tax filing, benefits management, business insurance, startup services and more. Users can customize it to meet their specific needs, adding only what they use. This allows administrators to ensure it fits their requirements, whether they be simple or complex.
Paychex Flex is a cloud-based compensation and HR solution that can serve thousands of employees. While there is a base version that mainly handles financials, it handles a wide range of functionality. Some of its capabilities include payment management, benefits, talent management, time clocks, attendance, workforce management and more.It’s a scalable option with unique versions for small, medium and large businesses. This serves groups of varying sizes including one to nine, 10 to 49 and 50 to thousands. It also has distinct roles for workers, managers or administrators. A winner of multiple industry awards, it saves time by making payments more efficiently, auto calculating taxes and staying up to date with current rates and compliance.
UltiPro, cloud-based HRIS software from Ultimate Software, brings together core HR, talent management and payroll into a unified HCM suite. Allows users different levels of access that can be customized based on business needs.In addition to these capabilities, the software is equipped with a robust set of business intelligence and predictive analytics tools. Powered by AI and machine learning, they provide data insights to drive intelligent decisions.
Gusto offers a web-based payroll system that meets the needs of small and medium-sized businesses. This vendor provides assistance with a variety of processing tasks such as payroll filing and direct deposit. Gusto also offers accounting and time-tracking integration options.This product features workers compensation, 401K and other HR tools to streamline all parts of the process. The system is also able to assist with tax filings. It enables users to check more than 50 states to assist with properly filing both state and federal taxes.
TriNet is a payroll and full-service HR solution used by small and medium-sized businesses. Users have access to human resources consulting, risk and compliance, benefits, payroll services and an employee and manager self-service portal.Some of its capabilities include tax calculation, benefits management, insurance, risk mitigation, reporting, expense management and more. The company has been in service for over 30 years, has more than 18,000 clients and employs 300,000 onsite workers. It’s also ESAC accredited and is classified as an official Certified Professional Employer Organization by the IRS.
Dayforce combines all major HR components into a cloud-based, unified HRMS. Suitable for smaller companies that need to manage over 100 employees to enterprises with thousands of employees, this program helps businesses tackle every aspect of the employee lifecycle. Companies can take advantage of professional services, payroll tax filing and standardized implementation processes via Dayforce Activate.
Zenefits is a cloud-based suite that provides integrated HR, payroll and benefits. It’s targeted at small businesses but can be used by organizations with up to 2,000 employees. Key features include time management, performance management, hiring and onboarding, and document management.Users can view the company’s structure via a dynamic org chart, which gives a real-time picture that shows changes to titles, contact info and other system updates. An employee directory centralizes information to facilitate easy collaboration.
Xero is an online accounting software designed to meet the needs of small businesses. The easy-to-use interface helps companies visualize their financial position and monitor performance based on real-time data. The solution is designed to connect businesses with third-party advisors and services in order to increase collaboration. This vendor offers a variety of integrations, making the platform capable of handling a variety of tasks associated with accounting.
Workday HCM is a SaaS solution that unifies all aspects of managing the employee lifecycle in a single HRMS. The suite of modules allows organizations to operate globally, run payroll, administer benefits, manage talent and facilitate learning, among other things.While designed for medium and large enterprises, the platform can support the needs of smaller businesses as well. A business process framework provides control for all internal processes. The software is also equipped with audit tools and built-in security capabilities, and it offers mobile apps for flexible access.
Kronos Workforce Central is a full-service suite designed to meet the needs of businesses of all sizes, regardless of industry. Based in the cloud, it is fully scalable — giving users the flexibility to use the most important functionalities on the go, no matter how big the organization grows. With its numerous capabilities, managers can automate and streamline many core HR tasks. It facilitates the management of an entire team, driving employee engagement and bolstering business processes.
Designed to meet the needs of small and medium-sized businesses, APS Payroll is a cloud-based solution for managing human resources. It provides features to help automate and streamline a variety of core HR tasks including processing payroll, tracking time and attendance, hiring the best talent, managing employee benefits, and creating analytic reports based on user data.Users can access their account from any internet-connected device to conveniently complete tasks. Built with scalability in mind, it’s able to grow with businesses. Additionally, each organization has access to a dedicated support team and account lead that can assist with tech support and field general assistance inquiries.
SurePayroll is a web-based solution suitable for small businesses with less than 100 employees. Paychex Inc. acquired the system in 2011, providing users with access to more resources than ever before.Users can choose from two versions of the software — one is suited for small businesses while the other is designed for the needs of individual households that employ a nanny or other caretakers. The full-service solution assists with managing benefits and workers’ compensation. The system can also help with processing pay, employee screening and more.
Justworks is a professional employer organization that helps businesses automate and streamline multiple administrative functions. By automating tasks such as payroll, benefits administration and reporting, it saves companies both time and money. Ensuring compliance and providing administrators with access to robust benefits options, it elevates traditional administrative practices and provides the support users need to make the most of its capabilities. Designed with small and medium-sized businesses in mind, it offers multiple pricing plans and can scale with the growth of any business.
Patriot Payroll is a full service software that offers a variety of integrative add-ons to users. The system’s core functions assist with core compensation tasks, while the add-on features enable the system to function as a full HR suite. This web-based solution processes earnings and calculates taxes automatically. It also offers assistance with set-up and makes support available to clients via multiple channels.
Namely is a cloud-based platform for mid-sized businesses. A suite of connected modules allows organizations to manage payroll, time and attendance, benefits, and talent. It comes equipped with additional features for general HR activities, such as document storage and management, customizable dashboards, and audit trails that help save time, configure employee profiles, track events and activities, and control access.
Fingercheck is a cloud-based human resources platform that streamlines hiring, time tracking and payroll tasks along with various other HR management tasks. Beneficial for users at all levels, it allows both employees and employers to streamline workflows. It helps automate payroll processes, connects time tracking, payroll and core HR functions, and automatically tracks and compiles relevant data.
OnPay is designed to address core payroll needs for small businesses and handles basic HR functions as well. It integrates with a variety of other HR systems to enhance HR processes that include time tracking, accounting, benefits and compliance software integrations.It requires no more than a few minutes to set up and features an easy-to-use interface. It also offers assistance with data migration for new users, making the transition even easier.
Square Payroll is a cloud-based solution that is suited for businesses of all sizes. The solution offers two pricing packages, one of which is designed specifically for organizations that only hire contractors. The solution offers features that assist with processing pay, filing taxes, employee self-service and more. The system assists with switching from an old system or provides assistance and resources to users who are processing pay for the first time.
ADP Vantage HCM, a cloud-based, on-premise and open architect solution, brings together core human resources services through integrated modules that help manage payroll, time and attendance, workforce management, talent management and more. It helps organizations of all sizes across the U.S. improve employee engagement and gain real-time insights to enhance workforce processes and workplace operations. It simplifies office administrative operations, minimizes risks, reduces expenses and provides dedicated guidance to enhance operational efficiency. Talent managers can streamline the onboarding process and synchronize performance with preset goals on a monthly and yearly basis. It also offers a mobile application.
BambooHR is an HRMS designed for small and medium-sized businesses, and provides solutions for organizations in all industries. Based in the cloud, it streamlines data collection throughout the employee lifecycle, warehousing relevant information in a centralized database to make it easily accessible for managers and individual employees. It facilitates hiring, onboarding, compensation administration, performance management, provides employee self-service capabilities and everything in-between. It allows organizations to make customizations, set multiple administrators and maintain inactive employees.
Sage Payroll is an HR system used by businesses of all sizes across all industries to process pay in-house. It streamlines tasks such as tallying hours worked, calculating tax and managing data. Its single platform approach lets users streamline their pay processes and ensure employees receive accurate paychecks at the end of each pay period. If you integrate with a full suite, users can automate a variety of tasks in relation to processing pay, including tasks like time and attendance tracking, benefits management and recruitment.
SuccessFactors combines a set of integrated products to form a complete suite for HCM. The HRIS system enables companies to execute basic human resource functions as well as expand to strategic initiatives and planning to remain competitive. Based in the cloud, uses technology such as AI and machine learning to solve pressing human resources demands. In addition, SAP offers consulting and professional services to help companies implement integrations, deploy HRMS software and more.
Viventium, a cloud-based HRM software for small and mid-sized organizations, enables talent managers, executive leaders and organizations to manage general human resources, payroll, recruitment, time and attendance. It offers flexibility, expert guidance, easy customization and usage, and other facilities to aid HCM needs. Employers can track employee data, run mock audits, create custom action plans, save employment data, run data analysis, develop employee surveys, accept or reject leave requests, add essential candidate information to dedicated profiles and more.
SyncHR is a comprehensive HCM platform that delivers benefits, payroll, time and attendance, talent management, and core human resource management capabilities to mid-market companies. The cloud-based human resource management software automates common tasks and can integrate with other business systems to provide real-time insights across an organization.
Wagepoint is an online payroll solution that tracks and manages income. Designed for small businesses, it can compensate salaried, hourly or contracted workers. Users have easy access to W2s and pay stubs, even after termination. It also handles new hires, multiple forms of payment, direct deposit, extra income, tax forms and more.
PrismHR offers flexible, customizable and efficient solutions to support the comprehensive payroll, benefits and HR management requirements of small businesses and HR service providers. It provides assistive capabilities through the six key modules: platform, payroll, talent, time, employee portal and benefits. Its marketplace offerings include tools for financial wellness, identity protection, time and attendance, voluntary insurance, compliance, consulting services, taxes and more. These add-on capabilities are pre-integrated and give HR providers validated connections.
The PeopleStrategy suite enables small and medium-sized businesses to manage all aspects of human resources from one cloud-based platform. Its modules cover core requirements (performance, comp planning, onboarding), workforce management, payroll, benefits administration and talent acquisition. Capabilities include applicant tracking, self-service, analytics and reporting. It automates many parts of the administration process and stores information in a single database to eliminate double data entry.
Payroll by Wave is a web-based, best-of-breed system built with small companies of 10 employees or less in mind. A simple, paperless solution to help pay workers and the government accurately and on-time, setup can be completed in just 10- to 15-minutes
ZenHR is a cloud-based HRMS that is specifically designed to serve everyone from SME to Enterprise customers in the MENA market. Completely localized to the MENA market, including all labor laws, expat regulations, and social security tax laws.
WebHR is a full-service, cloud-based HRIS system with payroll capabilities. It standardizes, manages and automates recruitment, hiring, payment and more. Through it, administrators and employees alike can complete enrollment, onboarding, benefits, background checks, attendance and more.Serving over 25,000 companies and around 200 countries, there’s a free version with limited functions that serve five or fewer users. For regular, paid subscriptions, it can support up to 1000 workers. It uses AI to streamline the entire process.
Offered by PDS, Vista's unified suite allows mid-sized and large organizations to address every stage of the employee lifecycle. It specifically serves companies in the U.S. and Canada. Included modules encompass core HR, payroll, benefits, recruiting, self-service, time and attendance, analytics, workflows, and reporting.Companies can choose between onsite and cloud deployment using a SaaS model. On-premise installation includes the option to have your data backed up by PDS via a secure data center for disaster recovery purposes.
Engineered for small businesses, CheckMark Payroll software for Macintosh and Windows is a comprehensive solution for small business owners, accountants, and payroll professionals. Our program is packed with high-end features including direct deposit, MICR encoding blank check stock printing and you can process as many payrolls as you want for all of your employees and companies for one low price.Use it as a stand-alone program, or import your payroll information to most popular accounting systems, including CheckMark's own MultiLedger.Up-to-date Federal and State tax withholding tables and printable IRS forms are included, and there are NO monthly fees. Processing your payroll in-house will save you money and keep employee and payroll records safe and secure. Download our CheckMark Payroll software free trial and check it out for yourself! Calculate payroll, print payroll checks, and pay employer taxes in just a few minutes. Satisfaction guaranteed!
Dominion Systems is a SaaS product that offers payroll, time and attendance, and human resources services. It manages everything from conducting performance reviews to maintaining compliance to simplifying open enrollment. Equipped with insights and reports, it helps businesses make strategic and data-driven decisions. Mobile capability lets users complete tasks on the go, at any time.
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