What are HR and Payroll Services?

Human Resources and Payroll Services

HR and payroll services are ubiquitous throughout organizations, but what do they encompass? The complete components can vary among different companies, depending on how comprehensive the company’s services are. 

In its simplest form, payroll usually refers to employee compensation, as in the processes in place to ensure all employees are paid for their work. Human resources (HR), as you might expect, can cover a range of services, from recruitment and onboarding to annual reviews and 401(k).

To help run payroll effectively and efficiently, many companies rely on HR and payroll software to handle these services. A unified solution for HR and payroll services can save an organization time, money, and resources by digitizing many routines. 

It’s important to note that HR and payroll software is not meant to replace essential HR staff members, but rather is designed to simplify HR-related responsibilities so all employees can spend more time focusing on important projects, instead of getting tied up by basic tasks (filling out forms, punching in, etc.)

Why is HR payroll important?

HR payroll is critical to business success as it directly impacts every employee within an organization. Ensuring accurate and timely payroll processing is not only a legal and ethical obligation, but also contributes significantly to employee satisfaction and morale. The seamless execution of HR payroll can also help organizations drive:

Employee retention

While it might seem like table stakes, paying employees accurately and on time is one of the best ways to keep them happy. Stable and accurate payments foster employee trust, but just one or two payroll errors can ruin your business’ reputation and prompt employees to consider leaving your company. An HR payroll provider can help your business automate processes to reduce discrepancies and catch errors before processing payments, ensuring accurate and timely payments for your employees.

Compliance

Failing to meet payroll tax obligations and employment laws can result in substantial fines for your business. Using an experienced payroll provider can help your organization mitigate payroll risks by ensuring your business calculates employee wages and taxes correctly, meets tax filing deadlines, and follows federal and state labor laws. Since compliance can evolve in complexity as your business grows, an experienced HR payroll solution can be a valuable partner.

Financial stability

Labor costs are often the largest business expense, so your business will want to keep an eye on them for effective financial planning. Accurate HR payroll processing allows businesses to budget efficiently and prevent unexpected financial strains. This data is essential for analyzing organizational costs, making strategic financial decisions, and assembling accurate financial statements and forecasts. Most HR payroll providers offer detailed reporting so businesses can remain informed of labor costs and make better financial decisions.

How does HR process payroll?

Running a seamless and accurate payroll cycle involves quite a few steps. HR and finance teams must gather employee time cards, calculate employee earnings and taxes, subtract any deductions (like wage garnishments, 401(k) contributions, healthcare allocations, etc.), file payroll taxes, and deliver payment — for every pay period.

While all of these values can all be tracked and calculated manually, using an HR payroll provider can help businesses automate data transfers and ensure information is accurate and up-to-date. For example, if an employee increases their 401(k) contribution percentage, this information can be fed directly into your payroll software without human intervention. This can reduce manual errors and ensure the employee’s paycheck reflects their new increased savings rate.

UKG Pro

UKG’s human resource software, UKG Pro® is engaging, easy to use, and engineered with multiple generations in mind. From hire to retire, UKG Pro simplifies HR so employees can focus on what they do best each day, instead of spending valuable hours filling out mounds of forms or worrying whether they’ll get paid on time. Plus, UKG Pro offers features such as comprehensive performance analytics so managers always know who’s high-performing or even at high risk of leaving.

More HR and Payroll Services Resources

Just because people are complex doesn’t mean HR software has to be. To learn more about how UKG Pro can simplify HR, check out our HR Solutions page.