The Impact of COVID-19 on Payroll

The Impact of COVID-19 on Payroll
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Not a single branch of business has remained unaffected by the pandemic, as more companies emerge with innovative ways to curb their losses and restore their success. Reconciling with the fact that things cannot simply go back to what they used to be is half the battle, but companies also need to find ways to prevent similar losses in the future and to recognize new solutions to the ongoing crisis. One particularly sensitive segment of running a business is payroll.

Although every possible aspect of business finance will indeed have to adapt, ensuring timely employee payments in a manner that helps them respect the new social distancing rules is vital. Without further ado, let’s tackle a few most noticeable ways in which payroll will change due to the pandemic, and how your business can readily adapt not just for the next few months, but for the years that lie ahead.

Different priorities during the crisis

This is the moment when CEOs and every executive-level employee is actively taking a stand by retaining the same salary at the expense of their employees, or by foregoing their paycheck in favour of their workforce. In all fairness, not every CEO can afford to completely repurpose their salary and reallocate the funds to their employees, but smarter payroll allocation is a possibility for business of all scopes and sizes.

This could be the decisive move that will allow you to keep all employees on pay, which is why more companies are doing just that. Combining such a bold move with emergency funding from the governments, each company has a chance to outlast the pandemic.

Turning to greater automation

The one main solution to various business issues revolves around transitioning towards remote work. More social distancing and less face-to-face interaction should extend to your payroll, which is why more businesses are turning to automation. Businesses are now integrating personalized payroll cards for their employees with their automated payroll systems to enable recurring monthly payments with fewer expenses and lower fees.

Plus, without checks or having to go to the bank, the employee will have even less interaction during the pandemic, and reduce the risk of pathogen transmission. This is a time-saving and cost-cutting solution even for the post-pandemic state of affairs, so more brands are now relying on automation to keep them solvent and their employees safe.

Smarter ways to plan for emergencies 

The naysayers will always reject the idea that some health experts have shared their concerns regarding a potential pandemic and their validity. Now that we see the full scale of the pandemic’s impact, more companies wish to know if anything could have been done to prevent such catastrophic financial losses.

On one end of the spectrum, we hope to have a future in which experts will be able to educate the public in time and prevent economic and health disasters of this magnitude. On the other, businesses are now learning of the relevance of preemptive emergency funds to keep them afloat for several months at a time should anything similar occur. Some governments might not have the funds needed to keep every small business alive, hence the need to brace your payroll for similar occurrences.

Using the cloud for data storage

Once you automate payroll, you cannot possibly stay stuck with your paper filing system when it comes to employee contracts and other vital client data. That said, your entire business needs to be moved to the cloud if you haven’t done that already. Switching to the cloud, or purchasing an enterprise-level cloud solution might not seem like a valid option now, but once you see the costs of retaining your old filing system, you’ll know that a monthly retainer fee comes at a small price to pay.

Cloud storage for your sensitive employee data and your entire HR process helps not just continue with the same process of automation but also cuts the time your accounting experts need to spend on various processes. Plus, the built-in security features of the cloud are infinitely safer than traditional filing solutions for any modern-day business.

Cutting expenses at every turn

Some businesses have had to make cuts and let entire departments go. Others have had to close their doors completely. There are those, however, that have managed to reform the way they do business and allocate funds on a day-to-day basis to the benefit of their employees. For example, working remotely has enabled smaller companies to completely abandon their rented office space and instantly reduce their expenditure by eliminating rent and utilities, as well as office supplies.

These moves might not be ideal in the long run, but they provide some leeway for companies in financial distress to retain their workforce and pay them regularly. For many new companies, this is a worthy lesson in planning for emergency situations so as not to be forced to make such drastic cuts to begin with.

This is merely a glimpse into the post-pandemic world where businesses will recuperate one day at a time, and hopefully, with plenty of government assistance and guidance. In the meantime, you can use this information to fuel your own strategy and reduce the financial burden on your company, so that you can recover more easily in the months to come.

The Impact of COVID-19 on Payroll
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