Business has changed. Inflation is at an all-time high. Unemployment is at historically low rates. Businesses are finally starting to bounce back from Covid. Many companies have adopted hybrid working models. In a climate of uncontrollable economic juxtapositions alongside soaring compliance and new HR regulations, what will employers need from their partners in 2023?
Many companies will evaluate their back office payroll + HR partners to help meet the new demands for people technology, mitigate the risk of ever-evolving people compliance, and trim costs related to payroll processing, tax filing, insurance, and benefits administration.
If you haven’t evaluated your partner in the last two years, you’re missing out on valuable expertise and technology updates. After all, many HR companies adapted to provide new offerings to meet the technology needs of their clients’ completely remote or hybrid workforces during the pandemic.
As we mentioned, hybrid workforces are the norm, and remote work is rising. In fact, The Pulse of the American Worker Survey found that 87% of people want to work from home at least one day a week. 68% of American workers say the ability to work remotely and on-site is the perfect work model.
As we head into budget season for 2023, here are four key trends to be on the look for as you begin your search for a new partner.
Payroll Provider Trend #1: Bundled Tech Features & Service Options
We all know having employees is expensive. When you factor in health benefits, retirement options, and the administrative burdens around these benefits, having just one employee can get expensive in a hurry, and we haven’t even talked about their wages!
All of these benefits must be tracked, updated, and paid out every pay period, which is great news if you have a single tech solution that is updating information when changes are made. That said, it’s a nightmare when you have to manage and reconcile those plans in multiple systems. (Not to mention you end up working with several different partners for retirement, benefits, hr, and tech needs.)
That’s why employers in 2023 will look to their payroll companies to take over more compliance and administration for benefit packages. They will look to bundle these services. It takes the guesswork out of manual calculations and relieves you of the burden of being a benefit, retirement, and HR expert. Most importantly, it enables employers to manage cash flow better through incentives like pay-as-you-go workers’ compensation and automated 401k retirement contributions.
Employers in 2023 will search for PEO options, ASO options, or bundled service packages that include outsourced HR services, payroll, and payroll tax filings, and insurance benefits like workers comp, professional liability, medical benefits, and 401k plan options for employees.
By combining these services, employers put the burden of plan compliance, testing, and administration on their payroll company and will receive deep discounts for bundled service packages. Mitigating risk and lowering overhead costs will be critical as the economy turns forward in 2023.
Payroll Provider Trend # 2: Industry and Multi-State Compliance
In addition to wanting a comprehensive ecosystem for managing employees and bundled insurance offerings, employers in 2023 will expect their payroll companies to understand their industry and unique organizational needs.
Does your payroll company have expertise in your job costing rules, and unique PTO policies by department and classes in your organization? Do they understand how your G/L reports should be set up and why that matters for your cost report? Or why you have legal roll up entities and employees by locations?
Do you have prevailing wage requirements, run certified payrolls, or have a lot of 1099s in addition to your w2s?
Although most payroll companies work with a variety of businesses, covid government programs like PPP and ERC showed us which companies were proactive in learning new regulations and which ones were not. It also showed us which companies had the ability to handle complicated multi-state compliance as employers shifted to fully remote and hybrid work environments and hit nexus and needed new tax filings to be done in states that hadn’t previously done business in.
Now, more than ever before, companies in 2023 will desire a payroll company and support team who has worked in their industry, understands their unique organization, their shift differentials and bonus options, and will want advice for developing sophisticated compensation packages to compete for good talent in a historically low unemployment rate job market.
Employers in 2023 will need their payroll team to know their industry and handle the complexities of multi-state, multi-layered, fast growing companies.
Payroll Provider Trend #3: More Convenient Tech Features
As we’ve discussed already, our company needs changed drastically over COVID. As many companies pivoted to remote and hybrid options, employers needed ways to onboard new hires seamlessly, connect and engage remote teams, and build team culture through screens.
Some industries competed for workers by offering staff substantial sign-on bonuses and revolutionary daily pay options.
As professional needs shifted, many employers found their internal HCM systems lacking in mobile interfacing, employee self-servicing options for check stubs, PTO, and withholding updates, keeping track of employee documents and assets digitally, and learning management platforms to train and develop hybrid teams.
Other employers looked for mass communication tools, expense management tools, daily feedback and check-in platforms for on the go or burnt-out health staff.
Although the pandemic has thankfully lessened in severity, work has not gone back to pre-pandemic experiences and likely never will.
That’s why employers in 2023 will expect payroll companies to roll out new features to meet the demands of a new emerging workforce that simply don’t need to stop by the HR office anymore.
Payroll Provider Trend #4: Better Back of House Customer Experience
This is one of the most important things to consider when choosing any business partner. You want someone who will be there for you when issues arise, whether it’s a simple question or something more complex.
This is an underrated point because every single person defines customer service differently, but through the pandemic, many payroll companies sent their support staff home which led to increased hold times, voicemails, and delayed resolution to time-sensitive and urgent payroll needs for their clients.
Some payroll companies outsourced their support altogether and forced clients to go through multi-button call queues and automated chat supports which caused enormous frustration for loyal, long-term clients.
Customer support teams reeled from inadequate tech set up and many clients felt the brunt of managing the beast without customer service. Employers will be asking questions like, will I have a dedicated point of contact for my company? How often does that person turnover? Do I have 24/7 support, phone, chat, or email support only? The quick answer is that everyone is a little different in executing their plan.
Some employers are DIY experts and will prefer self-help tutorials and a fully automated tech support system in place. Others will favor a high touch, highly personal approach with their support team who they can talk to anytime they have a question or need.
Whatever your support preference, employers will evaluate Google reviews, SLA stats, net promoter scores and response times from any payroll company then are evaluating to ensure a positive customer experience.
In conclusion, if you haven’t evaluated your payroll and HR partner over the last two years of the pandemic, it’s definitely time for a business review. Considering Whirks? Check out our 2023 Pricing Guide to see how we stack up against other providers.