How you compensate your staff goes a long way at determining their motivational level, which in turn affects your business’ productivity. When you pay your workers on time they are inspired to do more.
Human resource in this era is the most valuable asset an organization can have. “Low job satisfaction can result in costly turnover, absenteeism, tardiness, and even poor mental health”. (Hellriegel and Slocum, 2007).
Without sustained motivation and morale of the employees, organizations risks losing invaluable employees which is a disadvantage to the business’ growth and profitability (Dessler, 2003).
Despite this common notion, a lot of small businesses still fall short at paying their staff on time due to a number of reasons. For the purpose of this article, we will be focusing on one independent factor which is the lack of efficiency in organizations’ payroll management system.
Based on a survey carried out by Advans Nigeria, 5 out of 10 MSMEs still pay their staff salaries by hand while the rest use direct transfers. If Nigeria must continue to develop as a nation, it starts with the organizational microcosms. Inefficient staff payment systems are inimical to the growth of businesses, as they could lead to pilfering and high employee turnover. Factors that constitute to these inefficiencies include:
- Manual Procedures: Manually computing your staff salaries, benefits, deductions and bonuses can be highly tedious. This can be time-wasting and also prone to errors. These can lead to over or underpayment of staff which in turn leads to unnecessary staff conflicts.
- Not staying abreast of changes in labor laws: In a majority of small businesses, practically all administrative functions are carried out by one or a few individuals, in order to save cost. As a result, staying updated with information on taxes, tax relief benefits and other vital information could constitute an extra burden and as we all know, ignorance of the law is not an excuse. Many organizations have folded up due to non-compliance of labor laws.
- Improper record – keeping: When an organized remuneration system is not in place, this error is bound to occur. Record keeping and reporting of employee remuneration is a legal obligation in Nigeria today especially for tax purposes. Asides from this, it is also important in staff planning, monitoring and comparison of employee productivity levels. Having this in place also provides a form of evidence to the contractual agreement that exists between an employer and an employee.
In the light of this information, it is quite certain that these lapses in payroll management practices should not be trivialized. How then can we mitigate these inefficiencies and bring about a healthy and more favorable method of staff payments?
One way will be to onboard an efficient payroll management system, such as the Advans Payroll System which provides an ample solution to these setbacks. With this Payroll management system, employers do not have to worry as it creates a fast and seamless way to paying workers without being involved in the actual process. Benefits of this system include:
- Effective and efficient staff remuneration with no recurrent transfer fees.
- The system is less prone to errors, therefore reducing issues of over or underpayment.
- Provides easy access to loan facilities for both the employer and employee, at very low interest rates thereby easing financial burden.
- Ensures timely payment to sustain employee productivity levels.
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