Tag Archives: Payroll

Today’s Top Compensation Trends

Although some organizations may cut jobs or reduce hiring as economic growth slows, some are paying higher employee wages to keep and win top talent. More than ever, compensation is top of mind for employers and employees alike. Today, workers can demand higher pay and better benefits as many employers face a worker shortage and struggle with employee attraction and retention. The latest compensation trends aren’t just about wage increases, but also workers wanting to get paid differently, be compensated based on their work, and receive more pay transparency.

Organizations are facing evolving talent challenges. The COVID-19 pandemic has given workers time to reflect on their jobs and consider opportunities with a fresh perspective. On top of that, both employers and employees are feeling the financial strain of record-high inflation. When employees feel adequately compensated for their job, they’re more motivated to give it their all. Proper compensation demonstrates to employees that they’re valued as workers and humans. This article explores today’s top compensation trends and how employers can best compete in the labor market looking ahead to 2023.

1. Salary Hikes

The reality of the current labor market is that there are more open jobs than people to fill them, and inflation is impacting employees’ pay expectations. As a result, salary budgets for American employees are projected to increase in 2023. According to Willis Towers Watson’s
July report, companies are budgeting an overall average increase of 4.1% for 2023, compared with the average actual 4% increase in 2022. Keep in mind that these are the most significant increases since 2008. Forty-six percent of respondents said the top reason pay budgets are increasing next year is based on employee expectations for higher pay.

These percentages don’t account for inflation, so pay bumps likely haven’t helped workers much. While employers are exploring more competitive compensation strategies, wage raises still lag behind the current rate of inflation.

2. Variable Pay

Generally, pay is categorized as “variable” when a substantial proportion of an employee’s compensation changes from time to time, rather than being set at a fixed hourly or salary rate. For example, some compensation plans may have a less substantial base pay—allowing employees to earn a high percentage of their total compensation via variable pay, such as sales commission or earnings based on performance. Likewise, others use variable pay for a very small proportion of an employee’s total rewards, such as an expected bonus at the end of the year.

When utilized effectively, these incentives can boost motivation. Organizations also sometimes leverage these structures to retain flexibility and adaptability—particularly in uncertain economic environments. If the business does well, more compensation can be shared with employees, while allowing the ability to avoid excess pay if profits are down.

3. On-Demand Pay

The traditional weekly or biweekly concept of “payday” is ingrained in many workplaces. However, some employers are exploring ways to pay their workers faster, especially those in industries that provide hourly wages or have high turnover rates (e.g., retail, hospitality, manufacturing and health care). On-demand pay allows employees to be paid as soon as they’ve earned their wages. Americans are facing rising costs for everyday essentials, health care, and other emergencies. Because of these increasing financial burdens, employers are considering how they can provide employees with faster access to their earnings.

Employers may use bank account direct deposits or prepaid debit cards to pay employees instantly. The ability to be paid sooner can be valuable and potentially provide additional organizational benefits, such as increased attraction and retention levels.

4. Raises

Raises are in the spotlight as many workers change jobs or careers. According to a new ADP report analyzing payroll data, workers who changed jobs got a median raise of 16.1%. Interestingly, according to the same report, that’s nearly double the median change (7.6%) in yearly pay for those who stayed in their jobs. Job hopping has proven to be a way employees can compete with increasing costs amid inflation and be better positioned to afford everyday life. To compete, organizations are finding ways to offer raises to match the pay increases of employees’ counterparts leaving for other, higher-paying opportunities.

5. Pay Transparency

Pay transparency is another hot topic. Today’s workers want to know what they’ll be paid before interviewing and that they’re being compensated fairly compared to their colleagues. Workers also want to clearly understand their career development potential, as many are interested in professional growth opportunities.

Some large states, most recently California, have passed pay transparency requirements. For example, some states require organizations to disclose salary in job postings, but others require it only upon request. The goal is to promote more equitable pay regardless of specific details. Although conditions can vary, many municipalities and states are poised to join the growing nationwide pay transparency movement. As a result, many U.S. employers feel pressured to provide salary information even when they are not legally required to do so. This pressure has been compounded by the increase in companies, such as Indeed.com and Glassdoor Inc., posting pay estimates and data for job postings that can often be inaccurate.

6. Well-Being Perks

As many workers reconsider their jobs they may also look to take better care of themselves physically and mentally. Today’s employees seek work-life balance and resources to care for themselves and their families. Although many organizations have expanded their employee assistance programs, mental wellness goes beyond access to care. Employers can consider how employees are treated in the workplace and find ways to help reduce burnout. Some employers are offering mental health days and flexible working options to help employees take control of their workday.

7. Increased Minimum Wage

For years, states have been pushing their minimum wage above the federal minimum rate of $7.25 an hour. When both the state rate and federal rates apply, employers must pay their employees the higher of the two rates. This can also be true of local ordinances for minimum wage—which can be even higher.

Summary

As businesses and individuals continue to navigate high inflation and other financial challenges, compensation will remain a top deciding factor for workers. As employees reconsider their jobs and careers, total compensation can be the item that piques their attention.

Organizations will likely continue to compete for top talent—local, hybrid and remote—and compensation could be the differentiator. Reach out to us for additional resources.

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Year-End Payroll Doesn’t Have to Be a Mess

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Your year-end payroll doesn’t have to be a crunch.

Most Payroll and accounting departments are overwhelmed at year-end — there’s so much to get done and your team might already be stressed going into the holiday season. We think approaching your year-end early can help you be sure that you complete all of the important tasks, leading to a great Payroll close out. Here are our quick tips for a year-end Payroll that doesn’t stress everyone out:

1. Make sure you have all the right information.

A good start is to review all of your employees, and make sure that you have every thing needed for year and filing – addresses updated as well.

2. Keep the right things on your radar.

There is a host of issues you want to consider before year end including but not limited to:

Bonuses
Sick pay PTO payout
Personal use a company cars
Group term insurance in excess of 50,000
Maximums for retirement plans
consider any other taxable fringe benefits
Transportation, or moving expenses that are taxable

3. Get retirement plan discussions out of the way early.

Don’t forget partner and owners. Many of them may want to take salaries in order to max out retirement plans opportunities. Be sure to discuss this with your CPA or administrator early to avoid any confusion.

4. Get started now.

A well thought through year-end plan that starts in early December will help you avoid the payroll crunch of the last week of the year when most payroll companies are overwhelmed and many are on vacation.

Need more tips? Check out our blog post:

7 Tips for Smooth Year-End Payroll Processing 2022:

If you need help with your year-end Payroll, give us a call. We’d love to help.

7 Tips for Smooth Year-End Payroll Processing 2022

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We’re rounding the corner to the last few weeks of the year. Don’t leave your Year-End Payroll to the last minute. Even if you’re a Year-End Payroll veteran, it can still be easy to overlook crucial steps. Sitting idle could be a big mistake, make sure you take action.

What is Year-End Payroll?

Year-End Payroll involves a careful review and verification of all your financial information during the fourth quarter of the calendar year through the first quarter of the following year. Businesses are responsible for Year-End Payroll

Year-end processing ensures your company’s Payroll and taxes are compliant with current federal, state, and local regulations. If your organization isn’t compliant, it can lose money to fees and regulatory costs. Therefore, actively participating in Year-End Payroll processing saves you from future headaches and your organization loss in revenue.

As you close out your Payroll activities and set compensation and benefits for 2023, contact CorpStrat Payroll for a comprehensive check list to help you stay on track. To give you an idea, here are our top year end Payroll information to prepare and decisions to make:

1. Verify Tax Form Information

To reduce the possibility of printing W-2s/1099s with incorrect information, and to avoid penalties for missing or invalid data, please take the time to verify your employees’ critical information. Make sure the employee’s name matches their social security number, that their mailing addresses are up to date, and that the employee is coded to the correct state and local tax jurisdiction.

2. Review Employee Data During Open Enrollment

During this time, it is crucial to verify that employee deductions have been updated to payroll once open enrollment closes. If you are utilizing our benefits solution, we have several reports available to assist you in comparing your data. Regardless of your renewal date, year-end is a great time to review all employee pay data, including deductions. Please contact payroll@corpstrat.com if you find any discrepancies.

3. Set-up Bonus Payrolls

If you are planning a bonus payroll this year, please email payroll@corpstrat.com as we will be able to help you determine when you should submit your payroll based upon the total amount of the payroll and the check date. It is always best if you can submit your bonus payroll at least 5 days BEFORE the check date to ensure timely processing of direct deposits and taxes.

4. Add Fringe Benefits

Don’t forget to record any taxable fringe benefits by the end of the year. Email Payroll@corpstrat.com and we can answer any questions you have on this topic.

5. ACA Reporting

Employers with 50 or more full-time equivalents (FTE) are required to complete the mandatory ACA reporting using IRS forms 1094-c and 1095-C. Are you prepared? Remember that 12/23 is the deadline to provide us with this information.

6. Submit Year End Form Amendments, Changes, and Reprints

1/03/2022 by 12 PM PST is the last day to submit 2021 adjustments to ensure accurate filings. Any 2022 adjustment requested after 01/03/2022 will be subject to amendment billing. Please send any questions to payroll@corpstrat.com.

7. Be Aware of Changes Going Into 2023

From Minimum Wage increases to changes in HSA Contribution Limits, so many things are changing in 2023. Contact your CorpStrat Payroll representative to make sure you avoid costly mistakes by missing any of these key changes.

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This is just the tip of the iceberg. If there’s something you’re not sure about, reach out to your CorpStrat Payroll account manager or email us at marketing@corpstrat.com

Round out your Benefits by bringing in HR & Payroll. Here’s why.

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Open Enrollment is just around the corner and it seems like every company is trying to get their hands in your pocket. Whether it’s Payroll companies, software companies, retirement companies, plan vendors, or companies like ADP and Paychex, everyone has a “better solution” that they want to sell you. Upon closer examination, these “better solutions” all lack a piece that is generally critical to your business.

What if there was one place where you could manage it all: your “people” business processes, Employee Benefits, and Human Resources?

That’s where CorpStrat comes in. We can help you streamline your Employee Benefits, Human Resources, and Payroll to one location to make your life easier. Streamlining is an extremely effective tool that we believe will help simplify your life.

Here are some benefits of bringing your HR and Payroll into your Employee Benefits:

1. Personalized support.

No more wasting an entire day calling multiple companies and STILL not getting the answer you need. By streamlining your HR and Payroll into your Benefits, you call one number and reach someone who knows and cares about your business. Also we have a variety of experts on our team, from insurance to Human Resources, to Employee Benefits.

2. A comprehensive approach to your Benefits.

No more expensive piecemeal solutions that all don’t do what you actually need. We’ll help manage all the complexity and ensure compliance so you don’t have to stress.

3. Benchmarking gives you complete confidence.

Your CorpStrat advisor is working with hundreds of other employers so they know exactly what’s happening in the marketplace. You get real-time benchmarking, not last years’ assessment, so you know you’re being presented with the best options.

4. Cutting edge products.

We are in the trenches with carriers and underwriters daily. This means we’re constantly gaining insights into the best ways to use and design plans, which helps us deliver the best, custom plan for you and your team.

5. Coordinated approach to growing your business.

At CorpStrat, we’re not just passive participants. We strive to be a part of your advisory team and seek to collaborate with your professional advisory team, especially when there are tax or legal aspects to address.

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If you don’t currently work with us on Benefits or Payroll and you are still dangerously using Google to find HR answers, reach out to us. What we are offering could potentially help save you money, time, and make your business more effective. We take pride in being hands-on, non-call-center partners that are committed to helping employers manage their most important assets: their people.

Email us at marketing@corpstrat.com today.

7 Key Benefits of Automated Payroll

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When your HR team is all tied up with number crunching week to week and manually running payroll, they don’t have as much bandwidth to focus on important responsibilities like hiring, employee relations, and training and development. Having automated Payroll set up is a huge win for your HR department and here are a few reasons why:

1. Reduces Errors

Many outdated systems require Payroll managers to migrate data from one platform to another leaving opportunities for human and programatic error. Our Workforce Ready system features a single database which means real-time updates and no syncing, ensuring Payroll is always on time and accurate.

2. Save Time

With automated Payroll, managers no longer have to run around wrangling timesheets, double checking approved time off, or submit corrections. With Workforce Ready, managers can run Payroll quickly, saving 3-5 hours per week.

3. Geofencing Capabilities

With outdated Payroll systems, many times employers were limited by location and relied on an honor system. With our automated Payroll system, Geofencing gives employees the opportunity to clock in from within a certain distance of a work site and offers employers deeper knowledge into the exact hours their employees are working—all of which lead to more efficient and accurate Payroll.

4. Increased Security

Security is a huge concern when you’re managing valuable employee and company information. With an automated Payroll system, your data is encrypted and password protected so it’s only accessible to your team.

5. Makes Taxes a Piece of Cake

Gone are the days of number crunching, referencing various spreadsheets, and pulling out your hair trying to understand confusing new tax rules. With an automated Payroll system, you never have to worry about being compliant with new tax rules because the system is constantly being updated to reflect current tax policies. Also, tax withholdings are automatically calculated for each individual employee so you can rest assured that everything is filed correctly and on time.

6. Easy Reporting

When it comes to Payroll, we think the more data you have the better. The deeper insight you can have into how your workforce is performing, the better you can make informed decisions for your team. With automated Payroll, you can easily download beautifully designed reports that give you both a birds eye and granular view of your Payroll, which will help you make more strategic labor cost decisions.

7. Self-Service Employee Portals

One of the biggest headaches for HR Departments is having to chase down employees for signed time-sheets or documents. Automated Payroll takes this stressor away immediately by offering each individual employee their own login credentials and dashboard. Through their self-service portal, team members can make updates to their information, sign time-sheets and documents, access documents, and so much more.

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Curious about automating your organization’s Payroll? Let’s talk. Give us a call at 818.377.7260 or email us at marketing@corpstrat.com