Top 3 Payroll Pain Points for Staffing Firms—and How to Prevent Them 

More than ever, your people depend on their paychecks. Between inflation and growing economic uncertainty, your temporary workers need to know that they can count on you. Ensuring a smooth payroll process is one of the best ways you can support your employees.

That said, your chief focus is probably recruiting and retention—not payroll. But to a large degree, the former depends on the latter. According to the SIA’s latest temporary worker survey (registration required), when it comes to choosing a staffing agency, workers’ No. 1 priority—by a landslide—is compensation.  

It’s not just how much you pay, but how efficiently and accurately. Nothing alienates workers faster than late or incorrect paychecks. In staffing, delivering prompt, accurate payroll should be a key component of any recruiting and retention strategy. It can even help drive those increasingly-important employee referrals!  

Payroll Problems Are No Small Problems

Sound, dependable payroll is the foundation of a healthy employment relationship. 

Still, processing payroll is especially tricky for staffing agencies. For one thing, your workforce is in constant flux, with rosters, pay rates and assignments changing daily. For another, few payroll software solutions are designed to handle so many moving parts. 

As one agency owner told PrismHR, “Plenty of companies provide payroll services—but staffing is very nuanced.” They added, “And if you don’t understand it, I don’t want to have to teach it to you.” 

Fortunately, there is some great payroll technology available for staffing, and it’s designed to ease your top pain points—including these:

1. Flexibility to Work the Way You Do 

Fact: You can’t process payroll without calculating payroll taxes. 

Federal taxes. State taxes. Ever-shifting local taxes. The permutations are seemingly infinite, since contractors may be working in different jurisdictions from day to day. And, of course, taxes must be withheld in a specific order.

One payroll manager told PrismHR, “Some of our employees work at several work sites during a single week, but our payroll system can’t apply taxes for multiple locations in one pay period.”

“That means we need to do it manually—and it’s a lot of work.”

Not only is that hours of extra labor, but also it increases the risk of human error.  

Adding insult to injury: Some payroll vendors don’t update their tax data often, creating potential noncompliance events. 

Here’s the thing: There are cutting-edge payroll solutions out there—ones with continuously updated compliance engines and the flexibility to keep pace with changing local tax rates. Why tempt noncompliance when you don’t have to take that risk?  

2. Weak System Integration Affects the Entire Organization 

According to Bullhorn’s 2022 Recruitment Industry Trends Report, 49% of staffing firms are increasing their tech investments now. And they should: According to that same survey, agencies with digital transformation strategies were more likely to report 2021 revenue gains and anticipated growth in 2022. 

In fact, per Bullhorn, digital transformation is the industry’s second highest priority right after candidate acquisition. 

But here’s the rub. Whenever an agency upgrades one software application, there’s a risk that it won’t fully integrate with its other HR apps—and that can create the need for manual workarounds that defeats the whole point.  

Payroll software doesn’t operate in a vacuum; it needs to seamlessly access data from HR management, time and attendance, and benefits software. 

Seamless system integration offers many benefits. It saves time (no duplicate data entry needed), improves accuracy (no inconsistencies from app to app) and reduces errors—all which translate to improved labor costs.   

So, it’s not enough to choose great payroll software. You also need software with a robust Application Program Interface (API)—and a provider that will ensure a smooth, complete integration. 

3. Find a Vendor That Can Support You

Recently, the Global Payroll Management Institute surveyed employers about what they prized—and loathed—about their payroll suppliers. Nearly 45% ranked poor customer service as a major shortcoming.

Or as one staffing payroll professional told PrismHR, “Half the time when I call the support line, I know more than the technician on the other end of the phone.”

“Then, I have to call multiple times until I get someone who can actually help me.”

Poor customer service affects workers, too, when they can’t easily get answers to basic payroll questions. 

There are payroll providers out there that not only pride themselves on providing excellent customer service and support, but also offer mobile-friendly, self-service portals that give workers access to their hours, accrued paid time off (PTO), check stubs and more.

In other words, find a payroll vendor that goes the extra mile to make their clients–and their people–happy.  

It’s Time to Ease the Pain 

Payroll processing is too important to the success of a staffing agency to settle for a system that: 

• Creates its own set of problems … 

• Requires intricate workarounds and hours of manual labor …
  
• Creates compliance issues and leaves your staff feeling unsupported …
  
• Isn’t really designed for the staffing industry …

Staffing companies need a payroll solution designed for them—whether they process payroll themselves or outsource it altogether. Prompt, accurate payroll is vital to your business, and choosing the right payroll solution is more important than ever.

In other words: paycheck, check ✅.