Are you prepared for the coming higher payroll costs?

Posted on June 12, 2014

Dollar BanknotesLike it or not, every business, large or small, is going to feel the payroll crunch in the next few years. Your costs will begin to make huge leaps due to many factors but your payroll service just may be the one bright spot in all of this.

  • Several pressures will make themselves known soon that may send your payroll costs through the roof. Since the Crash of ’09, payroll has been holding steady but one future factor will be the raising of the national minimum wage. Another will surely be your costs associated with healthcare. They are going up regardless of the size of your business.
  • Payroll pressures will also be felt by the rising of inflation. Prices have been steadily rising while wages have remained stagnant or far below what people need to survive. As prices continue to rise, however, there will be serious pressure put on raising wages. While the unemployment rate and job outlook can be debated, one thing is for sure. Should the job market continue to tighten up, you will be in a position to have to boost your payroll to stay competitive. It will cost you more to retain your good people to prevent them from heading off to your competitor.
  • One way to ease this coming burden is to outsource as much as you can, especially your payroll service. By bringing a payroll service onto your team you can eliminate several jobs within your company. Your payroll service will, in all likelihood, be a far less expensive option.
  • Cross train your employees. Try and make one employee as valuable as two. It will help keep down your labor costs. In addition, start priming your customers and clients for an increase in your prices. You will have to raise your prices in order to stay competitive and to resist the pressure of a coming huge jump in your payroll costs.

Taking on a partner in the form of a payroll service would be a strong move on the part of your business. If you do not have a payroll service, you need to factor everything in and see what a savings it could be to your bottom line.