Payroll analytics: The key to unlocking strategic HR insights
by Maneesh Choudhary | 4 min read
Increasingly, businesses across industry verticals are using payroll analytics to glean HR insights. Several large businesses use payroll analytics to improve profitability. The smaller and medium-sized businesses have been a little slow in warming up to the idea, but this stance is also beginning to change.
Payroll, for most businesses, is now free of the traditional paper-bound manual processes. Payroll software, now used for payroll processing, enables a detailed look at payroll data and provides reports on employee absence rate, the incremental cost of compensation change, etc. Such reports, although useful, do not provide the same value that analytics does.
Payroll analytics takes payroll data and applies data analytics to understand underlying trends to support decision-making. It involves an in-depth, multi-aspect analysis of payroll to help decide on a future course of action or identify aspects of the business that are contributing disproportionately to, for example, the indirect labour costs.
Undertaking such an analysis helps see the linkage between the performance of the business to the performance of a particular department or shifts. Insights from payroll analytics help businesses optimize employees’ workplace experience to drive superior business outcomes.
Payroll data, when combined with HR and business data, becomes an invaluable source of information. The strategic potential of this data can be fully leveraged through payroll analytics to glean HR insights.
The strategic HR insights that can be extracted using payroll analytics include:
Payroll analytics is helping businesses benefit from the data they have always had. Businesses are now undertaking an in-depth analysis of payroll data to extract valuable information, applying this information to create exceptional customer and employee experiences and deliver superior business outcomes.