The role of HR and payroll software in manufacturing
HR and payroll software can help manufacturers overcome the unique challenges they face, from labour shortages and high turnover to meeting complex workforce management requirements. Here's how.
The challenges manufacturers are facing right now
Rising labour costs and material costs
The cost-of-living crisis, the increase in National Minimum Wage and the changes to employer National Insurance Contributions (NICs) have all put financial pressure on manufacturers across the country. Essentially, they’re now having to do more with less, so automating operations and improving efficiencies has never been more important.
Talent shortages and high employee turnover
Boosting employee engagement and morale on the factory floor is difficult. Largely as a result of poor employee morale, the manufacturing industry has a staggering 39% employee turnover rate. To offset the impact of this knowledge drain, manufacturers end up spending more on recruitment and upskilling, which can be extremely costly.
Complex workforce management requirements
Another challenge for manufacturers is unusual shift patterns and complex time and attendance (T&A) requirements, which have a knock-on effect on payroll, too. Forward-thinking organisations are moving away from using paper-based timesheets for workforce management and instead opting for software that automates the process, but this can be met with hesitation from employees who aren’t digitally savvy.
What are the benefits for manufacturers who use HR and payroll software?
HR and payroll software helps manufacturers overcome these challenges by:
Streamlining the recruitment process for a better candidate experience and reduced time-to-hire
Automating complex payroll processes and reducing the risk of manual error
Simplifying workforce management requirements like shift scheduling
Providing centralised people and finance analytics for data-driven decision making
Engaging employees in their training with personalised learning materials
Automating reminders for compliance training renewals and providing audit trails for inspections
Choosing the right HR and payroll system
Manufacturers tend to prioritise efficiency, compliance, and accuracy when choosing an HR and payroll system. Key features for organisations in this industry include:
Time and attendance (T&A) tracking. Crucial for manufacturers when ensuring operational efficiency and labour compliance, T&A tracking software automates the process of monitoring employee punctuality, absenteeism, and rota errors. This allows HR to spot trends or concerns before it’s too late.
Real-time payroll. Provides precise calculation of wages, deductions, bonuses, and commissions in real-time, with no need for retrospective changes. Ensures employees are paid correctly and on time, which boosts their trust in the organisation.
Shift and overtime management. Supports scheduling for complex shift patterns and provides accurate calculation of overtime while remaining compliant with labour laws.
Job costing and labour allocation. This provides allocation of labour costs to specific jobs or projects, with detailed reporting on labour expenses for cost analysis and budgeting.
Employee self-service tools. Allow employees to view their payslips, request time off, or update their personal information without having to send queries through to HR.
Scalability. A flexible system is key for manufacturers as they often require customisable features to suit their specific needs and processes.
Data security and privacy. Robust security measures protect sensitive employee and financial data from breaches and unauthorised access, ensuring compliance with data protection regulations.
Compliance. Manage employee records from one central location and maintain compliance with easy-to-manage training and reports.
Analytics and reporting tools. Provide customisable dashboards to track key metrics such as payroll expenses, labour efficiency, and employee turnover. Reports can provide manufacturers with detailed insights into their labour expenses, identifying areas for cost saving or efficiency improvements.
Individual manufacturing businesses may not require all these features, but by investing in HR and payroll software, manufacturers can significantly enhance operational efficiency, save time, ensure regulatory compliance, and make data-driven decisions on labour, cost and productivity issues.
Why do manufacturers choose MHR's integrated HR and payroll software?
- Our solutions save time and improve reporting capabilities, allowing HR to become a strategic driver instead of struggling with manual tasks
- They help manufacturers overcome their difficulties with attracting new talent by streamlining the recruitment process
- Productivity increases and your people are more engaged
- Real-time payroll provides accurate data and reduces risk of error
Detailed analytics into workforce trends and labour costs allow you to make data-driven decisions
“It has enabled me to better manage training and competencies. It has also given us the ability to recognise good work which has fed into our everyday work culture and improved morale.” - Jason Wilde, Production Manager at Toray Advanced Composites
