Is Your Payroll Software Ready for the New Workforce? Read to know!

The year 2020 has been a challenging year for each one of us. Organizations have experienced tremendous shifts when it comes to workforce planning. “9 to 5†job on a desk is a tradition of the past. The transition from cubicle to home has evolved the workforce module. Vendors who have developed web based applications have introduced numerous features to bed the requirements in establishing the new workforce. 

The major department that has experienced to and fro changes is the payroll department. Changing workforce has increased the need to evolve a new structure for payment of salaries and benefits of the employees. The question at this point of time that has raised eyebrows is “ Is the online payroll software used by your organization capable of such adapting changes ?â€.

To evaluate the potential of the payroll software it is essential to understand the changes that have been experienced since the pandemic hit the world. 

A sudden shift from office to home 

After imposition of the lockdown payroll team had to evaluate benefits that had been assigned to the employees. Earlier employees received benefits such as travel compensation, meals etc. these services had to be reconsidered. Payroll team moulded these benefits to personalized laptops, reimbursement on internet bills, etc. 

Slashed salaries and downsizing of workforce

Covid has challenged small to medium sized industries. Even the huge industries have experienced a declined profit curve. For instance, fashion brands such as Arcadia group, robinsons etc have closed stores due  to the impact of covid. Many organizations opted to slash salaries of the employees upto 50% to escape bankruptcies. Employees were laid off inorder to cut costs to the company.


Fortunately things didn’t remain the same for long. As the organizations settled in with the situation it started to regain the ascending profit curve. These ascending curves made the halted a[ppraisals to become reality.  

Organizations have experienced an evolved workforce since the first wave of covid. The virtual work module has made the employees reconsider their 9-5 module. Administrations have started to implement hybrid modes of work along with an increased number of gig workforce. 

Let’s start with hybrid workforce and its impact on payroll process:

Hybrid workforce

Hybrid workforce defines a setup where the entire workforce is split into two parts. The first half of the team worked remotely , the other functioning from the office. Usually the teams have an alternative option to function from the office or remotely.

Organizations have opted for half of the team to be the full time employees and hire freelancers or part time contractual employees in accordance with the requirements.

Gig workforce 

Gig workforce has gained popularity once the pandemic forced employees to function remotely. The term gig represents a show or a concert performed by artists. In HR terminology, gig workforce represents the team of freelancers, temporary workers, and contractual employees who are hired for a specific project. 

The pandemic shook the financial pillars of many organizations around the globe. The HR team evaluated hiring a gig workforce was a feasible option. But implementation of such a workforce required new rules and regulations to be established to ensure that the employees are paid and can claim benefits provided by the organization. 

The challenges faced by the payroll team in incorporating these workforces:

The traditional payroll system embedded the traditional work module. The change in workforce increased the need to evaluate the entire payroll system. 

As freelancers and contractually hired employees are not eligible for the benefits provided to any full time employee. The payroll team had to amend rules in order to ensure that the freelancers and the contractually hired employees receive the deserving amount of salary against the services rendered. 

The online payroll software functioning in accordance with the old regime had a difficult time distinguishing workforce as per their designation. 

The second challenge faced by the payroll software was

  • The management of expenses. Remote functioning had changed the structure of payable accounts.
  • Each freelancer had his/her own price against the services provided by them. 
  • Gig workforce are paid according to the convenience of the freelancer instead of the employer.
  • There is no tab on minimum wage which might result in exploitation of the employees.
  • Payment of such employees has the capability of creating chaos. As each individual had a different mode of payments. 

There are a few must have features of an online payroll software that helps in tackling such issues-

Auto-verification of the salary structure

An automated verification tool can help in payroll process immensely to verify the accuracy of the salary that needs to be paid to the employees, be it full time employees or the gig workforce.


A seamless integration with the existing application can subdue the workload of the payroll team.. As it can collect the required information and assist in determining the amount that needs to be paid out to the employees. 

Easy access to upload receipts and bills

As mentioned earlier the salary structure has been influenced by the pandemic. Employees receive reimbursements for internet bills and medical bills. The payroll software provides a one click upload option for the employees to update the payroll team of the expenses. 

Statutory compliance 

The payroll structure has been changing to and fro since the pandemic. The vendors dealing with payroll software have developed features that notifies the payroll team and the employee of the upcoming deadline. It provides easy access to download tax related forms and stay updated with new laws implemented by the state and federal government. 

Also Read: What are the benefits of using an HR management software?

These might seem like a few common features but these features have been upgraded in order to meet the needs. Some payroll software might not be compatible with the new features, coexisting with other upgraded applications such as expense management software etc. the answer to these problems is advancement in technology and adaptability. An adaptable payroll software is a considerable option that can incorporate these changes and ensure smooth functioning of the organization.

Amit Kumar

Amit Kumar is a Digital Marketing Strategist in a leading organisation. A creative marketing strategist with over 8 years of experience developing digital marketing strategies and guiding business development