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Optimizing Payroll for the Manufacturing Industry

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Blog updated 12/18/2020

Payroll is necessary for nearly any business, regardless of its industry. However, there are some industries that need more than just basic payroll software in order to better run their day-to-day processes. Chief among these is the manufacturing industry. While businesses of any industry have a variety of roles for their employees, within the manufacturing industry you will often find that these roles offer different pay scales. Whether it’s assembly work, machine operation, packaging, shipping, or supervising, organizations in this industry need to have payroll software that can handle the intricacies of running a manufacturing business.

Manufacturing pay scales usually come with different pay cycles as well for workers, and this can make payroll administration for manufacturing quite challenging. Different pay cycles, varying rate calculation, and the need to break down labor costs against constituent production tasks are all pieces of the administration process that need to be accounted for. To sum it up, manufacturing companies need flexible payroll software to handle the complexities and factors of payroll.

Union Reporting

Manufacturing is one industry where employees may or may not belong to a union. Some companies may only employ union workers while others vary in their degree of union involvement. Either way, the option to be able to deduct union dues before payment, have reporting capabilities for the union, or the ability to make union contributions for the company. Heavy reporting capabilities are very important to have when it comes to running daily processes for manufacturing companies.

Time & Attendance Integration

Labor in manufacturing work is generally shift work and paid hourly. Rather than using a hand-stamped time punch for clocking in and out, there are electronic alternatives that will make recording and paying accurate wages much easier. Stamped punches can come out very unclear or sometimes are “double-marked” in the same area making punch times difficult to read. With time clocks in place, not only is punching quick and simple for the employee, but the information for timestamps is electronically transferred into the company’s payroll software as well. This is especially helpful for large manufacturing companies. Seamless integration between worker attendance and payroll is a must for manufacturing companies.

Access to Employee Self-Service

Shift work, especially in the manufacturing industry, can be located in a warehouse or outdoor facility where workers perform hands-on physical labor. This can create a disconnect between HR processes from the corporate office and actual management processes in the warehouse or work area. When employees want to keep track of pay stubs or request time off, the process of doing so may get lost in translation when employee information is not easily accessible by managers or supervisors. Giving employees access to their own information through an employee self-service will eliminate a lot of work from the management level and put the responsibility on the employees to request, review or edit information.

While almost all basic payroll management is the same (collecting hours, withholding taxes, and compensating employees for hours worked) there are some industries that need extra features to better handle the complexities of the business. Manufacturing is one of these industries that usually has heavy administration work in payroll. For instances like that, a versatile, cloud-based payroll and HR system is essential for an organized and fast process.

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