Tailoring Payroll for the Manufacturing Industry

A basic payroll process is required for all businesses regardless of industry. However, there are some industries that need extra tools in order to better run the back office. The manufacturing industry is one of these. Much like any other industry, there are plenty of different roles for workers. Whether it’s assembly work, machine operation, packaging, shipping, or supervising, these different roles often have a different pay scale.

These 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 needs to be accounted for. To sum it up, manufacturing companies need very flexible payroll software to handle the complexities and factors of payroll.

Union Reporting

Manufacturing is one industry that holds a high proportion of unionized labor. In 2013, 10.1% of manufacturing workers belonged to labor unions (much higher than the 6.7% average unionized rate in the private sector of industries as a whole). Some companies may only employ union workers and other companies may 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 back office processes for manufacturing companies.

Time and 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 of work, there are electronic alternatives that will make life much easier for reading shifts worked by laborers. Stamped punches can come out very unclear or sometimes are “double marked” in the same area making punch times difficult to read for HR employees and managers. With time clocks in place, not only is punching in quick and simple for the employee, but the information for time stamps are electronically transferred into company cloud payroll as well. This is especially helpful for larger manufacturing operations with a larger amount of workers. Seamless integration between worker attendance and payroll is a must for many manufacturing companies.

Employee Accessibility to Self Service

Shift work, especially in the manufacturing industry, is mostly utilized in a warehouse or outdoor facility where workers perform hands-on physical labor in set shifts. This can create disconnect between correct HR processes that may have come from a 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 almost all work from the management level and put responsibility on the employee themselves to request or view their own human resource 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 will need extra features to better handle all of the complexities of the business. Manufacturing is one of these industries that usually have 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.

If you're interested in seeing how a single-source software could change the way your company processes payroll, check out our Dominion's Payroll for Manufacturing page below!