Payroll Management Trends, Threats, and Concerns

Construction companies on the path to enhanced efficiency are quick to automate processes, bring in new workforce productivity solutions, and up their analytics game. But not many realize that if there is one function that requires immediate attention, it is payroll management!

Effective payroll management is a crucial aspect of every business, especially in the construction industry, which continues to rely on a substantial proportion of union workers to meet today’s growing real estate and infrastructure needs.

Payroll management trends are constantly evolving

Construction payroll is hard enough to manage at the best of times. Let’s look at the top 5 payroll management trends that every construction company must keep an eye on:

1. The rise in the gig economy: The construction labor market is increasingly being characterized by the predominance of short-term contractors or freelance workers as opposed to permanent ones. In the coming years, the construction industry will see a rise in the gig economy, with more unions and contract workers being hired. Not only do such workers allow for leaner operations, but they also help cut down on payroll costs and bridge the widening skills gap during high-demand periods. In addition, these union workers also help in increasing the supply of liquid capital, allowing companies to bid on more projects.
2. Payroll automation: Project Service Automation will enable construction companies to manage, control, and deliver project-based work – helping save time, money, and reputation more effectively. Payroll automation will also help companies maintain better and more effective daily logs and provide accurate project information to owners, general contractors, and specialty contractors at every stage. With laws and rules changing frequently, automation will also enable automated compliance, ensuring quick and continuous adherence to the latest requirements.
3. Increased investments in AI-based payroll: AI is set to be a game-changer in the realm of payroll management. With union payroll processing becoming increasingly error-prone, AI is set to disrupt the traditional payroll function by eliminating chances of errors. It will bring in much-needed accuracy and precision into the payroll function. AI-based payroll will also enable construction companies to enable and ensure compliance by automatically updating the rules, ensuring adherence, and rectifying violations.
4. Real-time data exchange: In the construction and EPC sector, real-time data sharing is becoming a critical requirement for project success. Such exchange help field crews share day-to-day operations information with geographically dispersed teams and streamline the process of assigning resources and tracking tasks. By getting complete visibility into every aspect of the project, analytics can field workers connected with schedules, checklists, and daily reporting and ensure better coordination between the job site and back office.
5. Crypto payments: Although still in the nascent stage, the union payroll function will also inevitably witness the emergence of crypto payments. As the world in general gets more comfortable with cryptocurrency, payments in bitcoins may appeal to construction companies with a global workforce. Crypto’s near-instant payment capability and low transaction fees will accelerate construction payroll while eliminating intermediary financial institutions. Crypto payroll will also bring in much-needed visibility and security into the payroll function which is increasingly susceptible to threats and attacks.

So are threats and concerns

Despite all the changes that are happening in union payroll, the function is also vulnerable to several threats and concerns. Let’s look at the top issues with payroll management today:

• The lack of skilled payroll management talent makes it difficult for construction companies to process payroll in a timely, accurate, and efficient manner.
• With rules and regulations constantly evolving, maintaining daily logs using Excel can lead to missed deadlines and heavy non-compliance fees.
• Construction and EPC companies are facing several difficulties ensuring accurate and timely administration of new payroll tax changes and employee benefits.
• At the same time, regulatory changes that are federally driven happen frequently at the state and local levels and are difficult to keep up with.
• Staying abreast with constantly evolving wages, overtime rates, voluntary benefits, and more is also not easy for construction companies.
• The reliance on manual methods like punch cards is also making employee attendance difficult to track, which eventually impacts payroll accuracy and timeliness.
• Calculating accurate pay and other incentives requires construction companies to carefully gather, store, and process attendance and overtime data – which again doesn’t come easy.
• With union workers moving in and out of the system, ensuring the safety and security of confidential worker data is another challenge facing construction companies.

How CEM helps

At CEM, we go the extra mile to engineer comprehensive solutions that significantly improve construction payroll accuracy and precision. Our carefully crafted payroll solutions comprise essential features that help companies overcome many of the existing challenges while also allowing them to stay a step ahead of trends. For instance,

• Our suite of Construction Management Software solutions helps companies better manage budgets, commitments, and forecasts. Using features like planning, scheduling, resource management, and task tracking, HR managers can more effectively plan and manage complex payroll processes and factor in current rules and regulations while calculating payroll.
• Through effective Project Service Automation, we simplify the management, tracking, and submission of estimated and billed project time. Our automation services also help construction companies streamline the process of assigning and managing resources, creating RFQ and tenders, evaluating bids, and managing and coordinating effective workflows.
• Our union payroll solution is designed to manage the construction payroll processes of different states and unions while remaining fully compliant with United States labor laws. Using our solution, companies can determine proper union rates, differentials, overtime assessments, fringe benefit management, and payroll taxes – all under a single roof.

The road ahead

As we enter an era of fierce competition where the payroll function is controlled by new rules, regulations, and technology advancements, the challenges to effective payroll are many. HR heads in construction and EPC companies must stay a step ahead of the latest news, rules, and concerns in payroll to streamline management, address regulatory concerns, and boost union and worker satisfaction.

Transform your construction payroll today with CEM!