2020 has been a rollercoaster - minus the fun parts. Businesses have faced everything from dealing with suddenly remote workforces to dealing with cash flow and supply chain issues.
Despite all, HR and HCM industries have kept things rolling along. Whether it was adapting quickly to stay-at-home mandates, adapting to new tax issues or navigating a quarter-end complicated by the outbreak, payroll tax and HCM professionals had (and have!) their work cut out for them.
Fortunately, there were ways to mitigate those challenges. Chief among them were having plans in place to respond to disasters … and making sure operations were strongly buttoned up.
Preparation & Planning Key To Success
Summer Poletti, PTM’s president, was ready for trouble.
Payroll Tax Management’s home of Southern California is well-known for its pleasant weather, palm-lined streets and great beaches, but locals know disaster, just like traffic, can always be around the corner.
That awareness drove PTM’s development of plans aimed at mitigating the effects of various disasters. “Things like long-term inaccessibility to the building because of an earthquake, or a fire, power outages, those are the kinds of things you think about in Southern California,” says Poletti. Every six months, her team ran through what they call a “fire drill,” where they find workarounds in situations where the team might be shut out of their offices for long periods of time.
Preparedness also worked for PTM client Workforce Benefit Solutions in Baton Rouge, a HCM service provider. “We’re in south Louisiana, which gets hurricanes. So, we had a disaster plan pretty much in place already almost by default,” says Workforce’s Brian Lambert.
According to the Federal Emergency Management Agency (FEMA), 40 to 60 percent of small businesses do not open after a major disaster – and 25 percent close one year after the disaster. It’s why business continuity plans and other forms of disaster mitigation are so critical; a study conducted by data recovery firm StorageCraft Technology Corporation found business continuity plans improved the recovery rates from disasters by 17 percent.
A large part of preparedness? Having operations buttoned up tightly. Businesses who have their processes established can turn major disruptions like a suddenly remote workforce into a minor issue. “Our initial preparation, the way we had set up our processes allowed us to make that transition very smoothly,” says Trevitt Schultz of Chattanooga, Tenn.-based Reliance HCM, a PTM client.
But as was the case across the U.S., 2020’s situation presented a unique challenge that defied most disaster plans. As COVID-19 began to spread across the country, multiple states ordered statewide lockdowns, requiring residents to stay home and limit public interaction until further notice, a situation most Americans had never experienced.
Teams who had relied on rapid in-person communications found themselves using other methods to stay in touch and collaborate.
Leveraging Preparation Into Action
When California issued its stay-at-home order in March, Poletti and her team acted fast. “It was with very little notice we had to look at the business continuity plan and figure out the potential scenario we tested out that fit it best,” says Poletti. “Then modify it, test it and roll it out and train with really only days’ worth of notice in order to do so.”
The first step was determining who could perform their duties remotely – and who needed to physically be at PTM’s offices. Tasks such as handling mail, printing checks and other duties can’t be performed by remote employees. So, PTM adapted. “We made sure to stagger it,” says Poletti. “Someone can do the outgoing mail in the morning, and then someone else can come in to handle the incoming mail, whatever the case may be.”
“We print over 3,000 checks and over 10,000 paper returns so we had to get into the office,” says PTM Tax Compliance Manager Kelly Gonzalez. “Since we had to adhere to social distancing, we actually had to put some returns in different rooms, so we weren’t on top of each other.”
Check printing in particular required some careful logistics. “Think about printing a check, getting it signed, getting it stuffed into an envelope with a return and mailing it,” says Poletti. “You can’t, in the midst of a pandemic, have someone print out a check and have them walk over to the person who’s going to match them with a return."
Their workaround required a few extra steps. First, an associate would print checks and then place them on a table in a secured room. Then, they’d email or text the next associate in line to come in and retrieve and mail the checks. “We had to get a little creative,” Poletti says. “It really required looking back at payroll processes that have been established over decades and rethinking how they’re done in order to make it as safe as possible for our employees.”
Communication was also tricky for PTM’s clients. “Everything we did was different,” says Lambert. “We were all working from home, we were all adapting to new ways to communicate with each other whether that was through an instant messenger or a different medium. We definitely had a different way of communicating with our clients, our customers and partners like PTM, because of the fact we were all in different locations, working differently.”
"We were all working from home, we were all adapting to new ways to communicate with each other whether that was through an instant messenger or a different medium."
- Brian Lambert, Workforce Benefit Solutions
Gonzalez faced similar challenges at PTM. “It was a very different experience. There was a lot of electronic communication instead of one-on-one communication.”
Adding to the difficulty was the timing. Most state governments responded to the outbreak around the end of the first quarter of 2020, a critical time of the year for payroll and human capital management businesses. “First quarter’s always a challenge because it involves a lot of the state unemployment tax rate changes … which we don’t always get notified of,” says Schultz. “But those kinds of challenges are expected.”
Fortunately, a combination of preparation and timing – the legislative responses to the outbreak came near the end of the quarter – lessened the challenge somewhat. “Most of the issues with the COVID-19 stuff really don’t take effect until second quarter,” says PTM’s Implementation Specialist James Ingram. “There are credits that clients could’ve taken, but they didn’t fall into play in quarter end, so we really go out of it. It was a crazy, but normal, quarter end.”
“I thought QE went super smoothly,” says Lambert. “We had fortunately done a lot of our prep work prior to (stay-at-home orders) happening, so we actually had a smooth quarter and only had one or two things that didn’t automatically clear for us right away.”
Some even found the switch to remote working beneficial. ““Most of our work and communications lends themselves to working remotely,” reports Schultz. “Our productivity hasn’t suffered at all. If anything, we’re finding less distraction and faster response times.”
Some even found the switch to remote working beneficial. "Our productivity hasn’t suffered at all. If anything, we’re finding less distraction and faster response times."
- Trevitt Schultz, Reliance HCM
Many payroll tax professionals are continuing to take stock of the situation, preparing for another tough quarter while seeing opportunities to grow.
Reliance HCM is watching for opportunities. “I would say that as remote work happens, we’re seeing additional growth in our business where we thought we might be the opposite,” says Schultz. “Businesses are still opening. Our manufacturers have held solid; healthcare clients are very busy, and we’re getting referrals from our current clients. Things are changing, but there are definite opportunities for HCM to provide specialized services.”
Lambert agrees. “You absolutely see some opportunities change as people realize technology can help them,” he says. “And also, they don’t have to have somebody in house to do that. If there are some restrictions and risks with having employees in your building, you offload that risk by having a vendor help you with that.”
“I think employers started to realize they could trust a portion of their people to work from home,” he says. “If anything, they may have been more productive.”
Workforce has seen growth in other ways as well – Lambert reports increased interest about his company’s new onboarding module. “We’ve had multiple clients reach out to us and set it up for the first time even through we’ve offered it in the past,” he says.
Strategies For Success
Although difficult, the ongoing situation is one which rewards creative thinking, planning and preparation. Lambert says having complete technical functionality is critical in these times. “You don’t need to shut down on Monday and then spend Tuesday and Wednesday trying to get technology to be your friend,” he says. “Get technology challenges out of the way; you lose more time than you can afford to lose in our industry because it never slows down.”
Lambert also recommends rethinking team roles. “Really test the flexibility between your employees in terms of what tasks you have everybody doing and the importance of cross-training in most cases,” says Lambert. “I don’t mean you need every employee to do 100% of everything because that’s not efficient, but you can’t have 100 employees specializing in 1%, either. You have to have some cross-training in place, so when someone has to pick something up, or someone has a challenge, or is sick and can’t work for a couple days or whatever the case may be. It gives you the ability to continue to function.”
Having a robust, cloud-based software solution is another way payroll tax, HCM and HR pros are adapting with the times. Schultz says many companies, particularly those with multistate workforces, are looking for the kind of specialized, always-available services cloud-based solutions can provide. “With hiring and the applicant process, so much of that has moved online,” he says. “It was moving online before the pandemic, but there’s even a larger push for clients to have an online-type applicant process.”
Another benefit is the way cloud-based software allows multiple functions to be combined in one platform. Having payroll, time management, HR and applicant tracking in an all-in-one system has allowed Reliance HCM to not merely survive but thrive.
However, it is important to realize that there are still pitfalls to be aware of. “I think leaders need to stop trying so hard to stay connected,” says Poletti. “There’s almost an overcompensation going on right now. Constant video calls, email, text, and other communications mean employees don’t feel isolated, but it can also cause burnout.
“Think about the meeting,” continues Poletti. “Do you need to have it, or would an email suffice? Is it critical that cameras be turned on? Leaders with good intentions can do more harm than good if they can’t find a balance,” she says.
Service Providers More Important Than Ever
Payroll Tax Management has taken steps to ensure we’ll be with our clients for however long this situation lasts. Why? We recognize how important it is to have a partner who can ensure your processes and tax compliances are bulletproof in a time where mistakes can be more damaging than ever.
We’re with you every step of the way. Want to know more? Click the link below.