Case Study: Streamlined Payroll Process for an Industrial Water Pump manufacturer

Company Profile

The client is a distinguished industrial water pump manufacturer with its headquarters in Japan, possessing more than a century of industry experience. In its Singapore office, the company employs a dedicated team of ~40 individuals.

Problems They Faced

1. Inaccuracy in Payroll Processing

Company was reliant on excel to compute salary components; eg. overtime. Frequent errors in tax deductions, CPF and salary computations.

2. Compliance Issues

Struggles with keeping up-to-date with regulatory changes, leading to potential legal pitfalls.

3. Resource Drain

Excessive administrative burden on the HR department, detracting focus from core HR functions like talent management and employee engagement.

Client’s Manual Payroll Report for June 2021, with names omitted to maintain privacy and confidentiality.

Solutions

Kairos HR Solutionist is engaged to provide comprehensive payroll outsourcing services. The solutions are:

1. Implementation of Payroll Software

Implemented a suitable payroll software tailored to the client’s specific needs.

2. Regulatory Compliance Assurance

The software ensures adherence to the latest employment laws and tax regulations, reducing the risk of legal issues.

3. Automated Processes

Implemented an automated attendance tracking system to enhance the accuracy and efficiency of payroll computations and distributions.

4. Custom Reporting

Provides detailed payroll reports for better financial planning and decision-making.

5. Employee Self-Service Portal

The software has an online portal for employees to apply for leaves, submit expenses, access payslips and tax information.

Client’s Payroll Report for November 2023, with names omitted to maintain privacy and confidentiality.

Client’s Attendance Report for December 2023, with names omitted to maintain privacy and confidentiality.

Client’s Employee Self-Service Portal, with names omitted to maintain privacy and confidentiality.

Client’s Employee Self-Service Portal, with names omitted to maintain privacy and confidentiality.

Implications of an ineffective and non-compliant payroll system:

Legal and Financial Penalties

Non-Compliance with Tax Laws

Incorrect tax withholdings and filings can lead to substantial fines and penalties from authorities; Ministry of Manpower, Central Provident Fund, Inland Revenue Authority of Singapore.

Violations of Labor Laws

Failure to adhere to minimum wage laws, overtime payments, and record-keeping requirements can result in legal actions and financial liabilities.

Employee Dissatisfaction and Turnover

Payment Errors

Inaccurate or late salary payments can lead to employee dissatisfaction, reduced morale, and potentially high staff turnover.

Benefits Mismanagement

Incorrect calculation of benefits, such as leave balances, pension contributions, and insurance, can erode trust and negatively impact employee retention.

Operational Inefficiencies

Resource Drain

An inefficient payroll system demands excessive time and resources, diverting attention from core business activities.

Increased Error Rate

Manual or outdated systems are prone to errors, necessitating additional time for corrections and verifications.

Data Security Risks

Vulnerability to Data Breaches

Inadequate data security measures in payroll processing can lead to sensitive employee information being compromised.

Compliance Risks with Data Protection Laws

Non-compliance with data protection regulations like GDPR & PDPA can lead to legal consequences and hefty fines.

Reputational Damage

Public Perception

Consistent payroll issues can tarnish an organization’s reputation, affecting its ability to attract talent and retain clients.

Investor Confidence

Payroll non-compliance and the resulting financial implications can erode investor trust and affect future investment.

Strategic Disadvantages

Inability to Scale

An ineffective payroll system can hinder a company’s ability to grow and expand into new markets, especially those with different regulatory requirements.

Lack of Business Insights

Poor payroll management can lead to inadequate reporting and analytics, limiting strategic decision-making based on workforce costs and productivity.

Examples of Payroll Mismanagement

Source: Today

Source: Tesis

For businesses facing similar payroll management challenges, partnering with Kairos HR Solutionist can offer a seamless, compliant, and efficient payroll solution. To explore how your company can benefit from our expert payroll services, drop us a message!

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