Business owners, managers, and HR professionals alike all have certain tasks to complete at the end of year. But aside from the normal tax and payroll to-do’s that usually take precedence, there are other things to consider as this rollercoaster year comes to a close. Anyone in charge of employee retention, customer engagement, or business success may find themselves reflecting on some slightly different questions this winter. For example, how can you reward employees for their hard work during these times without incurring extra spend? And how can you better support your employees during the current financial climate?
We’ve compiled this end of year checklist to ensure you have all your bases covered to fill the new worker demands. By getting a plan in motion, you’ll be better equipped to head into the new year feeling organized and ready for success.
Take stock of employee turnover
Part of making sure you have a team of employees who are engaged and productive involves reviewing your employee turnover. Although the pandemic provided many new reasons people might have left their jobs—like the booming gig economy allowing them to work remotely—it’s still important to review how many employees you lost this year and why. The data can help you determine what’s working within your organization and what isn’t.
1. Calculate your turnover rates
Start by calculating your employee turnover rate. Remember that turnover can include voluntary resignations, dismissals, and retirements. You only need three numbers to calculate your annual employee turnover rate; use this quick tool to find out what it is.
2. Examine the trends
After you have the number of how many employees left, ask yourself a few questions: One, what were the reasons these employees left? And two, how many employees did you need to replace within three months? Typically, employees that left soon after starting can help you see if there are onboarding steps you can take to help improve retention.
3. Strategize ways to boost retention
Speaking of employee retention, improving it not only helps company morale, but can save money, too; the average cost of replacing an employee ranges from one half to two times their annual salary. Think of strategies to keep more of your employees satisfied and engaged at work next year. What benefits can you offer to ensure they won’t leave for the competition? What support do you need to offer right now as the financial situation keeps worsening? How can you encourage your employees to stay with you an not leave you for the gig economy? Whether you're in the retail, manufacturing, restaurant industry, or any other vertical, retention should be top of mind right now.
Find creative ways to reward employees
In years prior, you might have given out generous end-of-year bonuses to employees or organized a huge holiday party. But whether due to budgetary concerns or realizing that the modern workforce is looking for more than a regular reward, those year-end rewards might look a bit different now. The good news is that showing your support doesn’t need to mean spending a lot of money. There are creative ways to reward your employees and express your appreciation for their hard work–helping them improve their mental, financial, and even physical health is now within the reach of employee rewards.
1. Offer financial wellness benefits
One way you can help your employees navigate these challenging times is by offering them free workplace benefits targeted to their financial wellness. Benefits like instant pay (also referred to as earned wage access) let your employees access a portion of their earned wages ahead of payday if an emergency arises. And finding a payments platform that can pay your employees their tips or mileage reimbursements immediately after each shaft can drastically improve your employees’ cashflow and help them avoid overdraft fees or taking out high-interest loans.
Paying your employees faster can help them stay afloat financially. It also helps your business stay competitive, when things like earned wage access or faster digital tip payouts have become table stakes for today’s hourly worker.
2. Express your gratitude
After you explore what financial wellness benefits you might offer, a heartfelt thank you note can also go a long way in showing how much you appreciate your employees. (And there’s data to back it up!) Write holiday cards and include a simple gift card to a coffee shop or local retailer to spread end-of-year cheer and remind your employees you value all that they do. Also, consider how your gratitude can help them have a better work-life balance—yoga class passes or movie tickets can help them take time out of their busy schedule to enjoy with friends and family.
3. Gather honest feedback
One of the best ways to show someone you value them? Ask for their opinions. Collect honest feedback from your employees at the end of this year, asking them what benefits they would find most helpful, what they like about their job, what they’d like to see improved, and any other comments they care to leave. It can be helpful to make this feedback anonymous so people feel more comfortable sharing their honest thoughts.
Continue contingency planning for the future
Unfortunately, although the pandemic seems to finally be going away it definitely showed businesses that things can change in a heartbeat. That’s why it’s important to focus on staying prepared for anything that might come in the future. There might be another pandemic, the financial climate around the world is not looking like it will improve anytime soon, and there’s even supply chain issues as we’re dealing with the aftermath of the pandemic and political turmoil. Everything could change, so you better cover your fronts.
Here are some actions you can take to be better prepared for the unpredictable future:
1. Review your PTO policy
Paid time off (PTO) policies can vary from company to company, but they’re more important than ever right now. Offering paid sick time is crucial to keeping people safe—if employees can’t afford to take time off when they’re not feeling well, it can pose a major health risk to your entire organization.
As part of our survey with Quartz, 48% of hourly workers surveyed said the most helpful benefit their employee could offer would be paid sick time. If you don’t currently offer this benefit, now is the time to assess your budget and see if you can offer it in the coming year. More and more employees are considering this the standard and may begin to look elsewhere for employment if it’s not currently offered.
Besides PTO, ensure you’re prepared for open enrollment to suit your employees as best as you can!
2. Consider company spending and savings
During the past few years businesses had to survive on their savings or ask for loans–if the government’s aid wasn’t enough. This showed that both employees and companies need to have a solid cushion in case things turn south. Review your company spending and where there can be cuts without harming employee satisfaction and company output.
3. Review safety measures and protocols
What measures worked well this year and which didn’t? Are your current protocols enough to keep people safe? Consider all of your safety protocols–we don’t mean just physical safety but also mental health. Do you have processes and protocols that make sure your staff can be in the best health possible and that this is not ever risked?
Conduct an end-of-year tax review
Of course, one thing that hasn’t changed this year is the need to do some end-of-year tax planning. While this isn’t an exhaustive list of tax to-do’s (here’s a complete guide to payroll taxes to cross-reference), don’t forget these essential employee tax considerations. Additionally, in the future is good to have a payroll checklist established so that your HR and finance teams never forget anything (the one below is a good starting point).
1. Review tax rates
Tax rates and wage bases are two things that can change each year, so it’s important to review your rates for federal, state, and local taxes. These include:
- Federal income tax
- FICA tax (social security and Medicare taxes)
- Federal unemployment tax (FUTA tax)
- State income tax
- State unemployment tax (SUTA tax)
- State-specific taxes
- Local income tax
You should also find out if there are any new wage bases in the upcoming year. Pay attention to Social Security, SUTA, and state-specific tax wage bases.
2. Update employee tax info
Your employees need to review their selected allowances for federal and state income taxes each year. Current employees should make sure they complete a new W-4 form by January 1st if their personal information or allowances have changed. And you should send W-2s to any former employees you paid in the past tax year who no longer work for you. Additionally, consider the possible changes to independent contractor classification, some of your workforce might change class.
3. Perform a payroll bank reconciliation
If you use paper checks to pay employees, you’ll need to perform a payroll bank reconciliation through December 31st of this year—including identifying still-outstanding checks and comparing payroll tax withdrawals from your bank account to the amounts on tax liability records.
Future-proof your payroll processes
If you’re still paying your employees with paper checks or using cash or tip payouts, leave these payroll processes in the past. Not only do they require extra management hassle on your part, but they also cost your company money. (To see exactly how much money paper checks could be costing your organization, try this savings calculator.) Now, more than ever, paying people faster (including tips and other one-off payments) is also essential. Here are a few ways to implement these solutions:
1. Move on from outdated paycards or paper checks
The economic downturn since COVID, combined with people’s reluctance to use cash, means paying people digitally should be a given. But just how you pay people also matters. Many paycard providers charge hefty fees for your employees and take too much time to manage on your end. And paper checks cost you time and money to issue.
Switch to a debit card and digital wallet that lets you pay your employees painlessly and without fees or management hassle for anyone involved. Your employees will appreciate the money they save—and you’ll spend less time fielding questions or worrying about payroll.
2. Issue one-off payments instantly
Instant tip payouts are one of the best things you can do for both you and your employees in the coming years. Instead of having to wait two weeks to receive tips on their next paycheck (or requiring you to go to the bank to make change constantly), you can send employees their tips digitally after each shift.
For truck drivers, delivery drivers, and anyone else on the open road, delays in mileage reimbursement can cause major cashflow problems. Being able to instantly reimburse them each day can solve major cash headaches for both of you.
On-demand, contactless payments will be table stakes to offer employees from now on. With Branch, you can give your employees access to their earned wages ahead of payday, issue instant payments after each shift of tips, mileage reimbursement, and other payments, and empower them with a fee-free checking account and Branch Card that requires zero management hassle for you.
Learn more about how Branch can help your company in 2021 or download a simplified version of this checklist to print or save for later by clicking below.