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 in 2020 without incurring extra spend or hosting a big holiday party? And what’s your COVID contingency plan heading into 2021?
We’ve compiled this end-of-year checklist to ensure you have all your bases covered. 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 2020 provided many new reasons people might have left their jobs—including to care for sick family members or stay home with their children to provide virtual learning—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 COVID continues?
Find creative ways to reward employees
In years prior, you might have given out generous end-of-year bonuses to employees or hosted an extravagant holiday party. But whether due to budgetary concerns or COVID regulations, those year-end rewards might look a bit different this year. 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 this year.
1. Offer financial wellness benefits
One way you can help your employees navigate these challenging times is by offering them free financial wellness benefits. 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.
Services like this are more important than ever. In our annual survey of over 3,000 hourly workers, workers cited day to day needs such utility bills (62%) and groceries (54%) among their top financial concerns. Faster pay was considered an overwhelmingly valuable benefit—94 percent of hourly employees said accessing their pay before pay day would be helpful, increasing 14 percent since last year.
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.
3. Get 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 COVID contingency planning
Unfortunately, COVID concerns will continue into 2021, and your business needs a solid strategy to keep workers and employees safe. The unpredictable nature of shutdowns and various restrictions means you need to stay prepared for anything in order to maintain the physical safety of your staff—and the trust of your customers. Here are some actions to take:
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 2021. More and more employees are considering this the standard and may begin to look elsewhere for employment if it’s not currently offered.
2. Consider accommodations for COVID testing
If there’s an exposure in your workplace, how will you make accommodations for employees who need time off to get a COVID test? Will you require employees to take a test after a possible exposure? These are questions you should ask to determine your COVID strategy for the coming year.
3. Review safety measures and protocols
What measures worked well this year and which didn’t? Maybe you found that signs on the floor didn’t really encourage customers to keep six feet apart and you need a new strategy. Are your current protocols enough to keep people safe?
4. Prepare your curbside strategy
If you are a restaurant, what is your curbside/to-go strategy? Even if you are currently allowed indoor dining, it’s best to be prepared should things need to get stricter again. Plus, many customers are now used to the convenience of curbside pickup or delivery services, so it’s wise to be prepared for that demand to linger even when COVID is not a concern.
Conduct an end-of-year tax review
Of course, one thing that hasn’t changed in 2020 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 2020 payroll taxes to cross-reference), don’t forget these essential employee tax considerations.
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.
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 2021. 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.
And 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 in 2021. 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.