Square Talks Temp Payroll

The holiday season always brings with it a major crush of hiring for temporary employees — and the year 2018 was widely forecasted to be one for the record books on that account. According to a Challenger, Gray & Christmas analysis, employers were predicted to bring in around 700,000 seasonal workers for the December holidays, the biggest hiring spree since 2015.

According to the report, the massive demand for employees, combined with record-low unemployment levels, has meant that seasonal employers have not only had to find workers, but entice them in with higher (approaching full-time) wages and even perks offerings.

That’s a lot for any business to deal with, but it’s a particularly heavy lift for the small and medium-sized businesses (SMBs) with which Square specializes in working, said Caroline Hollis, Square’s head of payroll, to PYMNTS. That’s because, during the busiest sales season of the year, payroll and back-office worries are the last things any entrepreneur wants to think about.

“What we hear from our clients all year, but especially at this time of year, is that they want someone else to take all of this off of their hands. The people say, ‘We started this firm because this is what we love doing, and we want to spend time on the things we love. And we want to outsource and eliminate the rest,’” she said.

Payroll, she noted, is particularly feared because labor is usually clients’ largest cost, and trying to manage it is extremely time-consuming. Given the complexities that can exist around taxation, trying to take all this on can be “really scary.”

“This is why we built Square Payroll, to be honest,” Hollis said — so SMBs could hand off what they don’t need to worry about and dedicate their attention to the things they do.

At no other time of year is that more needed than during the holidays, she said, when employers must often manage the major upswing in transactions at the same time that they have to manage a new roster of workers.

Consideration Upfront Saves Confusion Downstream

The biggest challenge — and the first and foremost consideration that businesses need to take into account when creating their class of seasonal hires — is finding the right people for the job. It sounds obvious, Hollis said, which is why one might be surprised how easily a lot of employers skip over that step. They get so focused on getting a position filled, they forget to really think about who they need to fill that position.

That means, before a single interview is done and any new workers are hired, the hirer in question needs to create straightforward roles and goals for this work, have a clear picture of what type of work employees will be doing and set understandable parameters around how they want that work to get done.

“SMB owners aren’t going to have a lot of time to oversee and train [people] once the season starts, which means they need to have a very clear picture of who they need, and what they need to be able to do walking in the door,” Hollis explained.

That base set of needs will vary. The retailers that Square works with have different needs from restaurants, which have different needs from Christmas tree farms. In addition, having a specific idea about the jobs they need done, and the right workers for these jobs, she noted, is more than good for operational efficiency during a busy time of year.

“When all of that is complete, and you are clear on it, you can really focus on how to build compensation for the job,” she said. “People tend [to just] think about that in terms of the hourly wage, but compensation can be a lot more than [that].”

Temporary hires don’t often get things like a 401K or health benefits, but employers might want to offer things like pre-tax spending for commuting expenses, instant payment options, discounts within the retailer store or bonus pay for hitting sales targets.

A clear vision of what the jobs are, and who the right workers might be, she noted, also helps businesses navigate a question that has been complicated in years past when it comes to hiring a temporary workforce — whether their workers ought to be contractors or temporary W-2 employees.

Historically, SMBs have favored contractors because that was the easier option from a payroll and operations point of view. That made sense if it was clearly a contractor job (say, someone hired to build a holiday display in a store window), but less sense in the case of a seasonal store clerk.

“The problem, in the past, was that it was so difficult to get set up to pay W-2 employees — it would, literally, take weeks. It couldn’t be done in-house and the entire experience was very complex. Now, services like Square Payroll and others can hand them tools that make it really easy to get set up in minutes and be ready to pay, whether it is a contractor or a W-2 worker,” she said.

Coming out of the holiday season and into a new year, Hollis added, automation in payroll services will be the gift that keeps on giving when it comes to managing payroll, and back-end services in general.

The Automated Future

When talking to Square’s partner SMBs about their experiences before and after Square Payroll, Hollis told PYMNTS, the stories the company hears most often are about time management — and how the act of simply tracking employee hours, adding up compensation and getting payroll set up is a process that used to be 10 hours a week (in a good week, with no overtime). During the holiday season, though, when the volume gets turned up to 11, it is almost never a good week.

While Hollis, of course, recommends that every business choose Square Payroll, she said the bigger consideration, when choosing a service, is finding the partner, any partner that will most efficiently outsource away all that time-trap pain with a powerful dose of automation. That means handing over payroll taxes, she noted, and “choosing a solution that lets your employees do the [work for] you when it comes to managing their data — and preference after you, as the employer, [have] finished adding their name, email address and what you plan to pay them to the system.”

She continued, “We’ve also found [ways] to integrate this business process into the point of sale [POS], because that is the main point that an employee is going to be engaging anyway. We just make it easy to clock in and out while they are there, so there is no process change.”

SMBs don’t have time for a whole process change, she noted — pretty much ever, and especially during the busiest six-week run of commerce in a year. What they need is a way to automate their processes so they can focus on bringing in the right talent and take full advantage of the busiest few weeks of shoppers’ lives each year.

“At the end of the day,” Hollis said, “Square Payroll is all about using our ability to connect the POS to payroll so we can automate in ways others can’t. That saves business[es] time on the back end so they can focus on what they love on the front.”