Big data has enabled businesses to utilize data analytics to extract valuable insights hidden within de-identified payroll data. While businesses keep track of their own payroll data and report it in monthly, quarterly, or annual reports, there hasn’t been a way to get an advanced view into payroll data across the wider ecosystem until now.
Through payroll data analytics, businesses have a massive opportunity to gain insight into the wider ecosystem more than ever before.
What is Payroll Data?
Payroll processing data is information that is generated from payroll processing, which companies conduct on a weekly or bi-weekly basis. Payroll processing refers to benefits and payroll administration, and it can be used as a key source for important information to fuel strategic insights. Looking at de-identified payroll processing data reveals the frequency of payments leaving a company every pay period and can show when hiring trends are increasing or decreasing.
What are the types of Payroll Data?
Payroll data refers to all the details and metrics associated with payroll, from core salary and bonuses to hours worked and overtime. All types of payroll data are helpful for seeing a complete picture.
Payroll data includes:
- Core salary and compensation figures
- Tax withholdings
- Hours worked and overtime by department
- Employee benefit payments
- Distribution of overtime
- Strategic payroll background
- Payroll compliance
- Contingent workforce costs
What is Payroll Data Analysis?
While processing employee benefits and payroll has traditionally been paper-bound and human-led, today’s payroll services typically include tools that offer a deeper look into payroll data, providing reports on everything from employee absence rates to compensation change costs. Although these reports are important and helpful, they are not the same as analytics.
Payroll data analytics is the process of using payroll data and applying data analytics to it that allows businesses to understand economic trends and patterns so they can make better decisions.
Payroll data analysis extends the capability of traditional payroll services by offering a different view into payroll information. Usually, payroll data is examined as it leaves a company, but with payroll data analysis, deposit transactions can be monitored in real time as they move into bank accounts.
The analysis reveals the frequency of payments, number of payees, and the amounts paid, but it does not identify employees by name or include any other personally identifiable information. With a holistic view of payroll deposit data, from payment to deposit, businesses can discover trends and patterns in the market so they can use them to make better decisions.
How to use Payroll Data to identify trends
From understanding seasonal adjustments in the workforce or in business spending, payroll data can help businesses and investors be better informed and make more strategic business decisions.
Inform business decisions
Using data analytics to extract deeper patterns within payroll data can help businesses inform future strategies such as expansion plans or adding additional products/services to their offerings. With a clear picture of operational costs, the viability of growth strategies can be better understood before any decisions are made.
The employment and finance information within payroll data can also help flag inefficiencies or errors in systems that may be costing the company money.
Projections & seasonal forecasting
Businesses and investors can analyze payroll performance to generate more accurate retail projections and help with managing budgets and cash flow. The payroll data provides insight into staffing capacities to help better understand employment statistics, including the potential cost of hiring new employees vs. paying existing ones overtime, tax or compliance implications, and investment opportunities.
Understanding the accurate costs and risks associated with employment across various locations is critical for staff forecasting.
Salary & compensation management
A big part of payroll administration is ensuring that employees are being paid fairly and competitively through salary benchmarking. AI and machine learning technologies can be used to automate this process using payroll deposit data to comply with hiring laws and help ensure that employees are always being compensated appropriately.
Payroll deposit data also lets businesses see the going rates for similarly positioned employees on a macro scale so they can better retain and recruit talent.
Evaluating Payroll Data Analytics Services
When looking for a payroll data analytics service provider, it’s key to understand where they source their data, its quality, ease of use, consistency in delivery, and security.
Envestnet® | Yodlee® is a market leader in data aggregation and data analytics solutions with access to over 17,000 global data sources. The data Envestnet | Yodlee provides is simple and ready to integrate with existing analysis systems, and it is normalized and standardized so it's delivered in the same formats in the same fields every time.
Whether or not you have any data science systems or experience at your company, our data is made to easily integrate with your data so you can start extracting insights from it immediately.
To learn more about the data insights waiting to be discovered that can enhance your business decisions, read about Envestnet | Yodlee’s corporate data analytics.