Colleges Can Save Thousands a Month With Four Simple Payroll Changes

Payroll can be expensive for organizations, including colleges and universities. But there are easy ways to save money.

 

The operational challenges colleges and universities face include hiring and managing faculty and staff, giving their students the very best experience and education, and keeping on top of the various rules and regulations they have to adhere to. And they have to balance all of that while maintaining a budget.

While the Consolidated Appropriations Act (CAA) provided an additional $22.7 billion to the aid already provided under the Coronavirus Aid, Relief and Economic Security (CARES) Act to colleges and universities, many colleges are likely to be still seeing gaps in their budgets.  

Payroll is an essential function for colleges, but the costs can add up if you’re not strategic about processes. Luckily, there are various ways to cut costs without reducing your employees’ satisfaction, engagement, or productivity.

 

Consider Going Paperless

By eliminating paper checks from your payroll, you can save a considerable amount of money. Instead, make payments by direct deposit or prepaid payroll cards. According to NACHA, checks cost $1.22 on average, while ACH payments have an average cost of $0.29 per transaction–a 320% difference!

The technology is there to move from a paper-heavy process, and doing so will save you money in terms of printing and the person-hours that go into manual paycheck processes. But more than that, it will give you a streamlined, more secure pay run that’s also better for the environment.

College faculty and staff will appreciate the lack of paper involved, being able to access their paycheck information online, and not having to wait for printed check runs or take checks to the bank. You could also look at adjusting other functions within your payroll department with the aim of going paperless—timesheets, for example.

 

Reduce Your Pay Cycle Frequency

How often do you pay your staff? Weekly? Biweekly? Monthly? For many colleges, with faculty and staff on different types of contracts, it may even be different pay frequencies. Reducing pay frequency, perhaps from weekly to monthly, and aligning when you pay different members of staff make payroll more efficient and save money.

There are two important factors to consider here. First is your faculty and staff—they have to agree to the change. Changing pay frequency would amount to a change in their employment terms, and would have to be agreed with them before you can implement it. It won’t necessarily be an easy change for them, either, as not everyone on weekly pay would be financially comfortable enough to suddenly budget for monthly pay. 

Consider what might make your staff more amenable to reducing pay frequency, what could you do to help ease the transition between two pay frequencies?

The second potential roadblock depends on where your college is, as you’ll need to follow federal and state payment laws. Most U.S. states require a minimum pay frequency, so while you can pay more frequently, you can’t go less frequently than your state’s minimum.

 

Outsource Your Payroll

Outsourcing is an established method of saving money on business processes. While you do pay for the service of an external payroll company, the money you’ll save on internal payroll processes will more than make up for it.

You’ll have access to specialist staff working on your college’s payroll, saving you money on all the expenses you’d have employing a payroll team directly—things like recruitment, tax, paid vacation time, and office costs.

 

Aim to Lower Employee Turnover

An employee resigning means you have to advertise, interview, and hire to fill their role. The cost of hiring a new employee is high enough, and the time and resources taken to set them up to be paid really hits payroll costs.

Since 2021’s Great Resignation, 11 million people (and counting) have quit their jobs. By reducing turnover as much as possible, you’ll be saving money overall. But how?

It’s important to consider all members of staff, from faculty to administration to technical and more. Aim to increase engagement and job satisfaction by rededicating your organization to a unified vision. Remind them of how important their role is to changing students’ lives, and make sure your employees have the tools and resources they need. Add professional development investments to your budget if you can.

An easy way to retain your talent, and one that  has multiple benefits for you, is to give out reloadable, branded payroll cards to employees and even contractors, to make sure they feel like part of the college “family”.

In addition to the benefits that payroll cards provide to Universities and their employees, Prepaid Technologies offers a comprehensive suite of payment solutions that range from Per-Diem cards for your Athletic Department partners, to Purchasing and Disbursement cards for incidental expenses and payments across campus.