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8 ways for SMBs to navigate payroll, sales and COVID-19 recovery

small business owner looking at tablet

Employees are often the mainstay of small and medium-sized businesses (SMBs). From the smiling cashier at your local hardware store to the homecare aide assisting your elderly neighbor, the small business workforce is as diverse as it is talented. Even as COVID-19 presents small businesses with unprecedented challenges, doing right by their valued workforces remains an ever-present concern for owners and senior leaders.

Now, after more than two months of adapting to pandemic-imposed changes, SMBs and their staff are looking at what’s next for their operations and overall recovery.

Common questions include:

  • What changes are necessary to keep our valued employees healthy and safe at work?
  • How can we remotely manage key employee management functions like hiring, training and payroll?
  • How will financial relief packages and emergency legislation impact our business?
  • What will the unpredictable recovery look like for our industry, region and company?

Ashlee Allen, Senior Manager of Customer Experience with Deluxe, spoke on the topic as part of the Solutions Exchange podcast series.

Amid tough challenges, SMBs show resilience

First and foremost, SMBs should know they are not alone, says Allen. According to the Small Business Administration, there are more than 30 million small businesses in the U.S., defined as those with under 500 employees. These hard-working and growing enterprises are the backbone of the economy, accounting for 65 percent of new jobs. They make up just over 40 percent of private sector payroll, employing almost 60 million people.

These same firms are among the hardest hit by the disruptions stemming from COVID-19. Some of the fallout from COVID-19 includes:

  • Unemployment applications have surged as shelter-in-place orders and temporary closures forced SMBs to furlough or lay off workers.
  • New business applications declined nearly 30 percent in March and April, compared to the previous year.
  • The hospitality and leisure industries saw dramatic reductions in sales, due to social distancing requirements.

Despite these setbacks, SMBs show remarkable resilience. “Even as many businesses across the world are struggling right now, we’re also hearing some really inspiring stories,” Allen said.

Along with customers, the Deluxe payroll team adapts

Allen spoke from her home in Canada, where she’s been working remotely since the onset of the COVID-19 pandemic. Early on, payroll services were deemed essential by the U.S. and Canadian authorities. However, Allen and her team, like the SMBs they serve, needed to transition their operations to a new way of working.

“We needed to make sure we are protecting our employees and we’re putting in place safety first,” she said. Internal teams like IT and telephony stepped up to help Deluxe employees work at home and continue payroll services—uninterrupted—for thousands of customers.

“It’s really a testament to business continuity planning; it’s so critical for any business to be prepared in advance of a crisis,” says Allen.

Eight ways for SMBs to navigate payroll, sales and recovery

Allen shared the following tips for SMBs to navigate their way through the new reality of COVID-19 operations. Employee safety, timely payroll and new ways of managing the workforce are all important as small business leaders plan their next moves.

1. Maintain timely payroll

“You realize at times like this it’s so critical for people to be paid on time,” Allen said. “Maintaining your regular payroll cadence, whether it’s weekly, bi-weekly or monthly, provides security for employees. It’s especially appreciated when so many other elements remain outside our control. Even if checks are smaller due to reduced hours or temporary pay cuts, having scheduled pay dates supports valued staff. “

2. Add options beyond checks

With many jobs shifting from onsite to offsite locations, relying on paper checks for payroll becomes more challenging. Even if your workforce remains on the job, as many essential workers in healthcare and manufacturing are doing, the steps involved with approving, printing, signing and distributing checks are all subject to social distancing guidelines. These could include: operating check printing equipment, handing out checks or even working with executives to sign checks.

“We have a lot of customers who still receive a physical check,” Allen noted. “But companies who sent their workforce remote are no longer able to hand them that check.”

The time is right for SMBs to switch to other methods of payment. Direct deposit via ACH and preloaded paycards are two viable options.

“So many people are used to the ubiquitous deposit straight into your account, but there are some people who don’t have a regular relationship with a bank,” Allen explained.

Paycards are a good choice for staff without bank accounts. Once each employee receives their paycard, employers simply load each pay period’s funds onto the card through electronic means. Employees can access their cash via ATMs or spend at any business that accepts Visa or MasterCard.

For SMBs that work with a payroll service, adding new payment methods is quick and easy. “It’s great to have options that we can provide to a client who maybe wasn’t thinking about that even five weeks ago,” Allen said.

3. Consider a payroll service

SMBs are well-known for doing more with less, in order to reduce expenses and boost the bottom line. It’s normal for owners and staff to wear many hats within the organization.

There are times, however, when outsourcing is the smarter strategy. Adding a professional payroll service not only ensures on-time and efficient payroll processing, it also provides peace of mind for leaders during a busy and stressful time.  A payroll service can ease the workload and offer multiple layers of support for business owners and their workforces.

“It’s one thing we can take off the customer’s plate,” Allen explained. “They don’t have to think about it. They know we’ve got their back; your payroll is going to be made.”

business owner reviewing finances

4. Manage fluctuating staff levels

COVID-19 has triggered a myriad of staffing and payroll changes for SMBs. Most companies are dealing with employee furloughs, layoffs, reduced hours and temporary pay cuts as a result of the economic downturn. However, some are hiring and even raising wages, primarily for essential workers and in sectors like home delivery where demand has skyrocketed. All these staffing and payroll fluctuations require time and attention from SMB leaders.

Employers are also trying to plan ahead and understand the best way to bring back workers as their businesses recover. They’re asking how to hire and onboard new employees when the face-to-face processes of just a few months ago must now transition to virtual experiences.

Allen reiterated that a professional payroll service can significantly reduce the workload involved in workforce changes and overall employee management activities. Your payroll partner can also provide guidance around best practices and state-by-state compliance requirements.

5. Understand emergency relief options

Emergency relief packages are another fast-moving element of the pandemic that SMBs must track. These programs are designed to make sure small businesses can continue to make payroll, despite the economic setbacks of COVID-19. Both the pace and scope of the relief measures are unusual, according to Allen.

“It’s an intense time right now with the amount of legislative changes that we’re seeing both in the U.S. and Canada,” Allen said. “With COVID-19, because of the magnitude of the impact to employees and employers, these have been really quick, big changes.”

Unlike traditional taxation and payroll measures which have months or years of lead time, the new measures took effect almost immediately. American businesses can benefit from the CARES Act and the Families First Coronavirus Response Act (FFCRA); Canadian firms have the Canada Emergency Wage Subsidy (CEWS) Act

“It’s a tremendous amount of information to digest,” she noted. “It’s been a really large call driver with questions from our customers, asking, 'What do I do now? How do I understand these subsidies and implement them?'”

6. Embrace remote operations

With the onset of COVID-19 in mid-March, nearly all office professionals transitioned from onsite to working from home. Now, even with most states and provinces gradually reopening, Allen expects remote work models will continue long-term. “We’re going to see people managed differently,” she noted. “There’s a good chance a lot of employees just aren’t going to come back into an office anytime soon.”

Allen credits these resources for helping her and other employers make the very quick shift.

“It is remarkable across the board to see how quickly not only Deluxe, but other companies, were able to pivot, send people to work from home, get them the equipment and tools they needed so they could continue to provide to customers,” Allen said. Offering tools and information specifically designed to help SMBs manage through COVID-19 can be a valuable service.

7. Prioritize safety as you move forward

Allen recognizes that full recovery will be gradual, with the destination for SMBs not necessarily a return to “business as usual,” but rather a new normal. A focus on employee health and safety will be crucial as business leaders make plans to reopen and return staff to work.

“How do we keep employees safe? How do we continue to adapt? How do we attract talent if staff can’t come back yet?” Allen asked, noting these are common questions as she discusses reopening plans with SMB leaders.

She advises that conditions will differ for each company, based on their geographic location, type of business and other factors. Reopening will likely occur in phases.

New health and safety policies will be essential, both for existing employees and to attract new talent. Payroll systems, including applicant tracking systems and associated technology, can help reduce the effort of managing new procedures. They also show current and prospective employees a company’s commitment to workforce wellbeing and safety.

8. Partner with the right resources

A final recommendation reiterates the importance of outside resources for SMBs.

“Businesses need to ramp-up quickly,” Allen noted, referring to recent conversations with SMB leaders. The right partners can help small businesses work both quickly and effectively, ultimately achieving their goals with less hassle and fewer missteps than moving forward alone.

“I think every single person has been touched by these changes and challenges, but the dedication, resiliency and positive attitude through the teams has just been incredible to watch,” Allen said.

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