Businesses of all sizes are facing continued economic uncertainty, and payroll technology can help them adapt to new challenges. Many companies are feeling the delayed effects of the U.S. payroll tax legislation that was implemented on Jan. 1, 2013.
Despite continued difficulty, jobless claims reached a six-year low in August, according to Bloomberg. The U.S. Department of Labor reported the number of claims for unemployment benefits dropped by 15,000 to 320,000 in the week that ended August 10. The data suggests employers are letting fewer workers go. In addition to this positive trend, consumer confidence is close to reaching a five-year high, and sentiment in the construction sector is up. After a slowdown earlier in the year, manufacturing activity is picking up again.
"We're probably at the point where we're likely to see some acceleration in the pace of hiring, and that's likely to reflect what we think is going to be a fairly decent growth performance in the second half of this year," said Millan Mulraine, director of U.S. rates research at TD Securities, according to Bloomberg.
Why companies should adopt new payroll software
With hiring expected to pick up through the end of the year, small businesses may not be able to manage payroll on their own. Traditionally, when jobless claims decrease, hiring picks up, but many companies have been reluctant to take on new staff members, Equities.com said. U.S. payroll compliance has put additional pressure on employers, so hiring has not accelerated. In addition, federal budget cuts earlier in the year have slowed employment growth until companies could be sure how the cuts affected business growth. Labor Department statistics have indicated that job growth is less than expected.
Consumer spending is on the rise as well, which could prompt organizations to hire new workers. As companies experience increased demand, they will need to boost hiring to keep the business running. Implementing payroll technology can help companies manage the needs of a larger workforce without hiring an extra employee to handle payroll. The economy has averaged approximately 193,000 jobs per month, which is slower than needed for a full recovery to pre-recession levels of employment, according to Equities.com. However, the smaller number of jobless claims is helping propel consumer confidence and spending.