Small Business Owners Rethink Payroll Platforms, Seek Right-Sized Solutions

Ninety percent of the small business owners who switch payroll providers do so because they’re dissatisfied with the customer service of their current provider, Shrad Rao, CEO of Wagepoint, told PYMNTS.

“Payroll is a subject matter people don’t know a lot about, usually, so when you put them in environments where they are the ones who have to know everything about the situation, they start getting frustrated by that very easily,” Rao said.

The payroll space is highly regulated, and the government expects small business owners to know everything about it, he added. But just as individuals don’t know everything that’s in the thousands of pages of the tax code, small business owners don’t know everything about payroll.

If their payroll provider can’t handle the call volume, gives incorrect answers or fails to provide personalized service, the small business owner looks elsewhere.

“That’s mostly what it’s about, at the end of the day, how do you feel about this interaction that you’re having?” Rao said.

Integrating Payroll and Time and Attendance

Wagepoint is working to scale its personalized culture in part by focusing on the small business market exclusively. Rao said that’s one of the big things that differentiates the company from its competitors.

The Wagepoint app can comfortably handle up to 200 employees, but a large percentage of its users have 70 or 80 employees, and the company’s bread-and-butter is companies with fewer than 25 employees.

At the same time, the company is growing and expanding its capabilities. On Jan. 12, Wagepoint announced it had acquired Timesheet Mobile (TSM), a provider of geofence-enabled workforce management for small businesses. The company said integrating the product will provide a new solution that gives small businesses payroll and time-tracking in one app.

Embracing Tech in a Very Intentional Way

Rao said Wagepoint doesn’t hesitate to tell larger companies that they should look elsewhere for a payroll solution, because the company wants to maintain its focus on small businesses.

“If you’re a small business owner, we want you to know immediately who your friend in the room is going to be, who’s the one person who is always going to think about you,” Rao said. “Every decision is made from this standpoint, every single decision, whether it’s how our software works, to how our customer service works — everything.”

Wagepoint, like other software companies, has grown during the pandemic as small businesses began working remotely and embracing more digital tools.

“People who are actually succeeding despite all of the challenges are definitely people who are embracing tech, but in a very intentional way,” Rao said. “They’re rethinking everything about their business. The tools that they use, they’re not retrofitting them anymore, they’re intentionally picking them.”