HRO Today April 2014 - 24

Payroll
a company's pay data-assuming it is high quality, accurate
data-and learn all sorts of things, " says Michael Custers,
senior vice president of global marketing in the Atlanta
office of NGA Human Resources, a global payroll BPO
provider.
According to Custers, payroll accounts for roughly 75
percent of most companies' total business expenses (just
add up wages, payroll taxes, benefits, training, and so
on). By comparing overall payroll costs to sales, profits,
and other metrics in a particular region or across different
job positions, companies can yield ways to generate more
revenue per employee-increasing incentive pay where it
will provide the biggest bang for the buck. " You can look
beyond the transactional data into how your overall reward
compensation strategy is actually performing, " Custers
explains. " There is a repository of amazing insight here. "
This repository can be the foundation for a company's
talent management goals. By knowing that employees
in a certain region are underperforming their peers in
another region, even though the incentive compensation
is the same across regions, it may indicate a need for more
targeted employee training, better managers in a region,
or a different rewards program.
" If your payroll process isn't connected to other
performance technology systems, you can't provide
an effective performance-based rewards program, "
Custers says. " If the incentives aren't driving measurable
performance, this can have adverse bottom line
consequences. "
Like NGA, ADP also is mashing up payroll data with talent
management information to produce pay-for-performance
calculations for clients. The firm analyzes current payroll
data and compares it to past statutory reporting periods
to show clients how the mix of compensation is changing,
i.e., base pay versus variable pay. These changes can be
contrasted with corporate performance in a specific region
to indicate whether monetary rewards or non-monetary
rewards are more effective in driving profits. " It gets
clients really excited when we show them we can do that, "
Weinstein says.
CloudPay is similarly mining client payroll data to help
clients ascertain the productivity of specific employee
groups across different regions of the world. The
Southbury, U.K.-based global payroll services provider
[24]
HRO TODAY MAGAZINE | APRIL 2014
compares the wages for a particular job position in, say,
Budapest, to the revenue produced by the company in that
country. It subjects other regions in which the organization
operates to the same tests, and then compares the findings.
" This information can guide vital decisions on where the
company may want to grow and where it might want to
pull back a bit, " says Sheri Sullivan, CloudPay vice president
of global business development.
By further slicing and dicing this data for the client, it
may discern a need to move skilled employees from one
region to the next. It may even determine that particular
nearshoring and offshoring labor decisions have run their
course, and that more effective means of deploying labor
are now required in different countries. " We can even
compare the effectiveness of different types of employee
benefits, by aggregating and integrating payroll data,
benefits data, and performance data for comparison
purposes, " Sullivan says. " You could never do that before. "
What other nuggets of information are buried within
payroll? A lot, it appears. Since payroll data often contains
an employee's date of birth, ADP has been able to extract
compelling findings suggesting that 19 percent of the U.S.
workforce is nearing actual retirement age. " We don't
mean the typical statutory age of retirement like 65 or 66
years of age, but the age at which many people actually
retire, which is closer to 60, " Weinstein explains.
Perhaps best of all, specialized payroll providers can
aggregate all of their clients' payroll data, and by applying
unique algorithms, these data sets glean all sorts of
industry-wide performance information. " A provider in a
SaaS (Software-as-a-Service) environment can anonymize
and amalgamate payroll data across many different
companies in a vertical to obtain rich analyses on their
overall (labor) costs versus performance, " says Karen
Paterson, CEO of global payroll services provider Acrede.
" We can then extrapolate from these findings to provide
value-added consultative services. "
Clouds Above the Globe
The ability to provide this strategic value depends on the
providers' global breadth, data analytics capabilities, and
cloud-based platform. Fortunately, each of these is a trend
in payroll services.
Globalization of payroll is made possible by providers
working with local client payroll staff and/or shared

HRO Today April 2014

Table of Contents for the Digital Edition of HRO Today April 2014

HRO Today April 2014 - 1
HRO Today April 2014 - 2
HRO Today April 2014 - 3
HRO Today April 2014 - 4
HRO Today April 2014 - 5
HRO Today April 2014 - 6
HRO Today April 2014 - 7
HRO Today April 2014 - 8
HRO Today April 2014 - 9
HRO Today April 2014 - 10
HRO Today April 2014 - 11
HRO Today April 2014 - 12
HRO Today April 2014 - 13
HRO Today April 2014 - 14
HRO Today April 2014 - 15
HRO Today April 2014 - 16
HRO Today April 2014 - 17
HRO Today April 2014 - 18
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HRO Today April 2014 - 21
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HRO Today April 2014 - 24
HRO Today April 2014 - 25
HRO Today April 2014 - 26
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