HRO Today July/August 2015 - 47

Tech Perspective
analyzing the expected return on investment (ROI)
for the solution. The foundation begins with a clear
understanding of the pain points involved in processing
the payroll. From there, the business case can be based
on credibility.
Understanding Payroll Pain Points
When processing employee payroll, there are four main
obstacles that organizations often encounter:
1. Payroll errors. In many cases, payroll errors are difficult
to measure. A company's error rate could be anywhere
from 0.2 percent to almost 2 percent of total payroll.
Inaccuracies come in a wide variety of ways: erroneous
deductions, incorrect timesheets, miscounted overtime
or holiday pay, tax withholdings, or wage garnishments.
Reducing the likelihood of any of these errors is
considered a hard cost savings.
2. Payroll productivity. To calculate the total amount
of time payroll process requires, look at gross data,
including hourly employees, and the time it takes to
close out the payroll period and generate reports.
Automation is likely to reduce this time as well as selfservice
processes that can eliminate employee questions
or concerns. When determining the ROI, be sure to factor
in both of these processes.
3. Cost of payroll. What is the cost of running payroll
today? In actuality, payroll incurs many costs: software,
hardware, in-house printers, tax accountants, IT time and
more. This is a hard cost that needs to be accounted for
when calculating the benefits of the new solution.
4. Compliance risk. In addition to fees and penalties
resulting from incorrect tax withholdings, if the time and
attendance system is not in sync with payroll, wage and
hour issues and employee misclassifications can arise.
It can cost organizations thousands of dollars if current
systems don't properly define wages, hours, employee
classifications, and tax filing rules.
Developing an Action Plan
After identifying the pain points of processing the
payroll, four primary objectives help drive an action plan:
* Use an effective calculator. ROI stands on one leg:
credibility. If the ROI isn't credible to the C-suite, it will
do more harm than good.
Nucleus Research has
found that workforce
management-including
time, attendance,
scheduling and labor
planning-pays back
$10.99 per $1 invested.
* Look for other savings. With SaaS solutions, adding
modules is relatively cheaper than it would be for
legacy, on-premise solutions. Organizations can gain
a great deal of efficiency by automating time and
attendance and ensuring very tight integration with
payroll. Nucleus Research has found that workforce
management-including time, attendance, scheduling
and labor planning-pays back $10.99 per $1 invested.
Opt for a system that has one database and a single
rules engine governing time and attendance.
* Engage stakeholders who will help defend the analysis.
It is critical to make sure that HR, payroll, and benefits
all buy into the potential cost savings. In a presentation
to the C-suite, a united front will go a long way. And,
if time and attendance or workforce management is
part of the evaluation, collaborating with operational
leaders or managers is key.
It might cost the payroll department too much time
and resources to get the gross-to-net-to-zero processed
accurately and compliantly. SaaS-based solutions offer
cost-saving, compliance, and risk-reducing advantages
that do what payroll needs to accomplish most-
compensate employees correctly and on time.
Jayson Saba is vice president of strategy and industry relations at
Ceridian.
JULY/AUGUST 2015
| www.hrotoday.com
[47]
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HRO Today July/August 2015

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