PAYROLL BEST PRACTICES
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1 PAYROLL BEST PRACTICES Second to None Practices for Today s Leading Payroll Organizations Dr. Martin Armstrong, CPP, MBA, DBA
2 What Drives You? 2
3 3
4 Personal Vision Statement 1. What am I trying to achieve? 2. How am I going to achieve it? 3. Can progress be measured? 4. What s in it for me? 4
5 THE PERFECT PAYCHECK IS The Right Pay At the Right Price Delivered at the Right Time Lean Labor (2011), Gregg Gordon How can we accomplish this? 5
6 TWC Payroll Journey to Zero It s when the Perfect Paycheck has.. Zero Errors Zero Manual Efforts Zero Non-Value Added Activities Zero Dissatisfied Customers 6
7 Strategic Leadership Model Three Critical Factors of Business Strategy by Jared D. Harris & Michael Lenox 7
8 Payroll Performance Demand Drivers
9 LEAN LABOR Producing the Perfect Paycheck
10 LEAN FLOW
11 2015 Payroll Shared Services LEAN LABOR - Kanban Calendar
12 LEAN LABOR - 8 Wastes of Lean
13 Cost of a Manual Paycheck Cost of a Manual $20 per hour: Total Payroll Wage Expense $25.00* Benefits & 35% $ 8.75 Overnight Shipping $15.00 Misc $10.00 Total Cost per Manual Check $58.75 *Total Payroll Wage Expense Breakdown : Initial Request (15 mins) $5.00 Check Preparation (30 mins) $10.00 Accounting Costs (30 mins) $10.00
14 Paperless Payroll Performance Metrics KEY PERFORMANCE INDICATORS STRATEGIC EXECUTION FOCUS Cost per Paycheck Cost per Off-Cycle Check Cost per Unclaimed Paycheck Cost of Overnight Delivery Expense Cost of Stop Payments Paperless Pay Distribution Rate Electronic Payroll Participation Rate Strategic Vision Corporate Objectives Critical Success Factors Key Performance Indicators Finance Customer People Processes
15 Workforce Management Optimization Use empirical data to make business case decisions regarding: The Forecasting of Overtime Expense for Unscheduled Absences Substantiating Actual Time Calculation versus Rounding Using Automated Work & Pay Rules to Eliminating Manual Calcs Creating a Top 5 List of Labor Cost Reports for Executive Use Creating Economies of Scale and/or Synergies that reduce administrative burdens and cost Considering an Enterprise-Wide Automated Absence Management Solution
16 Workforce Management Best Practices Maximize use of time collection devices Consider overpayment constraints (CA, NY) Use WFM Metrics to measure efficiency Total productive hours / FTEs OT hours paid / productive hours paid Gap between scheduled hours & actual Cost for paying for meals & breaks not taken Vacation hours paid per terminated employee Overscheduled hours % of total hours
17 Where Does Innovation Come From? Invention versus Innovation Seeing Things Differently Curiosity What If? Products/Processes That Don t Work Characteristics of Great Innovators Questioning Conventional Wisdom Vision Problem Solving Passion
18 Critical Thinking Habitually Inquisitive Judge Credibility of the Source Emotionally Intelligent Open and Fair-Minded Clear About Issues Seeks Relevant Data Prudent in Making Judgments Remove Personal Biases Ask Why How can we check, test, verify? What is the Point? What Do You Mean? Ask for an Example How Does That Apply to This? What are the Facts? What Difference does it Make? 18
19 The Process 19
20 Applying Improvement Techniques 1. Eliminate Bureaucracy 2. Value Added 3. Eliminate Duplication 4. Simplification 5. Reduce Cycle Time 6. Automation 7. Training Tools 20
21 Finding the Process Pain Points What Hurts? What Hurts the Most? Processes with Cross Functional Partners Internal & External Manual Processes Source of Errors (root cause analysis) Expertise Organization (desktop procedures) Training Auditing Techniques Efficiencies No Regret Moves Stop Doing List Standardized & Automated Processes 21
22 Plan To Win Your Next Move 22
23 Payroll Best Practices Roadmap Create a Vision Identify Pain Points Communicate Strategy Prepare for Change Pilot Solution Implement Rollout Measure for Results Sustain Momentum
24 TWC Best Practices at Work 4 PMPs 10 CPPs 22 FPCs 2010 Prism Award (Management) 2012 Prism Award (Overall Best Practices) 2013 Hackett Group (World Class Designation) Lean Shared Services (Payroll) 24
25 Obviously, there is little you can learn from doing nothing. - Zig Ziglar
26 effort [ef-ert] /ˈɛf ərt/ noun 1. exertion of physical or mental power: It will take great effort to achieve victory. 2. an earnest or strenuous attempt: An effort to keep to the schedule. 3. something done by exertion or hard work: I thought it would be easy, but it was an effort. 4. an achievement, as in literature or art: The painting is one of his finest efforts. 5. the amount of exertion expended for a specified purpose: The war effort.
27 8 Secrets of Success by Richard St. John 27
28 Closing Thought For The Day The first step toward getting somewhere is to decide that you are not going to stay where you are. -Unknown
29 THANK YOU CONTACT INFORMATION Dr. Martin Armstrong
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