Case Study

Large New England based University seeks HCM / Payroll Assessment and Business Process Redesign Services

  • Management of HR / payroll function is new; client begins to see small indicators of a potentially larger problem with the organization.  Concerns that the issues may be within the way payroll is processed.
  • Needs to have a neutral 3rd party come in and perform an unbiased assessment of the HR and Payroll functions and processes.

Expected Outcomes of the Assessment:

  • Identify upgrades to systems environment to leverage technology
  • Highlight areas to streamline and optimize processes resulting in maximizing productivity and quality
  • Reducing cost
  • Enforcing compliance and organizational HCM policies and government regulations
  • Preventing fraud
  • Identifying opportunities for enhanced audits and controls
  • Identifying opportunities for enhanced analytics and reporting
  • We approached the client assessment with expectations surrounding key payroll components; understanding the current vendor, size, type and complexity of the organization, staffing needs, and the issues presented for consultative review
  • We contrasted these expectations against industry bench marking, typical payroll functional management and compliance standards; in turn reporting any gaps in compliance, process and deviations from the norm
  • During the assessment we focused on the current year and the current process, with no look back
  • We conducted individual and groups interviews of key personnel in HR, Benefits, Payroll, Finance & IT including a shadowing of resources within the Payroll department throughout the full end to end payroll process.
  • Analyzed key documentation of configuration, registers, supporting standard operating procedures; looking for defects in the stated process and expected compliance
  • Benchmarked current environment against best practices
  • Recommended options for any improvements will be presented through a SWOT analysis
  • Findings will include recommended options to improve accuracy and efficiency through process and systems changes

Sampling of Assessment Findings:

  • Client had very limited Payroll Engine functionality using existing vendor’s solution (in-house payroll processing), creating extensive and multiple point ripple affect.
  • Client was running 6 pay cycles (2 biweekly and 4 monthly groups) with multiple off cycle checks and frequent overpayments.
  • Attendance process is manual, including paper forms and dual entry.
  • Time collection solution is not meeting the needs of all hourly employees, 200 ee’s still submit manual time cards, server time entry is not considered compliant in some jurisdictions.
  • Best practice audit controls are not standard practice.
  • Manual entry of HR & Payroll data concentrated in Payroll.   Human resource paper forms interoffice mailed, multiple copies often received and sorted through.
  • Manual Tax Filing & Deposit, requires a .50 FTE by keeping this a manual and in-house process, and multiple flaws in this process were discovered leaving the client vulnerable to non-compliance.
  • No ability to perform workforce planning of dynamic business needs  (integrated time collection, absence mgmt, & scheduling)

Solutions Recommended:

  1. Consolidate the 6 pay frequencies to 2 Bi-Weekly frequencies (one non-exempt, one exempt), and alternate weeks to normalize processing work in operations.
  2. Because the maturing business needs are not being met by current HR/Payroll technical environment, and because the current processes are time consuming, limiting additional value, the client needed to select and implement an HCM, Payroll and Time & Labor integrated architecture systems, where the system augments the operational team.
  3. Current process/practices should grow incrementally.  Holistic roadmap should be developed that positions HR/Payroll as strategic business partners instead of processors.
  4. Manual processes and multiple handoffs introduce non compliance and payment risks.  Systemic workflow, up-streaming entry and transferring compliance risk (ie., tax filings and deposits) to an outsourcer.

Equipped with specific recommendations for process improvements, four immediate changes were able to be implemented:

  • Client contracted with an outsourcer for Tax filings and Deposits services.
  • Client began a vendor evaluation and selection process to replace the HCM, Payroll and Time & Labor systems.
  • Consolidation step: Harmonization of 6 pay frequencies into 2.
  • Up to date documentation on system requirements and critical design specifications were readily available to the deployment team based on the assessment.  This significantly streamlined a large portion of a complex deployment phase.