By Dean Goodman - Senior Program Manager, Global HR & Payroll Practice, Spencer Thomas Group
Have you ever wondered how to remove complexity from payroll? Have you ever wondered about program management and what it really means? I’d like to discuss these topics here because it’s something that many clients seem to struggle with. Let’s start with what drives that complexity in the current environment. One of the primary goals of program management is providing visibility to the program components.
So let’s dig in… Key to understanding a payroll program is knowledge of end-to-end payroll processes. Ask senior management “What makes payroll complex?” and you’ll probably get different answers than if you ask the payroll team. For the payroll team the answer is not likely to be the payroll process itself. Gross-to-Net calculations are fairly routine. The day-to-day complexity of payroll is driven mostly by factors internal to the organization – examples include basic business decisions such as pay frequency and timing, or more complex things like the data granularity needed to support payroll accounting, the number of off-cycle payroll runs needed to correct errors or the technical interfaces to and from the payroll system itself. Want more examples? How about collective bargaining agreement work rules, garnishment processing, third-party vendor payment remittance or stop payments on payroll checks with subsequent reissue, or overpayment recovery, or… The list is long.
The key to reducing this complexity, or striving for “Strategic Simplicity” in payroll, is to first know what makes your environment complex and using that information to simplify the business processes specific to your organization. It’s important that responsibility for the program lies with the business function where payroll resides – typically HR or Finance. The saying “Sunlight is the best disinfectant” comes to mind when examining business process inefficiency, and that applies just as much to payroll as it does to anything else. Think of program management as the sun.
Fundamental program management is about identifying the scope, scale and communications necessary to successfully deliver service. Let’s face it, payroll is reactive. It’s rarely a consideration when business decisions are made. This is not to imply business decisions need to be made with a payroll focus - payroll is usually an unidentified stakeholder (or it’s lumped in with HR or Finance). Effective program management provides a mechanism to increase awareness across the organization. Is the Sales department looking at a new incentive plan? Is the organization acquiring a competitor? Is HR looking to implement a new Time Off policy? Are the factories implementing a new timekeeping system for the hourly workforce? Are you about to renegotiate a union agreement? These are all business issues that will likely require changes to payroll – or at least analysis to determine if changes are needed.
Program Management requires planning, and planning requires time. Much of the complexity in payroll, when you look into the root cause, can be attributed to a lack of time available to remove it. Remember, payroll is always “on”. When one pay cycle ends the next cycle begins. There is rarely time to change business process mid-stream absent a separate business driver. Once introduced, complexity becomes permanent, BUT can be changed! Program management is sounding pretty good right now isn’t it? But, there’s more… Another benefit of Program Management is the governance function. When complexity is identified, governance provides a mechanism to introduce the process improvement opportunity separate from the “business as usual” activities of the payroll team.
Regardless of how your organization views payroll, it’s a business function that affects every employee and area of the organization. Whether it’s viewed as an investment or expense, applying program management discipline ensures maximum return on the investment or minimizes the expense. Want to learn more about how? Contact Spencer Thomas Group (STG), a Professional Services firm that delivers comprehensive business solutions worldwide. Whether it’s HR Systems, Payroll Solutions, Business Process Transformation, Organizational Change Management, Enterprise Applications, IT Strategy, or Program and Project Management, STG applies the right subject matter expertise to address your business needs.
Bio: Dean Goodman is a Senior Program Manager in the STG Global HR and Payroll practice with 25 years of information technology and human resources experience. Dean works with senior leadership in assisting organizations through the evaluation, selection and implementation of HR systems & third-party support agreements.
Contact us for more information:
Chris Klein, Senior V.P for Global HR & Payroll Solutions, is responsible for the Global HR and Payroll Solutions for STG.