Eliminating errors in the payroll and personnel administration process is consistently rated as a top goal among employers that we talk to. Unfortunately errors are often categorized as "so-and-so's mistake" and efforts are made to double check the results next time or to just be more careful.
In an interesting and illuminating study by The Hackett Group called "Workforce Management and Payroll Performance Studies" and published in the APA magazine PayTech, February, 2010, points out that Top Performers (the top statistical group with respect to efficiency and effectiveness in the payroll process) focus on root cause of errors rather than temporary fixes. And the top three root causes for payroll adjustments that occur due to time collection errors are 1. Validation at the source 2. Greater accountability of frontline managers and 3. a streamlined process of employee data maintenance between HR and Payroll administration.
In short, automating time collection the right way can lead to a dramatic improvement in your payroll performance and drive a significant number of errors out of the process. Put another way: Using a time and attendance system can help HR and finance managers get what they most want - fewer mistakes.
The article goes on to add an interesting perspective on what makes this strategy so effective: automating the time-to-gross process "streamlines the end-to-end process, resulting in more touch in operations and less touch in corporate payroll. The higher touch model in operations ensures accountability and leaves the decision making in the hands of those who are closer to the details, thus more qualified to make decisions." By pushing responsibility back out to operations, where this stuff happens, payroll administrators can actually improve their results and focus on higher level tasks. Wow.
So how does a small to mid-sized organization do this? By deploying a modern day time and attendance system. It's funny, even to this day, at the end of 2011 we find companies that when we talk to them about Time and Attendance, they respond with something like "You mean punch clocks?" Well, yes.... and no. The hardware has come a long way since this blogger punched in and out of his job as a grocery bagger using a paper punch card. Time clocks today come in a variety of forms, all electronic, including hand and finger print readers, proximity readers, web entry with IP address restrictions, telephony, and on and on. Finding the time entry device that works for you is just the start.
The truth is it's the software that the hardware connects to that makes the difference. The right hours are captured for the right employee, reviewed and approved by the right manager, and flows in to the right payroll and HR record. In addition, decisions about time off requests and schedule changes are made by the right person with the correct and up-to-date information. Better accuracy and better decisions - sounds pretty good.
Let's be clear. There is a lot that can be accomplished beyond reducing errors when deploying time and attendance in your organization. Doing it right can help you enforce your workplace policies evenly and fairly, stay compliant with state and federal labor rules, manage and reduce overtime, manage attendance and schedules, and of course make your payroll process more efficient and reduce costs.
But lets pull this back around to the idea of reducing errors. Automated time and attendance can reduce errors - one of employers' highest stated goals - by eliminating data entry errors, of course, but also by pushing the ability and responsibility back out to operations where the action it is happening, and out of the administrative department that usually has to deal with the information after the fact and from a position where they can not see what is happening (Did John really work 10 hours that day? When Linda clocked in late was that because she forgot or because she was late?) And finally by making sure that the data in the time and attendance system is in sync with (hopefully real time) or the same as data in the HR and payroll system, corrections, misunderstandings and re-work can be avoided.
The good news is that being a Top Performer actually isn't that difficult. It just takes a little automation and a clear understanding of where errors come from. Getting rid of them turns out to be a snap.
