Thanks to payroll technology becoming more sophisticated, there's no reason why employees can't access the system to make amendments to their own records. Scott Beagrie analyses what this means for HR and payroll.
As a payroll manager, have you ever thought what it might be like to spend a working day without dealing with an employee request to update their personal details, re-issue a copy of a payslip, or check their holiday entitlement? If you extend this welcome scenario over a period of weeks, months and years, you're envisaging the massive potential of payroll self-service (PSS).
The technology infrastructure and software that enables organisations to implement payroll self-service has been around for more than a decade, with most providers offering a self-service module or facility that can be integrated with a payroll system. But despite the efficiency improvements and cost-saving benefits making it a no-brainer in many cases, some organisations have been slower to implement it than might be expected. There have also been cultural barriers, not least that employees need to get used to viewing their payslip online as oppose to receiving it in an envelope every week or month. But there are signs that payroll self-service's time has come.
According to Tracy Davies, head of sales at Computers in Personnel (CiP), payroll is "definitely one of the hottest areas of self-service". A survey the provider conducted in conjunction with Webster Buchanan Research, revealed that 17% of respondents already provide electronic payslips, and a further 42% plan to do so within the next 12 months, and 32% in the long term. If this proves the case, almost three in five payroll departments will be providing electronic payslips within a year.
Davies reckons the rationale for the high take-up can be put down to cost and quality of service.
"It costs money to print and distribute payslips, and for mid-sized and large organisations that really does start to add up month after month," she explains, but adds that it also reduces the administrative overhead associated with payroll having to handle high volumes of enquiries from employees.
"These are real and measurable costs, and they're avoidable," she says. "Just as banks encourage you to check your account online to reduce the burden on their call centres and branches, so payroll can cut its own overhead by using self-service."
Historically, one of the issues that has held payroll self-service back has been that not all of the workforce would have access to a computer. Organisations always had the option of providing communal kiosks, but the widespread take-up of broadband at home is making it far less of an issue with employees able to access a secure portal anywhere they have an internet connection. In fact, in an increasingly internet-based, 24/7 world, accessing pay details from home could become as natural as banking or shopping online.
Technically, there are few barriers to implementing payroll self-service, and the typical set-up would see employees able to view pay advice and pay history, change personal details, submit timesheets and file expense claims, alongside HR-related tasks such as holiday requests and submitting job applications. Providers are adding functionality all the time to refine their offerings and help employees make the transition. For instance, Ian Brennan, payroll product manager at Ceridian, explains that it has added interactive help functions to explain each part of the online payslip, which helps to reduce the volume of calls to the payroll department.
The software that enables all of these functions could reside locally, or it may be hosted by the provider and be accessed by employees via the internet. Davies says that some of CiP's clients have introduced self-service as part of a move towards a hosted service, making it more affordable as the supplier maintains and upgrades the software. The past 12 months has seen the rise in popularity of the software-as a-service model, which allows organisations to pay for the service via subscription based on the number of users.
While implementing payroll self-service should be relatively straightforward from a technical standpoint, it is important not to underestimate what's required, cautions David Keable, special projects manager at Bond TeamSpirit.
Companies, he says, don't always fully appreciate that the rest of the HR and payroll system infrastructure already has to be in place before it can be made available. They also tend to underestimate the time and effort involved and resources required. "Implementation then doesn't go as well as everybody thinks because they do not put enough dedicated resource into it, which means the self-service aspect always gets pushed aside."
And it isn't just the employees who are empowered by payroll self-service. As well as freeing managers from administrative tasks, it can help them to work more strategically if functionality is maximised. Brennan offers the example of an automated overtime approvals process, which uses workflow to route an overtime request to the right person for sign-off, thus speeding-up the process, increasing accuracy and creating real-time data, he says. "This will then feed in to more accurate reporting."
Davies agrees that self-service applications go some way beyond administrative tasks, and says more organisations are using self-service to manage transactions and workflows in a range of payroll and HR disciplines. In the area of absence management, for instance, CiP has set up a voice recognition-based service, which allows employees to report their first day of absence. The details are logged and this kicks off a series of workflows, explains Davies. Alerts are automatically sent to the employee's manager and HR, triggering support systems and allowing managers to act quickly if they need to find short-term replacements.
Looking ahead, it is likely we'll see self-service HR and payroll integrate more closely, which makes sense from a business and strategic standpoint, given the relevance of the data that self-service applications collect for both sides. It is also important to see self-service in a much broader context. Once implemented and having helped employees make the necessary cultural shifts, its use can be maximised across the organisation, says Brennan, "with self-service functionality being linked to company announcements and RSS (really simple syndication) feeds to help keep employees informed and engaged."
Case study: Browne Jacobson
Law firm Browne Jacobson has realised several benefits after introducing a self-service intranet (SSI) as part of a new integrated human capital management (HCM) system.
The HCM system from COA Solutions is enabling the Midlands-based company to easily store, update, access and process payroll and HR information, improving efficiency and the accuracy of its employee records. By making employee information available electronically rather than storing and processing paper records, it is also helping to boost its green credentials.
In addition, Browne Jacobson has saved time on processing pay changes and adding new starters as this information is automatically calculated and generated from the system at the touch of a button.
"This has reduced the processing of pay changes from 30 minutes per change to just five minutes, relieving the burden placed on the HR department so that they can concentrate on more value-adding activities," says Kelly Tatton, HR systems adviser.
Using the SSI module, employees at Browne Jacobson's three sites can also 'self-serve' to access their personal information, as well as book, cancel and amend holiday requests, which feeds into payroll. The company plans to later extend this feature to allow employees access to information relating to absence and self-certification.
Much of the touted advantages of payroll self-service revolves around its potential to reduce administrative overheads, and there are no shortages of examples. For instance, following the introduction of Bond TeamSpirit's web-based manager and employee self-service modules, online timesheet entry at catering company BaxterStorey saved five administrators a total of 10 days of keying in data.
Another, which is also one of the earliest examples of self-service implementation, is Cisco Systems' Metro tool. Allowing employees to submit their business expenses online, its use reportedly translated into a 96% cost reduction, while slashing the average expense processing time from 21 days to four.