Meaningful Metrics and ScorecardsKelley Rousayne
About Ascentis Our full suite of workforce solutions helps keep you compliant, productive and profitable. We focus on automating the complexity, so you can focus on the things that require a human touch.
ASCENTIS PROVIDES:• A-la-carte HR technology• Industry-leading time & attendance• Unsurpassed support
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CREDITS / QUESTIONS TOPIC SPEAKER
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CREDITS / QUESTIONS TOPIC SPEAKER
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Today’s Speaker
Kelley Rousayne serves as the Global Time to Pay Practice Leader at The Hackett Group. In her role she helps organizations with payroll and workforce management strategies, best practices, and research. Kelley has over 15 years' experience in Shared Services, working in Accounting, Accounts Payable, and Payroll. Prior to joining The Hackett Group, she was a Global Payroll Lead responsible for all US payroll operations for approximately 140,0000 employees. She has led onshore and offshore teams who provided support for payroll tax, garnishments, payroll & workforce management technology, productivity reporting, and other payroll services.
KELLEY ROUSAYNE
7© 2021 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
Quantified fact-based approach to driving business performance improvement initiativesThe Hackett Group Difference
Hackett has empirically defined Digital World Class
Hackett’sintellectualpropertyexplains how toclose the gaps
BUSINESS VALUE(effectiveness)
• Better alignment to business needs• Access to the right information at the right time• More engaged and agile workforce
OPERATIONAL EXCELLENCE
(efficiency)
• Lower costs• Higher productivity• Simpler technology landscape• Higher transaction automation levels
93% of the Dow Jones Industrials
91% of the Fortune 100
96% of the Dow Jones Global Titans
39,295
19,978
2,000
700+
330
30+
Performance metrics
Benchmarking studies
Best practices
Process maps
Implementation and configuration guides
Best practice scorecards
OperationalExcellence Leaders
Business Value Leaders
Peer
1Q
1Q
Busi
ness
Va
lue
Operational Excellence
DigitalWorld Class
Business Value = Effectiveness, Experience, Digital Business EnablementOperational Excellence = Efficiency, Business Process Automation
8© 2021 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
Membership-based advice to Process Owners to solve the issues you face in transforming your function and improving performance by leveraging our unmatched intellectual capital and our large experience in driving change
Membership Services:– Senior Advisory Consultation– Unlimited Inquiries– Performance Studies & Metrics– Thought Leadership Research– Accelerator Tools – Webcasts– Annual Leadership Forum– Peer to Peer Interactions
Global Time to Pay Advisory Payroll Transformation Workforce Management Transformation
Three ways to partner with Hackett to achieve your Global Time to Pay Strategy
Hackett’s Global Time to Pay Offerings
Full payroll system transformation approach led by seasoned experts utilizing IP based process based on industry best practices.
Offerings– Current State Analysis– Global Payroll Strategy Design– Vendor Selection– Solution Design– PMO Support– Change Management– Operational Optimization / Remediation– Digital (Robotics, Chat box, etc.)– Benefit Case / Business Case– Emergency Payroll Management /
Operational Support
Full workforce management system transformation approach led by seasoned experts utilizing IP based process based on industry best practices.
Offerings– Workforce Management Strategy Design– Design Workshops– Vendor Selection– PMO Support– Change Management– Review current state operations for
improvement opportunities– Best Practice Evaluations
9© 2021 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
For payroll organizations to gain efficiency and effectiveness, they must focus on the costs and improve the end-to-end process. In order to accomplish this, payroll leaders must track and report performance. Most organizations do not have a global scorecard. While
some metrics are tracked, not all metrics are reported in a scorecard to the operations and leadership teams for all locations. Most have an opportunity to increase scorecard automation.
Many are still completed manually in Excel or fragmented data is loaded to reporting tools. Many plan to automate the creation of their scorecard in the next 12 months. Many organizations are reviewing the metrics within the
scorecard, including how to add more metrics around employee experience.
Payroll Scorecard: How Do You Measure Up?
Source: The Hackett Group, Payroll Scorecard Quick Poll 2021
Quick PollPlease take a moment to answer the quick poll. You must participate for APA credit.
Do you have a payroll scorecard?
Yes, it covers the entire organization Yes, it covers part of the organization (US
Only) No
11© 2021 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
What respondents told us about their scorecards
Source: The Hackett Group, Payroll Scorecard Quick Poll 2021
Integrated with HR
Majority of payroll scorecards are not
integrated with broader HR scorecard
Most reported that Time and Attendance metrics were not included their
payroll scorecard
Most plan to automate the creation of the scorecard
in the next 12 months
Most plan to update their scorecard in the next 12
months
Includes Time & Attendance Metrics Plan to Update Metrics
Plan to Automate Scorecards
12© 2021 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
Hackett defines three E’s of value
ExperienceEfficiency Effectiveness
Minimization of costby optimizing resource
productivity and eliminating waste
Maximization of business value
by aligning services with defined business needs
Optimization of relationship value
for employees, customers and suppliers
Source: Hackett Research
These three categories summarize different ways Payroll creates value
13© 2021 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
Cost per pay slip Cost per employee Payroll FTE Per 1,000 % time spent on transactional
and technical activities Cost of tax penalties
Efficiency Effectiveness Employee Experience
A balance scorecard will measure both efficiency and effectiveness.Metrics That Measure Efficiency, Effectiveness, and Employee Experience
Source: The Hackett Group
Payroll Accuracy Rates Number of Off Cycle
Payments Percentage of employees on
direct deposit Percentage of employees
receiving checks Payroll accounting error
percentage
Satisfaction Survey Results Percentage of Requests
Made Via Self-Service – Schedule availability– Request for time off– Scheduling changes (shift
swap, vacation, sick, etc.) Percentage of Mobile
Adoption
14© 2021 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
Rank Top uses for analytics within
payroll department
Key Metric DescriptiveWhat happened?
DiagnosticWhy did it happen?
PredictiveWhat could happen?
PrescriptiveHow do we make it happen?
1 Improving accuracy rates
Payroll processing
accuracy rate
• Percentage of accurately processed transactions.
• What caused the inaccurate transactions?
• What alerts can be put into place to allow correction prior to the inaccurate process?
• What will cause the accuracy rate to decrease over time?
• Will increase staffing increase accuracy?
2 Monitor compliance Tax Penalties per Entity
• Dollar amount of tax penalty payments per entity.
• What was the cause to the tax error? Was the configuration accurate?
• Reviewing potential law changes, what is the impact to the tax payments?
• Scenario evaluation of tax changes and policy updates that impact the organizations tax liability.
3 Financial cost analysis
Total cost per employee
• The total cost of payroll divided by the number of employees.
• What is the cause of total cost to be higher or lower than budget?
• What is the impact of brining in additional regions to the centralized payroll model?
• Will an increase of smart automation across the payroll process decrease overall costs?
Total cost per pay slip
• The total cost of payroll divided by the number of pay slips issued.
• What is the cause of total cost per pay slip to be higher or lower than budget?
• What will the total cost for payroll be for the upcoming 12 months?
• How is the cost impacted when moved pay cycles?
• By changing pay frequency and processes while increasing automation, will total costs decrease?
4 Overtime analysis Overtime as a % of total hours
• Number of overtime hours as a percentage of total productive hours.
• What is the cause of overtime?
• Which business units have high overtime?
• What is the organizations projected overtime based on current production volume forecasts?
• If sales volumes are increased, will overtime hours be increased?
5Proactive payroll
error correction and accuracy
Percentage of off-cycle
payments
• Number off cycle payments compared to total payroll payments.
• What is the root cause of the off-cycle payments?
• Advanced visualizations of payroll errors and alerts of missing entries.
• Forecasting of payroll off cycle payments and costs, reduction of errors through optimization projects.
Better Application of Key Metrics
15© 2021 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
Quick PollPlease take a moment to answer the quick poll. You must participate for APAcredit.
What types of metrics are included in your scorecard? (select all that applies)
Timeliness
Accuracy
Costs
Employee experience
We do not have a scorecard
16© 2021 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
Cost of unscheudledovertime
Actual vs scheduled time
Cost of overtime(planned, unplanned,
avoided)
Cost of tax penalties
Cost per employee
Payroll FTE per 1,000
Cost per pay slip
Cost per offcyclepayments
Currentlyreported
Plan in the next12 months
No plansto report
What is measured on a scorecard varies by organization. Majority of participants noted cost is measured but may track it differently.
Costs Metrics: Future & Planned
Source: The Hackett Group, Payroll Scorecard Quick Poll 2021
17© 2021 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
Percentage of approvedtimecards
Percentage of timecardsapproved by manager/supervisor
Percentage of manualpunches/punch corrections
Payroll accuracy
CurrentlyReported
Plan in the next 12 months
No plansto report
There is an opportunity to improve review and approval practices to reduce payroll input errors.Quality Metrics
Source: The Hackett Group, Payroll Scorecard Quick Poll 2021
18© 2020 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
Accuracy
99.83%
99.97%
Payroll Accuracy
Source: The Hackett Group, 2020
Non-Top Performer Top Performer
Payroll Accuracy Defined
((A – B)/A) Where:
A= the total number of payments processed during the measurement period
B = the number of incorrect payments during the measurement period caused by supplier error (processed as received)
Pay Slip Accuracy Defined
((A – B)/A) Where:
A= the total number of payments processed during the measurement period
B = the number of incorrect payments during the measurement period caused by any error (supplier or payroll input)
19© 2021 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
Percentage of mobile usage (download of app)
Percentage ofelectronic pay
Percentage ofelectronic pay slip
Percentage of requestsmade via self-service
Satisfaction surveyresults
CurrentlyReported
Plan in the next 12 months
No plansto report
Balanced scorecards include employee experience metrics. Payroll leaders are adding more employee focused metrics to the scorecard.
Employee Experience Metrics
Source: The Hackett Group, Payroll Scorecard Quick Poll 2021
20© 2021 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
Quick PollPlease take a moment to answer the quick poll. You must participate for APA credit.
How would you rate the process and policy standardization at your organization?
Poor Average Highly standardized
21© 2021 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
What challenges does your organization face with scorecards?
Source: The Hackett Group, Payroll Scorecard Quick Poll 2021
Cost/expense of measurement
Data should be easily accessible. Lack of harmonization and
standardization increases cost to report.
Data should be consistent across regions and applications. Data
mapping makes reporting more difficult.
Global standardization helps organizations
maintain data quality.
Metrics should alighn with business objectives.
Metrics that do not alighn should not be reported.
Lack of harmonization of data (data across
systems)
Metrics do not align with business objectives
Lack of data standards
22© 2021 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
Scorecard Challenges
Source: The Hackett Group, Payroll Scorecard Quick Poll 2021
1 Lack of harmonization of data (data across systems)
2 Inability to compare metrics to benchmarks
3 Lack of data standards
4 Cost/expense of measurement
5 Metrics do not align with business objectives
6 Lack of training for business users to understand and act on scorecard metrics
7 Inadequate skills to create metrics/scorecard
8 Metrics reported are not actionable
9 Our organization has too many metrics
23© 2021 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
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Establish the criteria, including audience (leadership or operational). Ensure it meets business objectives, goals, and other criteria.
Evaluate availability of data (volume, costs, etc.) needed to create metrics.
Select platform for displaying and distributing scorecards (i.e. Power BI, MicroStrategy, or dashboard tools).
Create scorecard and monitor metrics.
Train users on how to action against the meaningful metrics.
DesigningScorecards
Designing a Global Time to Pay Scorecard
24© 2021 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
Considerations
Who is the audience?– Leadership or operational?
What are you measuring?– Link metrics to specific business outcomes.– Impacts both efficiency and effectiveness.– Should consider quality, timeliness, productivity, cost, and employee experience.
What are you trying to accomplish with the metrics?– How does the user action against the data?
What story do the metrics tell?– Is it indicative of your organization?– Do the metrics tell a comprehensive story?– Who is the audience?
Cost is important, but payroll’s performance is about more than cost!
25© 2021 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
Link the metrics to business outcomes
Recommendations for Analytics, Metrics & Scorecards
Target the metrics to specific audience
(operations vs leadership)Limit the number of metrics
Determine how metrics will be aligned (business unit or
function)
Metrics should be actionable
Educate and train leaders on how to use the metrics
Compare metrics to benchmarks
Review trends and evaluate metrics
26© 2020 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
Atlanta | Chicago | Frankfurt | Hyderabad | London | Miami | Montevideo | New York
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Kelley RousayneSr. Director, Global Payroll Advisory Practice Leader
+ 865 607 7183 | [email protected]
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Workforce Solutions for Demanding Work Environments
Our full suite of workforce solutions helps keep you compliant, productive and profitable. We focus on automating the complexity, so you can focus on the things that require a human touch.
• Maintain detailed timecard and related records, for as long as required under the FLSA, or indefinitely.
• Apply flexible and configurable rules for breaks, overtime, etc., including by state
• Federal, state, and local tax filing services and flexible employee check options
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Appendix
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The Hackett Group would like to understand the level of adoption of earned wage access and financial wellness programs to employees.
Participate in this Earned Wage Access (OnDemand Pay) poll and learn:
• The adoption rate of earned wage accesses among peer organizations
• Allowance usages• Considerations for implementing Earned Wage Access
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Our assessment provides an insight into your organizations current digital state, highlighting improvement opportunities.
The key outputs of the assessment tool include:• High level heatmap• Automation level• Data quality levels
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