Oracle’s HCM Cloud Payroll professionals spoke at HCM World 2018 about best practices for making your payroll more strategic using HCM Cloud. These payroll best practices can help organizations bring money back into their businesses, enhance employee satisfaction and gain valuable insight into the management of their organization and payroll.
Bringing Money Back into Your Business
There are a few different options to strategically bring money back into your business. The biggest opportunity to save money would be to take advantage of paperless opportunities. Going paperless can help your organization reduce costs, avoid manual entry errors, reduce physical space needed to store paper forms and increase your security. In addition to paperless opportunities, there are a few other options for bringing money back into your business.
- Paperless opportunities: The most obvious paperless opportunity would be to switch from paper checks to direct deposit. Printing paper checks is costly to your organization. Other forms and payments that could be made paperless in an effort to save money for your organization include pay statements, withholding elections, year-end statements, vendor payments and inbound and outbound reporting.
- Tax credits: Your organization can receive tax credits for employing certain types of employees or working in target areas. For example, if you are employing disabled or unemployed veterans, SNAP (food stamp) recipients, ex-felons, etc., you can reduce your federal income tax liability by as much as $9,600 per employee hired. You can also receive tax credits if your business is located in an empowerment zone or rural renewal county. For more information, visit doleta.gov.
- Employees leveraging tax sheltered elections: Making changes like switching your employees from post-tax medical to pre-tax medical can save both your organization and your employees’ money. For a real-life example of organization and employee savings, check out the full presentation linked at the bottom of this article.
- Reduce payroll frequencies: Different organizations choose to pay at different frequencies—weekly, biweekly, semi-monthly, etc. Biweekly payroll tends to save more money for organizations than other options. Changing the frequencies may make more sense for some organizations more than others, and it is important to be aware of restrictions in certain states and unions that may affect your organization’s ability to change payroll frequencies.
- Reduce customizations: Reducing the number of customizations within your organization’s system will result in less testing and less maintenance, which will help you cut down on costs. An added perk is that reducing customizations will also bring you greater stability within your organization.
Enhance Employee Satisfaction
Another strategic payroll move is to enhance employee satisfaction. As one of our whitepapers puts plainly, effective payroll = happy employees. You want employees to be satisfied with your business both during and after their time spent working for your organization. There are several ways that payroll best practices can help you enhance and maintain employee satisfaction within your business.
- Self-service: You can easily empower your employees to control their information through self-service. Implementing self-service can save your Payroll department both time and money. With self-service, your employees can easily view and submit information regarding their direct deposit, W-2, historical data and more.
- Videos of “understanding your pay:” Embedding informational videos into your system can help your employees better understand their pay and all of the forms they are required to fill out. You can embed videos right into the screen your employees go to when they update their direct deposit or submit their W-2. The more they understand, the more satisfied they will be.
- Offering terminated employees access: A role has been created in HCM Cloud called “Terminated Employee Access.” After your employee leaves the organization, they will still be able to access their historic pay slips and W-2 forms in case they need them for situations like a mortgage verification. They will also be able to change their address, so at the end of the year when you go to send them a W-2, you have the correct address. It is up to your organization to determine how long you grant terminated employees access. Even after an employee leaves, you still want them to have a good experience with your company. Having a way for them to easily access historical information will leave them satisfied after doing business with your organization.
- Offering deductions for charity: There is a feature within HCM Cloud called “My Volunteering” that can track volunteer hours and promote available volunteer opportunities. This can help your organization qualify for prestigious awards, increase your corporate greenness, and engage your employees in community service. Benefits of including volunteering in your organization include attracting new employees and retaining current employees, developing employee skills, strengthening your company and employee brand, and taking care of your employees’ well-being.
- Buy/sell vacation: You could offer your employees buy/sell vacation plans as a way to enhance employee satisfaction. This would allow them to purchase more vacation time if they want/need it. However, if they don’t use all of the time they bought, you’ll end up having to pay it back out.
Insight into Management
Gaining insight into management is another way you can use payroll best practices to become more strategic.It’s important to learn about the role of payroll manager in the Cloud. You can use measurements, automation and dashboards to gain more insight into your organization.
- Measure and report against costs: It’s helpful to collect measurements within your payroll system. You can measure payment counts like total payments, over/under payments, re-issues, tax penalties, etc. and then compare those measurements to benchmarks. From there you can begin equating costs around time to recreate, overtime, penalties, etc.
- Encourage automation: There are several opportunities for automation within payroll. You could automate third-party reporting and payments, checklist and payroll processing, bank reconciliation, and calculations/spreadsheet work. There are several features within HCM Cloud that can help you automate these processes. Automation can help you save time and money as you reduce the manual workload within your organization.
- Provide dashboards and updates as cost decreases: With dashboards, you can track things like labor costs, the number of checks, pay cards, and direct deposits, or the cycle time to resolve a payroll error. Having these metrics in dashboards can help you track, analyze and improve upon important benchmarks within payroll.