meaningful metrics and scorecards

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.

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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


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


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


What respondents told us about their scorecards


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


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


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


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


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


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



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



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)


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



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


What challenges does your organization face with scorecards?


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


Scorecard Challenges


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


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02

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04

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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


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!


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

Questions?

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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


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

Digital World class HR organizations have 33% lower cost than peers. In order to begin the digital transformation process, organizations must first assess their current state and transform the end-to-end processes.

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

Earned Wage Access Quick Poll HR & Payroll Heat Map Assessment

Open Polls & Assessments

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