What is in this article?:
- Payroll Management: Cost, Solution and Risk
- Employee Self-Service in the Cloud
Can you say, for sure, that your organization does not overpay to process payroll? Like most sizeable companies, you probably outsourced long ago the job of creating, printing and distributing paychecks. But surely some payroll-related activities stayed behind. It may be worth looking into those. Yours will be out of whack if you've not kept up with technology.
Data from APQC's Open Standards Benchmarking can help you get your bearings. Consider Figure 1. The chart shows all participants in APQC's payroll processing benchmarking survey. For illustrative purposes, we also display data on a specific industry sector: industrial products. This sector includes mills, manufacturers, machinery specialists and so forth. Compared to bottom performers, the top performers in the industrial products area spend 85 percent less per $1,000 of revenue to process payroll. A similar gap is visible in when you look at the "all participants" grouping.
(Note: The top performer group is made up of survey takers who outranked 75 percent of all respondents for this particular metric. The bottom performer group is made up of survey takers who underperformed 75 percent of all respondents.)
How do top performers do it? Figure 2 suggests that this feat is made possible by dramatically reducing headcount. The top performers (in both categories) process payroll with approximately one full-time equivalent (FTE). The bottom performers really look miserable in comparison. APQC research suggests that technology -- particularly the cloud-based kind-that bridges finance and human resources and encourages employee self-service can play a big role in catapulting one out of the muck.