Why Your Organization Must Bring Its Time Tracking and Payroll Systems Together

Many organizations have a “make do” approach to their time management and payroll systems. However, where these critical pieces of the HR puzzle have gone unmodernized for too long, organizations are struggling to understand key aspects of their present and future operations.

In this article, we explore how migrating your time and payroll software solutions to the cloud can help your business achieve better HR outcomes.

Payroll and Time Tracking Systems: The Problem

Payroll has a reputation as the “unloved” process in HR. It can end up being an invisible exercise—one that only really gets noticed when it isn’t working. At worst, this “out of sight, out of mind” status can make payroll something of a ticking time bomb. Unsurprisingly, your people value being paid correctly and on time, and the kinds of antiquated, highly customized systems that get entrenched in many organizations can become increasingly costly to maintain.

A payroll system doesn’t have to be on the verge of a catastrophic breakdown to be ineffective, though. Even competent older systems are likely to be operating in isolation from other local systems, and they’re invariably not talking to systems in the wider organization. The complexity of a highly customized but otherwise stable system can make it complicated to move on, even as the list of features you’re missing out on starts to grow significantly.

While an organization’s time management systems are less likely to have the same force-of-habit, “too complicated and risky to upgrade” stigma attached to them, they tend to be just as isolated. In larger, multinational organizations it’s not uncommon for businesses to have different systems for every country they work in.

As a result, we see large companies—especially those with large populations of deskless workers—are in need of a consolidated central overview of how many employees they have and where they are. This has clear implications for business strategy, and has proven to be a compliance issue in the past—as some organizations discovered when attempting to roll out a COVID-crisis strategy. Low-quality employee data will potentially result in poor decision-making, which in turn can have a massive impact on a company’s profitability. Having a robust HRIS in place is vital for companies that want to be able to make decisions based on facts.

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How Payroll and Time Management Systems Complement Each Other

To state the obvious, most organizations calculate pay in relation to time worked, whether an employee is working on an hourly wage or whether they take a salary with an expectation of the hours they will work written into their contract and be the same every month.

Though the relationship is simple, the actual calculation can be more complex than it seems at first glance. Organizations in sectors such as logistics, retail, and manufacturing may have to deal with a huge range of non-standard hours, and their systems must be robust enough to account for that variance. Even in organizations with the vast majority of employees working standard full-time hours, there are still:

• Non-standard contracts to account for, including part-time, flexible working arrangements, phased returns, and other structures for attendance

• Leave/PTO—both within and outside of annual allowances

• Sickness—including paid and unpaid

• State- and country-based variation in laws governing working hours, holiday pay, sick leave, and other pay factors

Getting these calculations right is obviously important. Employees who aren’t appropriately and promptly compensated for their work are unlikely to be happy employees. On the flip side, they may not notice or admit to noticing when pay is incorrectly calculated in their favor. Pay miscalculation at scale can be a significant source of lost capital—in some cases, organizations could be paying millions a week for work they’re technically not getting.

Whether considered separately or in combination, time and pay can and should be used to calculate so much more of consequence to your organization. This could include:

• Working out per-location and cross-organization shift requirements that maximize efficiency while minimizing costs

• Having a full and accurate understanding of how much the business is currently spending and how much it will spend on labor

In this way, time and pay are fundamentally-linked building blocks in your business. Bringing them closer together just makes sense!

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What Are the Benefits of Having Payroll and Time Management Systems Together in the Cloud?

Whether you’ve recently run into problems with a legacy pay or time management system, or are proactively seeking to modernize these systems to help reinforce your forecasting and accounting capabilities, a cloud-based solution is an obvious choice.

There’s a good chance that you already have other business systems in the cloud—and it’s a move that many market-leading companies have already made. Nonetheless, the benefits of bringing payroll and time management to the cloud are worth repeating. The cloud will give you:

• Access to the system wherever you operate, allowing you to maintain a single organization-wide source of truth for your payroll and time management data

• Real-time data that enables quick decision-making

• Scalability within your business—easily integrate new cohorts and locations

• Scope for sharing more data across departments, resulting in the automation of a wider array of HR tasks and reduced workloads for staff

• Enhanced security and reliability for sensitive information through reputable, large-scale hosting providers already trusted by thousands of other businesses

• The elimination of per-location software deployment and update concerns—potentially saving thousands of IT hours

• Centralized content update capabilities that enable you to more effectively roll out amends in response to regulatory changes

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Why You Need a Partner You Can Trust to Make Cloud-Based Pay and Time Management Happen

Despite the drawbacks of legacy pay and time management systems and the benefits of modernizing, some organizations are still hesitant to make the switch. Any systems upgrade can be complicated and involves some element of risk. An implementation must involve careful consideration of current requirements and long-term strategy.

Because of this, organizations should seek out a partner with extensive experience with time, payroll, and workforce analytics. Effective People has over 19 years of experience in this field, with an understanding of key issues from both a process perspective and a technical perspective. Our team specializes in implementing SAP-powered solutions, including SAP SuccessFactors EC Payroll as well as time management solutions such as Kronos (UKG), Workforce Software, and SAP SuccessFactors Time Management, for both on-premise and in the cloud. We believe that we can help you make this essential move towards a cloud-based payroll and time management system.

DOWNLOAD OUR EBOOK | "Making the Case for Cloud Payroll with SAP SuccessFactors".

If you’re ready to modernize your systems, Effective People can advise on the HR cloud strategy that will make that a reality and can spearhead your implementation and roll-out on a global scale. And once that’s all achieved, we can offer continued support and development.

Unleash the full potential of your payroll and time management data — contact us today to find out how we can bring both into the cloud.