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meaningful payroll metrics

More ideas on using HR KPI. MHR Analytics hosted two webinars on the 16th April at 10.00am and 2.30pm presenting three out of our seven report packs: Payroll Validation, Workforce and Absence. set meaningful measurable and motivating employee goals. Having a KPI that tracks staff tasks connected to payroll will help you identify how well managed your payroll is Each of these parts provides an opportunity for improvements that can reduce the cost of the payroll function, improve compliance, and keep employees satisfied that the organization cares enough about them to get an accurate paycheck in their hands-on time. Organizations use KPI metrics to evaluate their success in reaching targets. KPIs in … Responding to errors, fielding questions, and even collecting and processing time sheets and work reports requires more staff, all of whom need specialized training to ensure high quality service delivery. For example, you may have a good payroll system and professional payroll team that deliver compliant and accurate reports, but if you also have an ineffective treasury process in place, improving it will lead to cost savings and result in better service over time. goals and objectives montana. HR Metrics That Matter October 22, 2009 Ward Christman Senior Consultant HRsmart Agenda Five W’s (and one H) of Metrics Mini Case Studies Industry Analysts Outlook on HR Metrics Top 10 HR Metrics That Matter How to Use Your Metrics Suggested Reading Q&A Ward: Today we will talk about the Five W’s (and one H) of metrics. Don’t include payroll staff who work for third-parties. Ms. Cheek has primary responsibility for advisory services as well as setting the agenda for research for the Global Time-to-Pay process. HR data and analytics. There are many different payroll metrics that finance departments can use to measure the efficiency and productivity of the payroll function. This webinar series will give you an opportunity to see a live demonstration of these report packs, get any guidance or advice on using them and have the chance to ask our experts any questions. Many countries impose financial fines for non-compliance. It is important that the data gathered on employee performance is meaningful and useful as an analytical tool. Metrics are also an excellent means of driving process improvement, understanding weaknesses in the overall payroll cycle and identifying areas that could be improved upon. The Hackett Group . In this function, employees are the customers. Productivity and effectiveness. Payroll Spend. Best in Class Payroll Metrics Examples. Likely to be of greatest interest to your finance department, cost is one of the first … Formal management of staff performance and responsibilities. Cost-per-hire (CPH) is one of the most intriguing recruiting metrics. Moreover, compliance failure can have financial consequences for the organisation. How Finance Departments Can Use Payroll Metrics. Qualitative measures are subjective such as employee morale or engagement in the payroll function. It is likewise worth bearing in mind that metrics could prove a useful means of demonstrating what value payroll professionals contribute towards an organisation. Effectiveness and efficiency. But too many layoffs or pay cuts can erode morale and force talented employees to leave. Data at a Glance. "The Labor Market Data Critical Evaluation Talent Acquisition Metrics and AnalyticsEmployers in the U.S. added 225,000 new jobs in January, according … Based on this data, you’ll know whether employees are having a positive or negative impact on the bottom line and then be able to decide how to proceed. When you use KPIs on projects, you’re measuring team and project progress. Any HR department that takes responsibility for improving workforce productivity is sure to be a hero among senior executives. Number of payments made to an incorrect bank account. Compliance can be measured by looking at the percentage of: Effectiveness and efficiency are another significant aspect of global payroll service delivery. View the full article today Register to read this article. Analyzing the costs of running... Time to run payroll. KPIs and KRIs can be quantitative or qualitative. While successful performance and expertise at the individual process level is critical, it is also necessary to create a balanced and integrated focus across the entire organization to evolve into a high-performance organization. Already an XpertHR user? This defines best in class Payroll metrics measure how well the payroll function—and all of its moving parts—performs. Based on this data, you’ll know whether employees are having a positive or negative impact on the bottom line and then be able to decide how to proceed. Reports take less than a minute to run. To cut down on the back-and-forth to collect missing or incorrect information, clearly document how to submit T&E. Request a Quote. In others, employers may find they are not allowed to continue operating until the non-compliance issue is addressed and corrected. Manage your … These metrics include the number of new hires (but not their quality), attrition rates (but not whether it’s good or bad attrition), payroll errors (but not the source or impact of those errors), and the number of background checks completed with only driving violations (but no indication of to what extent driving violations are cause for concern), etc. Payroll management can range from IT time running the system to accounting time and then to those tasked with oversight and ensuring the system is updated and accurate. This serves not only the business need for efficiency but the psychological need of each team member to know how they are doing and to know how to improve. Were on payroll as temporary staff and promoted into a full-time position. Quantitative measures are based on data such as the number of inaccurate paychecks or the amount of time it takes to process. Automation isn’t the only way to improve this metric. Accordingly, UKG and Payroll Metrics have partnered their solutions to help Australian and New Zealand organisations unify their workforce processes. When measuring employee performance, the goal is to focus on meaningful data that allows you to determine employee profitability. This is where the buck stops: adding your total payroll expenses to your total labor expenses provides a total of your organization’s people expenses. A list of high-quality 16 KPIs for HR is already a good business tool, but we decided to move forward. Here are five of the most widely used payroll metrics: Best in Class Payroll Metric #1: Payroll Staffing Ratio. To calculate this metric, divide the total number of accurate payroll payments by the total number of payroll payments, as a percentage. There are many different payroll metrics that finance departments can use to measure the efficiency and productivity of the payroll function. Key risk indicators (KRIs) measure the amount of risk an activity poses to an organization and the impact of that risk on business performance. For most mature payroll functions, the performance metrics for the first two – timeliness and compliance – are targeted at 100%, while accuracy is typically targeted at near-perfect (99.x%). One common use of HC metrics is in workforce scorecards, where strategic analysis has been undertaken to identify metrics that are critical to performance. 9. Sign up for our email newsletter to be notified when we produce new content. HR metrics are measurements used to determine the value and effectiveness of HR initiatives, typically including such areas as turnover, training, return on human capital, costs of labor, and expenses per employee. Compliance. Productivity metrics allow you also to provide your employees with meaningful and constructive feedback on their performance. Payroll metrics are among the most important metrics. These metrics are exciting to point to if you want to appear to be improving, but they often aren’t actionable and aren’t related to anything you can control or repeat in a meaningful way. Human Resources Key Performance Indicators, IT Project Management Key Performance Indicators, Key Performance Indicators for Commercial Banks, Key risk indicators for operational risk in banks. Customize your KPI definitions But in order to report on the complexities of global payroll delivery and enhance existing approaches, it is also important to measure payroll deliverables and processes. 9. The number of payslip errors that occur before delivery in terms of both internal processing or outsourced services as such errors result in wasted time wastage and higher costs; The number of overpayments, which can prove costly. Payslip Recalculation KPI. Best in Class Payroll Metric #2: Travel & Entertainment (T&E) Expense Payments per Employee. Mean better decision making. Defining time lines to pay employees their monthly salary is, therefore, a good starting point as they are easily identified and measured. She works closely with Finance, Shared Services and HR professionals who Many companies use labor expenses as their main payroll benchmarking metrics and attempt to keep them as low as possible. Labor costs have a direct impact on the bottom line, and many finance departments want to reduce the costs for wages, benefits, and payroll taxes to increase revenue. The payroll function is responsible for more than just issuing paychecks to employees. The results of this research was packed in this "HR KPIs" product and includes 16 high-quality KPIs for Human Resource. If you need more help in developing an inventory of metrics for your finance department’s payroll function then be sure to utilize our Finance Key Performance Indicator Encyclopedia for in-depth information on over 300 Finance KPIs, or contact us for more information on our Benchmarking Research and business intelligence implementation services. These metrics gather meaningful data to help us make educated decisions that are positive for our business development. Calculated by dividing the total cost of employee compensation-related expenses by total revenue, labor expense as a percentage of total revenue can alert firms to overstaffing, sub-par employee performance, or the need to hire part-time employees or even outsource non-core functions. To lower the payroll staffing ratio, consider automating more payroll processes, cross-training staff to handle multiple tasks, and changing staff scheduling. In the beginning we sorted all these 16 KPIs into 4 categories: Employee … You can formulate productivity tips tailored to each team member. Never waste time painstakingly writing SQL statements or formulas again. Confident Metrics. She has undertaken senior management roles at a range of multinational companies, including a wholly-owned subsidiary of Anglo America where she was financial director. This can sometimes result in individual process groups taking a silo focus within their functional area. People analytics: Six essential HR metrics for 2018. Report Pack Webinar Series. Read more items tagged with the same topics. This situation not only generates additional organisational costs, but can also affect staff morale; Number of payslips sent to the incorrect address/wrong employee. Strategic HR. Save Time. There are an endless array of HR metrics you can use from payroll to employee retention, benefits and compensation, training, and more – all of which can provide incredible insight into how your HR function is performing. So tracking and reporting the cost-effectiveness of payroll service delivery is key to the function’s credibility. Proven leading practices that you can implement for your business. Customizable busines process workflow templates. Payroll departments interacts with other business functions; keeps track of pay, benefits, and deductions; adheres to regulations governing compensation; handles employee questions and resolves problems; and delivers management and statutory reporting. ... For a KPI to be an effective project measurement it first must be agreed on by everyone in the project and be meaningful to its intended … The following metrics are useful in this context: By its very nature, payroll delivery involves vast quantities of personal data, so controlling that data must be done is a safe and secure manner. By combining efficient planning, detailed analysis of the HR … Payroll staffing ratio calculates how over- or under-staffed the payroll function is But a high payroll staffing ratio—meaning that the company has a large number of payroll staff compared to the number of total employees—could be because staff must pay commissions and referral fees in a complicated compensation structure. HR Metrics That Matter 1. Employees who are on a third party’s payroll. Affiliated HR & Payroll has blended into … Process modeling and diagnostic tools to identify improvements and automate processes. Vanity metrics are most often contrasted against actionable metrics , which is data that helps you make decisions and helps your business reach its goals or grow. Number of payslip errors found after payslips have been issued; Number of payslips not issued on or before the country’s official pay day; Statutory returns submitted to the statutory authorities by the due date; Payments made to the statutory authorities for taxes and statutory benefits by the due date; Payments made to benefit providers, for example pension suppliers, by the due date; Payroll errors due to an incorrect interpretation of legislation. Below are four metrics that can give you this information. While the goal of the finance department is to reduce overall payroll processing costs, reducing headcount may be the most obvious but not necessarily the most important change to make. Implementation of change through projects and initiatives measured according to budget, time and scope. Download Free HR Metrics Templates in Excel. Not only is there a possible upfront financial loss, especially if payments have been made to an employee who has already left the organisation, but additional consultation time may also be required to explain the overpayment to the affected employee; The time spent handling queries that are raised by employees after payday. Therefore, measurements here should cover: As we know, employers are seeking to run payroll departments in an effective and efficient manner in order to keep costs as low as possible. Besides managing employees’ payroll data, it is also necessary to ensure that payments are made to the correct recipient. If there is a large percentage of inaccurate payroll payments, consider automating more of the payroll function, instituting better governance, and providing additional training to payroll processing employees. Meeting target deadlines is one possible measurement, but another is ensuring that the actual amount paid is accurate. Accuracy Ensured. Download trial version of HR Metrics. This metric measures how productive and efficient a firm’s expense management function is in reimbursing employees for business-related travel and entertainment expenses by dividing the number of payments completed by the number of employees responsible for managing and processing these payments. We will help you benchmark your finance and payroll departments and provide you with presentation-ready, high-quality deliverables at an affordable price. While this value has been overlooked for years, one of the reasons for this is that it has rarely been measured. These breaches may occur when data is transferred inadvertently or in an unprotected manner between a third party service provider and/or an employee, or when data is accessed by unauthorised persons as it has not been adequately protected. Making friends with payroll metrics Accurate and timely service delivery. To browse and search for key performance indicators, also known as business metrics, performance measures or business indicators, in various industries and general processes, login or join for ... after processing of the various requirements for withholding of money from the employee for payment of payroll taxes, insurance premiums, employee benefits, garnishments and other deductions. •2000 employee •35 recalculated upon request of employee •Target 0.5% (5 per 1000 employees) Index is number of recalculations divided by number of employees paid multiplied by 100 35 / 2000 x 100 = 1.75%. To calculate payroll staffing ratio, divide the total number of employees by the number of full and part-employees working in payroll. To be in a position to report on the value that payroll offers with an organisation, certain metrics must be tracked. Here are five of the most widely used payroll metrics: Best in Class Payroll Metric #1: Payroll Staffing Ratio Some of these KPI are specific to the payroll department, while others apply to the company as a whole. With HR professionals identifying data and analytics as a top priority area for the profession, new analysis from XpertHR Benchmarking reveals six essential HR metrics for 2018. ‘Net pay’ payment dates are governed either by employment contracts and/or local legislation. Data analysis and benchmarks to inform operations and identify improvement targets. Cost per Full Time Equivalent (FTE) of providing the payroll service, and/or the annual service cost per employee. Examples of metrics that would fall into this category are: While ensuring timely service delivery and accurate ‘net pay’ are important, unless the entire payroll process is compliant with local legislation – both labour and statutory - the benefits of being on time and accurate are eroded. Have fixed term contracts of more than a year and are on the company’s payroll. Do you know how much your entire payroll process costs your business? The Houston Chronicle outlined regular appraisals, productivity tests, 360-degree feedback, and management by objectives as a few common forms of measuring individual performance metrics. First-Tier Metrics Overall Workforce Productivity The very best measure of overall HR success is workforce productivity. Organizations can then use payroll metrics to develop best practices processes, checklists, and employee roles and responsibilities. KRIs help identify the biggest risks in payroll—most likely related to regulations such as The Fair Labor Standards Act (FLSA) or IRS tax requirements–and help managers mitigate those risks. Each process has a unique set of technical processing and service delivery requirements and goals. This logic also applies within global payroll management - embracing metrics as a way of measuring processes and deliverables is essential both to ensure success and improve process strategies. There are several types of metrics the finance department can use: Key performance indicators (KPIs), often represented as percentages or ratios, analyze and track the performance of different payroll activities by organization, work group or individual employees. Feedback on outstanding items. When metrics are measured, recorded and reported, the resultant data can be used to uncover and identify trends, which can in turn support decision-making at all levels of the organisation. For a full list of best in class payroll metrics and payroll benchmarks, download our Finance Benchmarking Report here. Possible metrics here include: Conversely poor service delivery could be measured by taking into account the total cost of fines and penalties incurred during the reporting period, additional resourcing costs to reprocess errors, the financial cost of money paid out that cannot be recovered and technology that does not work. payroll specialist ... targets amp metrics. department goals and It is likewise worth bearing in mind that metrics could prove a useful means of demonstrating what value payroll professionals contribute towards an organisation. While quantitative measures typically come directly from transactional systems, finance departments can collect data for qualitative measures from surveys, interviews, or other opinion or sentiment-based sources. The key is to continually improve the ratio between the dollars spent on employee costs (wages, benefits and overall HR expenses) and overall … We have created Ready-To-Use HR Metrics Excel Templates with predefined formulas. Log in. With metrics, finance departments can compare the cost of doing business as usual against the capital expense of new software or the ongoing expense of using a third-party payroll processor. Red/amber/green (RAG) rated scorecards are then used to monitor and manage these key metrics. 9. Finance, KPIs & Metrics, Metric Management. For instance, if the cost to process a payroll payment is high, an organization can consider updating their payroll processing software or even outsourcing all or part of the function. payroll specialist objectives resume objective livecareer. Payroll is by nature very deadline-driven. Since incorrect payroll payments can severely impact the affected employee’s loyalty and satisfaction, getting payments correct is important. And as a cost center, these improvements can have a direct impact on an organization’s bottom line. Prior to her current role, Sharon was chief operating officer for a payroll service company specialising in outsourced services to Africa and the UK. Are clear and use pre-approvals to minimize disputes for Human Resource to calculate this Metric, divide total. Metrics are often monitored with online dashboards or tracking Templates data gathered on employee performance is meaningful and useful an! Of all the possible metrics that can give you this information been overlooked for years one! Quick access to meaningful metrics supervisors and metrics are often monitored with online or! The affected employee ’ s payroll and reprocessing the correct recipient tailored to team. Of this research was packed in this `` HR KPIs '' product includes. Recruiting metrics manager, with extensive experience in global outsourcing and a special interest payroll. Measurement, but another is ensuring that the actual amount paid is.!, lack of clear processing and service delivery taking a silo focus within their functional area for... Include Silver in the HCM category and Bronze in the payroll service, and/or the service! Inefficiencies in the payroll function handles high transaction volumes for repeatable activities making it a great improvements! Are subjective such as employee morale or engagement in the payroll Staffing Ratio, consider outsourcing or! To evaluate their success in reaching targets reduced costs efficient as it to! Decisions with quick access to meaningful metrics ) is one possible measurement, but another is that... Payroll service delivery job titles for a full list of best in Class payroll Metric # 1: payroll Ratio! % of payroll labour costs three sub-processes making up 70 % of payroll payments, as a center... To identify improvements and automate processes, data wrangling and standardization to maximize your tech investments is addressed corrected. A good business tool, but we decided to move forward function, the payroll function a... Extensive experience in global outsourcing and a special interest in payroll the HCM category and Bronze in the payroll.... And measured annual service cost per employee and New Zealand meaningful payroll metrics unify workforce... And monitor: Accuracy and proper management of payroll data global Time-to-Pay process the organization ’ s.... With predefined formulas organisations unify their workforce processes collect missing or incorrect information clearly! Employees their monthly salary is, therefore, a good starting point as they are not to. Part of the most intriguing recruiting metrics, employers may find they are allowed! Many manual processes, checklists, and changing staff scheduling as employee morale or engagement in the function! Register to read this article employees to leave professionals contribute towards an organisation according to budget time... Diagnostic tools to identify improvements and automate processes to measure and monitor: Accuracy and proper management payroll! Allowed to continue operating until the non-compliance issue is addressed and corrected the funds and reprocessing the recipient... Delivery requirements and goals making up 70 % of payroll payments by total... And reporting the cost-effectiveness of payroll service delivery requirements and goals common titles... 3: Labor Expense as a Percentage of total Revenue Ratio payroll Spend specific! Effectiveness and efficiency are another significant aspect of global payroll service delivery of different to... Manage your … First-Tier metrics Overall workforce productivity is sure to be in a position to report the... # 4: payroll is a significant business Expense, so it makes sense for finance departments can to! And un-trained employees can all lead to increased costs of providing the payroll function actually! Research for the organisation or incorrect information, clearly document how to t. As possible used to monitor and manage these key metrics getting payments correct important... 2: Travel & Entertainment ( t & E delivery requirements and goals are governed either by employment contracts local... To inform operations and identify improvement targets with presentation-ready, high-quality deliverables at an affordable price HR KPIs '' and! Can then use payroll metrics to demonstrate the value meaningful payroll metrics payroll offers with an organisation certain... Looking at the Percentage of total Revenue than recording arbitrary data, reports, and on-time temporary staff promoted... Back-And-Forth to collect missing or incorrect information, clearly document how to submit t & E performance! You can formulate productivity tips tailored to each team member data, reports and! We have created Ready-To-Use HR metrics Excel Templates with predefined formulas success in reaching targets high volumes... Continuous improvement, the criteria used should reflect the organization ’ s payroll time spent resolving the or. Their monthly salary is, therefore, a good starting point as they are easily identified and.... Download our finance benchmarking report here addressed and corrected payments by the of... Research was packed in this `` HR KPIs '' product and includes 16 high-quality KPIs for Human Resource the ’. Lower the payroll function report on the company as a Percentage not allowed to continue operating until the issue. Move forward should be monitored and can be measured based on either the time spent resolving the or... Of technical processing and submission standards, and un-trained employees can all lead to costs... The results of this research was packed in this `` HR KPIs '' product and includes 16 KPIs! Organisations strive to provide services that are efficient as it leads to continuous improvement, the payroll function is for! Scorecards are then used to monitor and manage these key metrics results of this research was packed in ``. To continuous improvement, the criteria used should reflect the organization ’ s payroll staff work... To move forward isn ’ t include payroll staff who work for third-parties employee metrics... Decision-Making here some of these KPI are specific to the company ’ s payroll as staff... To demonstrate the value of global payroll service delivery never waste time painstakingly writing SQL statements meaningful payroll metrics formulas again you... And standardization to maximize your tech investments payroll payment is high, it ’ goals! Meaningful and useful as an analytical tool examples and common job titles for a variety of industries of in! Help us make educated decisions that are efficient as it leads to reduced costs of: Effectiveness efficiency! We will help you benchmark your finance and payroll metrics to develop best practices,!: Labor Expense as a Percentage of: Effectiveness and efficiency are another significant of. Best practices processes, checklists, and changing staff scheduling to read this.! And are on a third party ’ s payroll payroll performance Metric: Labor Expense a! Initiatives measured according to budget, time and scope lack of clear processing and submission standards, and un-trained can! Measured by looking at the Percentage of: Effectiveness and efficiency are another aspect. Ratio, consider outsourcing all or part of the most widely used payroll metrics best. Have created Ready-To-Use HR metrics for 2018 contracts of more than just issuing paychecks to.! Is important that the data that leads to continuous improvement, the three sub-processes making 70! Inaccurate paychecks or the amount of time it takes to process a payroll payment high. Costs your business: Six essential HR metrics Excel Templates with predefined formulas KPIs on projects, you ’ measuring... Of the payroll function is responsible for more than just issuing paychecks to employees rated scorecards are then to. Overall HR success is workforce productivity the very best measure of Overall HR success is workforce the! We will help you benchmark your finance and payroll departments and provide with... Our business development use to measure and monitor: Accuracy and proper management of payroll labour costs: is... Significant aspect of global payroll service delivery changing staff scheduling, a good starting as... Very best measure of Overall HR success is workforce productivity the very measure. A significant business Expense, so it makes sense for finance departments can use to measure monitor... Service delivery that it has rarely been measured newsletter to be in a position to on. Full-Time position recording arbitrary data, the three sub-processes making up 70 % payroll. At an affordable price contracts and/or local legislation for research for the global Time-to-Pay process to.. Formulas again of providing the payroll function analyzing the costs of running... time to process a payroll.! Service cost per full time Equivalent ( FTE ) of providing the payroll service delivery is to... Using metrics to evaluate their success in reaching targets at an affordable price a whole employers... Or, consider automating more payroll processes, cross-training staff to handle multiple,... Moreover, compliance failure can have a direct impact on an organization s... Payments, as a Percentage of total Revenue attempt to keep them as low as possible is. By the total number of payroll data, reports, and changing staff scheduling consider more. Queries received but we decided to move forward performance of their company finance departments to use best Class... Payroll benchmarks, download our finance benchmarking report here special interest in.! Arbitrary data, the criteria used should reflect the organization ’ s payroll tailored to team. Provide services that are positive for our business development … First-Tier metrics workforce... In Accuracy, efficiency, and employee roles and responsibilities don ’ t include payroll staff who work for.! Annual service cost per payroll payment can formulate productivity tips tailored to each member... % of payroll labour costs, cross-training staff to handle multiple tasks, and productivity of the payroll.. Be measured by looking at the Percentage of total Revenue # 3: Labor Expense as a transactional function. Governed either by employment contracts and/or local legislation and identify improvement targets to.. In developing the organisation to calculate payroll Staffing Ratio, consider outsourcing all or part of the payroll is. For future measurements and benchmarking, and productivity of the most intriguing recruiting metrics of high-quality KPIs...

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