The Importance of Strategic Planning in Payroll
“A three-sentence course in business: You read a book beginning to end. You run a business the opposite way. You start with the end, and then do everything you must to reach it.” – Harold Geneen, former CEO of IT&T
And so it is with Strategic Planning: You determine where your organization or your department needs to be, and then you plan how to get to that future state.
What is strategic planning?
It is the process used to ensure an organization and/or department will achieve and maintain its competitive advantage. Strategic planning should be at the core of every organization and every department within the organization. It helps guide employees in the decisions made on a daily basis to keep in line and on track with objectives and goals. A strategic plan not only positions an organization to sustain competitive advantage, but it also helps employees do their jobs better and increases morale when they are involved with the planning.
What are the key benefits of strategic planning in the payroll department?
Identifying the department’s goals helps make it happen, Whether you want to be the most cost-effective department in the organization, or you want to automate all payroll processes, this is when you decide where you want the future state of the department to be, and how to get there.
Working together to make it all happen builds a unified team. When everyone in the department is involved in the process, the organization’s goals have meaning to each and every member of the team. This fosters a more motivated and productive environment within the department.
Measurement for future performance is simple when there is a strategic plan in place. This allows everyone on the team to witness the progress or lack of progress the department is making. For example, if one goal is to cut employee costs, but there are still several check corrections during each pay period, then that goal is not being met.
Defining goals provides a framework for decision-making, giving employees guidelines for making everyday decisions. In the previous scenario, the team must review how employee time, overtime, accruals, etc., are collected and calculated to ensure paychecks are correct the first time. Is this process automated and streamlined, or is it manual and awkward? Today’s payroll technology can help payroll departments meet their future goals.
What are the key steps in strategic planning?
The first step in determining the scope of your strategic plan is to define the mission statement, which reveals your offer, customer focus, and commitment. For a payroll department, the mission might be to provide world class, cost-effective payroll services to each individual in the organization, thus ensuring accurate and timely paychecks. Paychecks affect every employee, and accurate paychecks are as important to the individuals as well as the organization itself. We all rely on paychecks to support our families, but incorrect paychecks can also plague employers with costly lawsuits and/or federal fines. The role and quality of service of the payroll department is important to every organization, and well-formulated strategic plans are key.
Visions are crafted in the present tense to motivate people today. The more specific the vision, the better focused the department is in obtaining the goal. For example, a vision might be “We will efficiently control employee labor costs to cut expenses for the organization.”
Once a vision is defined, the department must look at its restrictions. Are there enough resources? Is there enough time? Most importantly, do you have the right tools or technology in place to accomplish this? To cut expenses, processes have to be automated, and so technology is a key factor in this scenario.
Now, the team has something to work towards, and a goal worth accomplishing. The next step is to create the tasks, assignments, and success factors for achieving the goal. To do this, the group must understand its current situation. How many incorrect paychecks are released each pay period? How is our time and attendance calculated? What works efficiently or inefficiently in our current processes? What are our strengths and weaknesses?
After a thorough look at the process, the group may decide that a new time and attendance system is required. Looking at outside factors, does the organization have the budget for a new system, and will the ROI be significant enough to offset that cost? If the current process is manual, an automated system will collect, validate, and process time against specific HR and payroll rules. Sophisticated systems have a robust rules engine that automate policies, no matter how complex, to free payroll personnel from costly, error-prone calculations. E-mail notifications remind employees and managers of the schedule to submit and approve timesheets, streamlining the process. Workflow management supports manager review and approval of timesheets, including overtime, accruals, and end-of-period processing.
This is just one of many initiatives designed to meet the department’s goals. The group must look at objectives, strategies, and tasks to create a business case for accomplishing each of tasks necessary to meet its own goals.
Mr. Roger Smith, CPP and payroll consultant, is presenting the on-demand webinar: Strategic Planning in the Payroll Department. Mr. Smith has an extensive background in the payroll industry, is recently retired from EDS, and is also a frequent speaker for the American Payroll Association. View his presentation before July 31, and you will be entered into a drawing to win a copy of the BLR Special Report on FLSA Overtime: Making Your Way Through the Exempt/Nonexempt Minefield. |
