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Man vs Machine: Payroll Mistakes Outside of the Cloud

Cloud computingBy Celine DuPuis, Product Marketing Manager, Ceridian

There’s no easy way to say it: when humans get involved, sometimes payroll mistakes get made. It happens – especially when organizations bring new hires on board in the middle of a pay period. Unfortunately, it’s not realistic to only hire every two weeks or on the 1st and 15th of the month. Some amount of manual labor will be required to pay employees who are hired in between those magical dates.

If an employee is hired on the 9th of the month, for example, there is a risk that they’ll be paid for the full first two weeks on the 15th. In this case, an administrator would be forced to retroactively adjust the most recent payroll and then remember to account for the employee’s extra pay in the next payroll. Not only is the administrator worrying about the errors they know will appear in the next payroll run, but now they need to manually calculate the new employee’s pro-rated pay. Not only do these manual calculations take uninterrupted time, they leave room for human error.  For organizations that don’t have a single application for human capital management, there are a number of manual steps taken by administrators to ensure the new hire’s information has been captured by each functional team. The employee hired on the 9th likely would have been processed through a few different systems or manual spreadsheets, by more than one person, costing the organization time and leaving room for further error. It’s equally as likely that this employee might not be paid on the 15th, forcing them to wait until the next pay period comes around on the 30th. Administrators in this case would encounter the same pro-ration issues and an unhappy employee.

Holiday accruals pose similar issues to administrators – in many countries, employees earn a certain percentage of vacation pay or time that also needs to be pro-rated when they’re hired mid pay period.

The repercussions of paying an employee incorrectly are not always tangible. I remember being a new mid-week hire at Company X a few years ago. For weeks, I was immersed in getting to know the company I would be working for – from researching online to chatting with new colleagues. I was at the peak of my excitement for this new challenge. When our first pay period rolled around, it was clear that although I had taken the necessary steps during onboarding, something had gone wrong. I had not been compensated correctly. It got me thinking ‘maybe I’m not valuable enough to be paid correctly’ which is a pretty disheartening thought for any new employee. The situation was eventually rectified, but not until a few pay periods had gone by.

It’s possible that I am sensitive, and that most employees wouldn’t immediately relate their compensation with value, but employees do like to be accurately compensated. What we know is that onboarding is one of the single most important measures of success in every new hire’s first 30 days. How well onboarding goes will help determine how engaged an employee will be, their productivity levels, and their commitment to the organization.

Using a manual tracking file or multiple disparate systems results in either time lost or double data entry leading to unhappy, incorrectly paid new employees. This common payroll headache has a solution: a single system for HR and Payroll – a system in which HR ‘talks’ to Payroll and can automatically pay employees based on their hire date. With a single application, administrators enter data one time. This information is captured and shared throughout the system, enabling automatic pro-rating of pay and holiday accruals. Payroll can be viewed before processing, allowing the administrator to view and approve each new hire’s first pay.

So who wins? Man, or machine? In this case, a single application is the clear winner. When employees are paid correctly, they feel more valued and engaged, leading to a happier workforce, and a happier workforce is a no-brainer.

celine-dupuisCeline DuPuis is a Product Marketing Manager for Ceridian focusing on product positioning and customer liaising through marketing collateral and special events content. Celine’s 6 years of experience in almost all facets of the marketing world give her a unique understanding of Ceridian’s impact on customers. She holds a Honors Bachelor of Commerce from the Telfer School of Management at the University of Ottawa. Celine lives downtown Toronto (and loves it!) but wishes it was closer to the mountains for snowboarding.

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