Why Is a Modern Payroll and Timekeeping Solution So Important for Governments?

Gov't women talking

This is the fifth blog in our industry payroll mini-series. This mini-series will look at payroll across multiple industries and provide insight on the impact it can have on an organization.

Modernization is beginning to transform the public sector workforce and the future of work includes more emphasis on employee experience, while also allowing leaders to make data driven decisions.  The pandemic certainly shined a light on the fact that technology plays an important role in the future of work and how employees are interacting with their schedules, timecards, pay information, and time-off requests.

“As the public sector deploys technology to improve service delivery, increase capacity, streamline operations, and reach policy goals, agencies must also invest in people resources and create a tech-friendly work culture.” 
-IDC whitepaper on “Transforming the Public Sector Workforce”

When you try on a “one size fits all” pair of pants and they don’t fit are you really surprised? Unfortunately, that same approach to buying technology, like clothes, is flawed because it assumes all businesses and employees’ function and do their jobs the same way. 

As states and cities are looking for their Enterprise Resource Planning (ERP) solutions to solve their HR, budgeting, procurement, and finance needs, certain agencies, such as Departments of Correction, Transportation, Health and Human Services may have very focused and specific requirements that can only be met by industry-specific applications.  Payroll and time tracking are often overshadowed in these discussions, but their impact on employee engagement is tied to the perceived success of a project. When employees receive incorrect paychecks, that’s when engagement dips and bad PR starts to roll in.

bad payroll PR

Recent analysis by Gartner, IDC, and others have shown that an ERP solution, in and of itself, can rarely meet the needs of an organization in specialized areas, like payroll and workforce management. The ERP solution typically lack key capabilities that are required, leaving those gaps to be filled with shadow systems, spreadsheets, paper forms, or manual entry – increasing the chance of compliance issues. 

In my experience as the Director of Payroll at the City and County of Denver, it is much more efficient for states to maintain a mix of integrated best-of-breed applications that scale with your organization over time. However, when decisions are made regarding enterprise technology rarely are the individual operational needs of the various agencies taken into consideration.  There is a greater focus on the impact to the Administrative Group (finance and IT) rather than the Operational Group (employees, front-line managers, and agency heads).  

It is important to make sure that you are taking into consideration whether one system can really meet all of the requirements with a complex government environment.

Workforce management can be a broad term and often gets lumped into “time and attendance” and payroll – which is why the requirements and needs are often underrepresented in Requests for Proposals (RFPs). But payroll is so much more than just the collection of punches.  The power of the calculations behind those punches is what makes a modern payroll solution so powerful.  Having the data validated at the point of entry instead of waiting for data to be keyed into and processed by your ERP or HCM time and labor module allows managers to make labor decisions in real time. These actions result in accurate paychecks for their employees.

For the organization, the administrative burden is reduced on payroll and HR departments. When automatic calculations eliminate manual errors, compliance around FLSA, FMLA, and other labor laws is much more easily adhered to. Organizations are leveraging workforce management processes and tools to increase organizational performance.

So, how does a streamlined workforce management and payroll solution affect an organization and its employees?

1. Employee engagement: When employees have peace of mind that their paycheck is accurate week-over-week, it’s proven that retention is increased. Did you know that 24% of employees begin looking for new employment after just one payroll mistake? After two payroll mistakes, that number jumps to 49%.

2. Compliance: Legal departments can take a sigh of relief knowing that their system is paying their employees fairly when it comes to audits. Did you know that the wage and hours division of the DOL found, on average, $1,120 for each employee due back wages in 2020 for each investigation?

3. Financial accuracy: Reporting on financials to the public is just part of being a government. Payroll errors that cause late tax-payments can mean penalties and repercussions. With tight budgets, ensuring that payroll is accurate means avoiding lawsuits, having accurate tax filings, and avoiding unnecessary spending on fines.

One of the most important steps in delivering a perfect paycheck every time is choosing the right vendor. Having a unified, end-to-end vendor that can deliver a perfect paycheck, as well as other components of HCM/WFM, such as recruiting, talent management, benefits administration, HR, and more is vital. Allow your payroll software to work for you, and not the other way around. Choose a payroll software that can streamline the payroll process for your government. 

To learn more, visit UKG.com/government.