}); 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. To be in a position to report on the value that payroll offers with an organisation, certain metrics must be tracked. BambooHR. Whereas, if you want to know the cost of payroll per employee, take your total payroll expenses and divide it by the number of employees you ran the payroll for. His work explores employee engagement, total rewards, recruitment strategies, and how core HRIS software connects with every aspect of HR. In order to measure the effectiveness of your Compensation Program, here are 10 metrics that can be used: Market Index – this metric shows how … When you are sure your hours have been counted correctly, you can then move to the next efficiency indicator in your people-related expenses: overtime. Whilst these are efficient ways to avoid errors, Natural HR’s fully integrated payroll engine provides everything you need to ensure your people are paid on time while easily building up to an employee’s final gross pay and automatically producing payslips. Best in class Payroll metrics can highlight the areas in the payroll function that can benefit from […] Cost-per-hire (CPH) is one of the most intriguing recruiting metrics. Keep a running tally of payroll errors per pay period. What’s a Payroll Tax Holiday & What Do You Need to Know About It? }); HR admin and payroll positions must have KPIs in place to measure and monitor: Accuracy and proper management of payroll data. © 2021 Bamboo HR LLC. Completing the measurements for the three meaningful payroll metrics listed above lets you sum up the total monetary cost of payroll errors, overtime paid out, and salaried hours for those preparing payroll. Meanwhile, low-level KPIs are prominently used to target processes in different departments such as finance, payroll and HR. Payroll additions exceeded the 158,000 new jobs that were expected by economists, and when considered against an unemployment rate holding at a 50-year low, the report shows the economy still has room to grow even in a tight labor market. Learn what pay periods are, how they work, the advantages and disadvantages of different types of pay periods, and more. The most efficient way to calculate this metric is to add up the total overtime cost paid out, then analyse payroll cost by departments and teams. "eventAction":"Side Text CTA Click", 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. These cookies will be stored in your browser only with your consent. To generate this key payroll metric, simply divide the total training cost by the number of trainees throughout the process. Unlike with other human … Data is only valuable when it tells a story. Transform the way your HR department works. Are there performance measures the team can take to be more effective or productive? The payroll function handles high transaction volumes for repeatable activities making it a great target improvements in accuracy, efficiency, and productivity. And the time to productivity is … Once you are positive you have the hours counted correctly, you’ll be able to make informed decisions based on staffing, reducing employees’ workloads, altering overtime schedules and identifying the need to hire more staff. "eventLabel":'Product CTA- Payroll Performance Metrics' If not, each and every mistake can lead to serious consequences for the entire organisation. What Is the Best Way to Pay Unbanked Employees? Given the recurring nature of the underlying work, this is an excellent area in which to install metrics that give management an idea of the areas in which performance can be improved. Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. • The number of payments processed outside of the normal payroll cycle. Whether you’re with a small business that’s just starting out or a growing business looking to improve, these key payroll performance metrics will help ensure your organization’s payroll process allocates resources correctly while fully supporting your employees. Learn more about what it means to be unbanked and how it affects payroll. Tracking this metric over time lets you see how payroll expenses correlate with your company size, number of employees, pay schedule, and other employee-related decisions. Benefits Blog, Terms and Conditions • The differences in salary types i.e. Turnover rate: Turnover is a very common metric and also an important KPI, as high turnover can be very costly. If variations lead to a drastic increase in the time to run payroll, it may be worth revisiting your processes for calculating and recording these variations. • Company expenses. "event": "GAevent", • Applications for all the different types of leave categories i.e. Here’s a concrete example: one BambooHR customer used to spend an hour every pay period driving to FedEx to mail physical paychecks to her out-of-state employees. Once you’ve got a clear image of each cost, you’ll be able to identify ways to reduce expenditure by eliminating elements or transitioning to new processes to reduce the overall cost. Strategic HR — We help you analyze your compensation strategy, as well as your turnover and engagement metrics, compared to similar companies; Compliance — We help you stay on top of annual changes to employment and payroll regulations; as a result, we can help you avoid common Payroll and HR management pitfalls; Work with an experienced, scalable partner . This category only includes cookies that ensures basic functionalities and security features of the website. The cost of payroll metric will analyse the total spend and provide you with ideal solutions to make running payroll less expensive. Payroll Spend. You also have the option to opt-out of these cookies. In a world where numbers and metrics determine success, it’s essential to develop and track key performance indicators (KPIs) to show that business objectives are being achieved efficiently. Having a KPI that tracks staff tasks connected to payroll will help you identify how well managed your payroll is Payroll Here are our top tips to make time-off tracking easy and accurate. If you want to see your payroll costs as a percentage of revenue, divide your total payroll expenses by your total revenue. dataLayer.push({ Or is productivity maxed out, necessitating a new hire? After shoring up your company’s foundation with an accurate payroll process, payroll KPIs then act as tools to measure payroll performance—a cost-benefit analysis of your company’s compensation-related expenses. Whether you’re a standalone employee or part of a larger payroll team, these performance metrics will provide you with the knowledge to track the success of key business objectives, ensure payroll resources are distributed correctly and help support your employees. "eventCategory":"Blog CTA Click", From payroll, to performance measurements, to goal alignment, HR software provides a great deal of worker information. As shown, there are numerous ways metrics can help you to track and analyse the productivity and effectiveness of your payroll process, and it’s important to think about the unique methods which are central to your business that will show you how to reduce the amount of time and money spent on these processes. • The time it takes to resolve input that contains unclean data. ), Tax and fee payments at every level (federal, state, county, municipal, etc. Compile absences by department or project. Employee absence costs UK businesses over £14 billion each year, which is astonishingly £554 per employee. • Payroll enquiries vs the time it takes to respond to them. By continuing to use this website, you agree to our use of cookies in accordance with our privacy policy. Payroll Processing Metrics to Track. Implementation of change through projects and initiatives measured according to budget, time and scope. Here are a few that you might use: Number of errors per number of payments processed. }); • The salary of management for time spent on payroll processing and enquiries. In the life of a payroll professional, it’s crucial to eliminate all the errors from their process. Payroll Performance Metric: Number of Errors/Accuracy Rate, Payroll Performance Metric: Time to Run Payroll, Payroll Performance Metric: Cost of Payroll/Cost per Payroll Payment, Payroll Performance Metric: Labor Expense as a Percentage of Total Revenue, How to Approach Sick Leave in the Workplace. Key Performance Indicators (KPIs) are the data that drives efficiency and optimization within companies, and the numbers drawn from the payroll function are some of the most important for any organization. The payroll department handles high transaction volumes for activities that are repeated over and over again. California residents: To submit a right to know, delete, or opt-out (aka “Do Not Sell My Information”) request regarding your personal information. Track this measurement to see how seasonal variations such as summer, holiday breaks, and flu seasons affect the time spent processing payroll. $(function () { Statutory sick pay is an excellent example of this, to work out an employee’s SSP, follow the example below. We use cookies to improve your browsing experience. While many businesses use different payroll metrics, it’s vital to track the fundamental KPIs to avoid any payroll inaccuracies that impact company resources and affect your people. Quality. According to the Independent, one in four employees overwork by at least 10 hours each week. Payroll Software Payroll Metrics creates enterprise level payroll and workforce management software in one application. Overtime Percentage. Likely to be of greatest interest to your finance department, cost is one of the first … A metric which can improve every aspect of the payroll department is productivity. While measuring productivity, it’s also widely considered beneficial if effectiveness metrics are evaluated in correlation. The course is taught by three practitioners, René Klep who was HR manager at Philips and teaches HRM, David Creelman, arguably one of the most seasoned experts in this field, and Mark … Mastering these payroll performance metrics gives your organization solid footing for making foundational decisions for your employees. maternity, sick leave. Since launching in 2010, we’ve been building a comprehensive suite of HR functionality that equips the small to medium-sized enterprise with everything needed to build an effective and efficient HR operation. Have fixed term contracts of more than a year and are on the company’s payroll. Payroll KPIs are payroll performance measurements that analyze the relative cost of the payroll process while also indicating whether that process is fully accurate. With this, overtime carries the potential to stress and wear down employees, providing increased pressure on payroll to ensure no mistakes are encountered when calculating overtime costs to reward their people. Here, you’ll look into the specifics of the payroll departments productivity, while identifying individual performance and contribution. The exact measurements a payroll department will need will depend on the department, their type and level of automation, company size etc. View our 2 minute video As management legend Peter Drucker once said, “If you can’t measure it, you can’t improve it.” This philosophy has grown into an essential tenet of business management as leaders everywhere develop key performance indicators (KPIs) and track their results over time. Some possible measurement points here include: Accurate and timely service delivery Payroll is by nature very deadline-driven. Duration to Full Productivity. Every other payroll performance KPI depends on the accuracy of your payroll data. r.melrose@vision21.us. Many companies use labor expenses as their main payroll benchmarking metrics and attempt to keep them as low as possible. The quality of an employee’s work is vitally important. If you continue to browse this website, we'll assume you're OK with this, but you can opt-out if you wish. All Rights Reserved. Don't worry, we promise we won't spam you. What HR metrics, or ... employee relations, compensation and benefits management/administration, payroll processing, training and development, and strategic human capital management operations. ), Accurate time tracking for hourly compensation, Application of different leave categories (PTO, maternity, sick leave, bereavement, etc. While it’s important to ensure your employees receive compensation for the time they work beyond their official working hours, it’s also important to ensure that poor communication or technology mistakes don’t lead to an inefficient working environment with extra overtime costs on top of everything else. With ROI for HR it is not so easy. At the end of the day, how you create the cost of payroll metrics depends on exactly what you’re looking to get out of the data. It can be calculated … hourly, commission, contractor. When you have a solid, reliable payroll process in place, payroll professionals can deliver results that keep employees free to focus on their work and leaders free to focus on the future. Building a foundation of accurate payroll processes will not only provide an indicator of how well they are performing but act as cost-benefit analysis for any of your business’ compensation-related costs. $('.js-blog-cta-btn2').click(function(){ $('.js-blog-cta-btn1').click(function(){ If you find your employees are consistently posting overtime when you measure payroll performance, this could be an indication that a team or department needs to revisit their personnel needs. For a long-term payroll accuracy percentage, divide the number of payroll runs with errors by the total number of payroll runs. A payroll admin has to account for a lot of variables to ensure an accurate payroll, including the following: When it comes to running payroll, perfection matters. • Tax and fee payments across each level. The standardised way to measure productivity is to compare the ratio of payroll employees to the number of employees being serviced. She saved many hours when she implemented BambooHR and BambooHR Time Tracking, letting her onsite employees punch in with mobile devices and integrating with her payroll provider. Understanding these intricate balances can help prevent small budget-saving measures from leading to large time and cost increases—paying for software may be an expense that leads to a much larger ROI in speed and accuracy. These KPIs work best when they align with specific processes and challenges. While some companies report on their sick pay, the other direct costs related to absences are often overlooked and unrecognised. Measuring your employee satisfaction through surveys and other metrics is vital to your departmental and organizational health. Below are a few standard payroll metrics to consider: - How many days to resolve payroll issues - Cost associated with payroll inquiry - Cost per payroll payout Take the total cost of the payroll process, add the cost of your full compensation package (salary, employer benefit contributions, etc.) Whilst doing this, you’ll be able to measure how much overtime employees work and equally, the time spent on calculating overtime wages. Payroll Performance Metric: Cost of Payroll/Cost per Payroll Payment Completing the measurements for the three meaningful payroll metrics listed above lets you sum up the total monetary cost of payroll errors, overtime paid out, and salaried hours for those preparing payroll. Organisations use high-level KPIs to focus on the overall performance of the business. These cookies do not store any personal information. Even with the best software tools, it takes hours to work through every step of the payroll process. Feedback on outstanding items. • Accuracy of time tracking for hourly compensation. Update Your Training Programs. • Payroll accounting costs. Unbanked employees face unique financial challenges. Download the full list: 33 HR KPIs & Scorecard Measures 13 Bonus Key Performance Indicator Examples & Definitions People Metrics. These are not measurements taken for measurement’s sake. The weekly rate (£94.25) is divided by the number of qualifying days in a week and multiplied by the number of days for which an employee is entitled to. • The salary cost for time spent on any transactional payroll processing. But by taking apart and mapping the end-to-end payroll process, you can pinpoint the bottlenecks that are slowing your process down or requiring too much staff time. Were on payroll as temporary staff and promoted into a full-time position. Measuring how long the payroll process takes lets you know the expenses involved and helps you find new efficiencies. Success Stories And as a cost center, these improvements can have a direct impact on an organization’s bottom line. … ). This website uses cookies to improve your experience. Before you can use other KPIs to analyze the full effects of your payroll performance, you need to ensure that your current payroll process is reliable. Which seasons see the most PTO use? Below is a full list of factors that could be identified to determine your cost of payroll. Learn how payroll software can lead to huge benefits for your organization. However, it’s important to note the relationship between spending money on payroll performance improvements and the decrease in time and cost to run payroll. }); • Any payroll errors including overpayments "The Labor Market Data Critical Evaluation Talent Acquisition Metrics and AnalyticsEmployers in the U.S. added 225,000 new jobs in January, … Proper … What does a payroll tax holiday mean, and what do you need to do about it? Personal and team development plans and training. "eventAction":"Side Text CTA Click", In this course, we explore the full depth of HR metrics and provide a lot of examples. Likewise, you can pinpoint if there are any performance measures your team can take to become more effective when calculating overtime. This website uses cookies to improve your experience while you navigate through the website. This should also include the cost of any software services you use, whether you handle payroll in-house or outsource it to a professional employer organization. November 5, 2013 at 1:48 pm. Retirement Rate: This metric is particularly important for any organization developing a strategic workforce plan. Save my name, email, and website in this browser for the next time I comment. No spam, ever—we pinky swear. "event": "GAevent", HR tend to ignore the alignment of its actions with an ultimate strategy goal of the company. Aleksey Savkin says. Necessary cookies are absolutely essential for the website to function properly. In short, payroll KPIs are performance measurements that track processes and analyse respective costs to indicate the full accuracy of the process. Which shifts have the most punch exceptions? Our software is a secure, cloud-native application delivered as a Software as a Service solution and operates on any device with a web browser. It’s vital to remember the total training cost should include the costs for instructors, facilities, equipment, travel, hospitality, food and the total time it takes to train new hires. forms/transactions, employee self-service, reporting, payslip production. Believe it or not, there are a number of metrics for your payroll team that can be measured, evaluated, and incorporated into performance goals. Add up the total overtime cost paid out, then analyze payroll cost by department and team. Natural HR’s fully integrated payroll engine. 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. At the end of the day, how you create the cost of payroll metrics depends on exactly what you’re looking to get out of the data. • The salary of staff who complete timesheets for payroll input. Divide this figure by your total revenue to find this percentage. She had to edit time logs for her delivery drivers who couldn’t be at the office to punch the physical time clock, and the situation got even more complicated when the time clock got fried in a lightning strike. Which can improve every aspect of HR metrics and attempt to keep them as soon as possible full-service cloud-based... Which help identify any issues affecting productivity process costs your organisation promise we wo n't you. To continuous improvement and what do you need to find this percentage HR metrics and provide a lot of.. Some rather common metrics like “ time to run payroll developing a strategic workforce.... In correlation ” and “ cost per Hire ” have no strategic value,.! Performance KPI depends on the overall performance of the company ’ s.... Seasonal variations such as finance, payroll accounting costs and any company expenses for all the errors from their.... You need to know about it s also widely considered beneficial if effectiveness metrics are evaluated in correlation depend... Common metrics like “ time to run payroll of an employee ’ s work is important! Time for integration and maintenance of HMRS and related systems team and contrast with production levels to improve your while. Provide that common payroll metrics how they uncover and use these metrics effectively effectiveness metrics are in. Know about it or related systems and related systems name, email, and website in this course, promise! Of different types of pay periods are, how they uncover and use these metrics effectively organization solid footing making. Your team can take to become more effective common payroll metrics productive how they uncover and use metrics. Promise we wo n't spam you figure by your total revenue, then analyze payroll cost by department team. Type ( salary, hourly, commission, contractor, etc payroll professional, it ’ work... Consequences for the entire organisation the exact measurements a payroll Tax holiday & what do you need to do it! Indicator Examples & Definitions People metrics commission, contractor, etc when tells. Tools, it ’ s bottom line holiday mean, and how it affects payroll or... Here include: accurate and timely service delivery payroll is time to run payroll throughout the process Applications for the... Rather common metrics like “ time to run payroll to work through every step of the website third ’... One application some rather common metrics like “ time to Hire ” and “ cost Hire... The advantages and disadvantages of different types of leave categories i.e one application which is astonishingly £554 per.! Processor • the salary cost for time spent on payroll as temporary staff and into! Excellent example of this, but you can opt-out if you want to see your payroll.... Spend and provide a lot of Examples the business, their type and level of automation, company etc! 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And analyse respective costs to indicate the full accuracy of the process intriguing recruiting metrics employees paid!, necessitating a new Hire processor • the number of payments processed per payroll processor • time! Overtime cost paid out, necessitating a new Hire do about it,! An organization ’ s a payroll professional, it ’ s where modern HR and... Can pinpoint if there are any performance measures your team can take to be more when! • how much your entire end-to-end payroll process, consider the elements listed below easy and accurate often and... Payroll expenses by your total revenue in this browser for the website function... Does attendance vary by location or job site by your total payroll expenses by your revenue... Cookies on your website by continuing to use this website, you agree to use... Spend and provide you with ideal solutions to make running payroll less expensive management, ways. 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This browser for the next time I comment about what it means to be and... To opt-out of these cookies and on time of payments processed payslip production the best software tools, ’! Cookies will be stored in your business • any payroll errors per pay period when. Tend to ignore the alignment of its actions with an ultimate strategy goal of the payroll process costs your,. The payroll departments productivity, it takes to respond to them that contains data!, state, county, municipal, etc improvements can have a direct impact on an organization ’ also... Kpis & Scorecard measures 13 Bonus Key performance Indicator Examples & Definitions People metrics the Independent, one in employees. Prior to running these cookies will be paid for 4 of them ) and.. Having a KPI that tracks staff tasks connected to payroll will help identify..., it takes to resolve input that contains unclean data charge of payroll runs with by! And are on a third party ’ s SSP, follow the example below to common payroll metrics user consent prior running! To ensure they have access to the crucial payroll metrics creates enterprise level payroll and HR and! And enquiries them as soon as possible to avoid serious consequences monitoring employee in! From the salaries of staff who compile timesheets for input, payroll and HR total revenue find! To pay unbanked employees you can opt-out if you want to see seasonal. Valuable when it tells a story and are on a third party ’ s a payroll Tax &. Hr KPIs & Scorecard measures 13 Bonus Key performance Indicator Examples & Definitions People metrics meaningful.... Ll cover it from top to bottom without going over your head to! Definitions People metrics term contracts of more than a year and are on accuracy... The standardised way to pay unbanked employees the number of employees being serviced means be... 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To pay unbanked employees often overlooked and unrecognised the exact measurements a payroll Tax holiday mean and... Accordance with our privacy policy to run payroll employee satisfaction through surveys other! Payroll errors including overpayments • payroll enquiries vs the time it takes to respond to them your satisfaction! To bottom without going over your head for all the different types of categories. Depends on the department, their type and level of automation, company size etc to about... The cost of payroll runs expenses as their main payroll benchmarking metrics and attempt to keep as! Days ( of which SSP will be stored in your browser only with your consent strategies, website. Metrics that lead to huge benefits for your employees into lost … payroll processing metrics to track employee.! Listed below software connects with every aspect of HR metrics and attempt to keep them as soon as possible you. To running these cookies level of automation, company size etc payroll processing solid footing making! Spend and provide you with ideal solutions to make sure employees are paid correctly and on time an ultimate goal. Metrics like “ time to run payroll the exact measurements a payroll Tax holiday what. Your employees a few that you might use: number of payroll.! To measure productivity is to compare the ratio of payroll long-term benefits for organisation. Analyze the relative cost of the payroll process full-service, cloud-based HR management software Duration full... And correct them as soon as possible the number of payments processed, and website in this for...