How the termination process impacts payroll How the termination process impacts payroll

How the termination process impacts payroll
31 Jan 2018

This metric highlights how inefficient recurring activities, like employee terminations, negatively impact the payroll process.

Why it’s important?

While automation of the payroll process is important, it alone cannot increase productivity and improve efficiency. It is important that companies focus on automation throughout the end-to-end ‘hire to retire’ process.

One activity that contributes to a high percentage of payroll errors and overpayments is the termination process. Although a large part of the termination process is driven by local legislation, few companies have leveraged self-service to automate the entire end-to-end process. In fact, non top performers report almost 60 per cent more payroll errors and overpayments resulting from the termination process.

Strategic implications

The level of turnover has a big impact on the importance of automation of the end-to-end termination process. High turnover is common in some industries and/or can be part of a company’s culture.

Regardless of the reason, it will have an impact on organisational complexity impacting the payroll process. Add to that the fact that in some countries the termination process is legislative driven and time sensitive, even when this process cannot be standardized on an enterprise level, it should be automated in all locations across the company.

Successful automation will require payroll to work with human resources and other partners including operations, who generally are the first to know an employee is leaving the company, benefits, properties, security and other areas that must perform specific activities when an employee terminates. The implementation of manager selfservice and event triggered workflow technologies are key to success in this area.

Is the termination process at your company automated? What impact does it have on payroll errors, overpayments and other leakage? As payroll leaders continue to identify opportunities for improvement, the automation of the termination process is a good candidate. It is a major contributor to payroll errors and overpayments, often leading to routine manual processes and increased compliance risk.

 

Felicia Cheek

This metric highlights how inefficient recurring activities, like employee terminations, negatively impact the payroll process.

Why it’s important?

While automation of the payroll process is important, it alone cannot increase productivity and improve efficiency. It is important that companies focus on automation throughout the end-to-end ‘hire to retire’ process.

One activity that contributes to a high percentage of payroll errors and overpayments is the termination process. Although a large part of the termination process is driven by local legislation, few companies have leveraged self-service to automate the entire end-to-end process. In fact, non top performers report almost 60 per cent more payroll errors and overpayments resulting from the termination process.

Strategic implications

The level of turnover has a big impact on the importance of automation of the end-to-end termination process. High turnover is common in some industries and/or can be part of a company’s culture.

Regardless of the reason, it will have an impact on organisational complexity impacting the payroll process. Add to that the fact that in some countries the termination process is legislative driven and time sensitive, even when this process cannot be standardized on an enterprise level, it should be automated in all locations across the company.

Successful automation will require payroll to work with human resources and other partners including operations, who generally are the first to know an employee is leaving the company, benefits, properties, security and other areas that must perform specific activities when an employee terminates. The implementation of manager selfservice and event triggered workflow technologies are key to success in this area.

Is the termination process at your company automated? What impact does it have on payroll errors, overpayments and other leakage? As payroll leaders continue to identify opportunities for improvement, the automation of the termination process is a good candidate. It is a major contributor to payroll errors and overpayments, often leading to routine manual processes and increased compliance risk.

 

Felicia Cheek