Payroll professionals: empower yourself with analytics
Sep 20, 2023Innovation
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Have you ever been intrigued by the story your organization’s data is telling you as you process the business’ payroll? From salaries and wages, to statutory and benefit deductions, there’s a lot to ponder… and you might be wondering what it all means beyond the day-to-day.
Within all of the details you use to pay your staff, there are hidden nuggets of strategic intelligence that, when uncovered, can empower you to bring even more value to your organization. We know that payroll departments have always been expected to produce accurate and timely reports, but it’s difficult to stay informed of trends and events within a business and its workforce without the correct tools. Let’s dive into how payroll analytics (and you!) can provide that strategic guidance.
Where to start
For those using Payworks’ suite of workforce management solutions, Payroll and Workforce Analytics are especially powerful when coupled, helping you to easily spot trends in payroll costs. The data you’re already processing to pay staff flows seamlessly into Analytics, creating a clear view and allowing particularly in-depth reporting.
Analytics includes flexible dashboards, easy-to-use filters, and the option to save and reapply preferred views whenever needed. It’s never been so straightforward to view (and further drill into) pay element costs such as earnings, statutory deductions, benefits, accruals, and more. These accelerated insights mean you can gather (and share!) findings with colleagues and stakeholders in seconds with presentation-ready reports and dashboards.
Our top five reasons to dig into your payroll data
Whether you want to zero in on less run-of-the-mill situations or capture a holistic view of trends year-over-year, here’s how to uncover those insights to make informed decisions for the future:
1. Explore a clear and concise breakdown of earnings
It’s easy to provide a clear overview of all earning components in seconds using Analytics. This can be as comprehensive or as niche as desired, including data such as the value of benefits or the cost of vacations, expenses, allowances, and more. It’s also possible to review pay-period-over-pay-period payroll costs between departments. This type of reporting can be an important guidepost for allocation of resources within the organization, and the data can also be used to compare against industry benchmarks to know how your business is stacking up.
It’s also possible to look at earning types to potentially reduce expenses, such as spotting a rise in mileage reimbursements. From there, the data can be cross-referenced with employees’ home locations and the information can be used to determine the most cost-effective business location for training and scheduling. Speaking of the investment in staff training, that’s another insight that can be gained through Analytics by examining payroll costs against staff training hours.
Another way to analyze your organization’s earnings is to take a closer look at minimum wage – specifically, when those rates increase – to better prepare for the future. Easily extract any date range of employees’ past hours and earnings. Then, apply the increase in the exported worksheet to forecast the impact.
2. Reconcile monthly benefit invoices against premiums
It may be a task you do often, but there are efficiencies to be found and time to be saved by using Analytics to reconcile monthly benefit invoices against premiums that have been either submitted or deducted to the benefit carrier by employee. You can configure easy-to-navigate dashboards for both employee paid benefits and benefit element types, and the filtering capability allows you to target a specific date range; plus, there’s the handy export feature if needed! Compare this report to a list of active employees on a month-to-month basis to ensure no employees are missed, lessening your organization’s risk and liability of missed coverage for benefits.
You also might want to get more strategic in analyzing your benefits data from a potential savings perspective, because benefits make up approximately 15-30% of payroll costs. Using Analytics, you can explore (per pay or year-over-year) a comprehensive breakdown of benefit costs per employee – essentially, understanding the ratios that make up the full compensation package, including benefits, accruals, earnings, employer contributions, RRSP, and other benefit savings plans. From there, organizations can prepare accurate budgets for future planning. It’s also possible to take a closer look at individuals who may be returning from leave or retiring and the associated labour costs. When benefit rates change or your organization is shopping around for a new provider, another handy way to use Analytics is to examine the business’ year-over-year benefit premium history.
3. Spot trends in overtime
Quickly compare overtime hours – using date ranges, viewing per pay period, or even year-over-year – using Analytics. Through this analysis, it’s possible to uncover a particular time of year where there’s an uptick in overtime hours (and therefore, overtime expenses). From there, you can look at comparative options between paying out overtime versus hiring temporary staff, and the organization can make the most informed decision about what’s right for your unique needs. You’ll also be well-equipped to answer any staff questions of whether or not their overtime was the same this year as it was the year before.
Take a closer look at overtime by defining your earning descriptions. For example, add additional descriptions such as double time, time in lieu, or flex time to capture and track the different cost dimensions. This additional level of description allows for additional trends to emerge and for your business to make better-informed decisions.
4. Know your accrual balance, in real time
Answer the question “what are the vacation accruals versus what vacation has been used?” using Analytics. This information can be critical to your organization, especially if the value of accruals is high or trending upwards – creating the possibility to have to pay out large values of vacation that will impact cash flow. With a seamless Payroll and Analytics integration, the two solutions work together in real time. Meaning: the accrual numbers will update each pay run and can be monitored for increases or decreases. Ensure this report is bookmarked so it’s easy to find and view after each payroll run.
Drill further into your accrual data... if your organization is experiencing higher accruals, use Analytics to identify which departments or cost centres are contributing to that trend in just a few clicks. This data can also be viewed at the employee level, where charts outline the Accrued Year-to-Date (YTD) vacation that’s building up, cross-referenced to what’s been taken. This same view will also show if there are any employees who’ve taken more vacation than they’ve accrued. These insights make it easier for organizations to ensure staff are taking their vacation in the year that it’s accrued and can also prevent overpayments from taking place.
5. Report on statutory deductions with – dare we say it – ease!
We know statutory deduction reporting is mission critical, especially when there’s a timely request for the tally of Employer Health Tax (EHT) or Canadian Pension Plan (CPP) contributions. These requests can span any pay period in the calendar or fiscal year, and they can even be as specific as pertaining to a particular employee. Analytics gives peace of mind in this type of reporting through access to accurate data with – we said it – ease!
Organizations can also find value in looking at their statutory deduction costs for their own accounting purposes, and even for future planning. For instance, a franchisee looking to expand might find examining the tax costs across locations helpful in determining their next expansion and the revenue needed to support that growth.
These are just a few ways to drill into your payroll costs using the flexibility of Analytics in order to gain the insights that are deemed essential to your organization. The answers to these questions (and more!) are at your fingertips – let us help you uncover them. To learn more about how Analytics can help empower payroll professionals, sign up for our interactive webinar with Payworks’ HR & Analytics Specialist, Cindy Tarasow: https://payworks.zoom.us/webinar/register/WN_74j-Bv9ATCSeoKcS5zenHw#/registration.