It’s not as costly or risky as many employers think
While self-service payroll technology has been available for more than a decade, its adoption rate among employers remains low. Only 36 per cent of Canadian employers have embraced self-service, according to a July 2009 study on self-service by payroll provider ADP and Environics Research.
Early adopters were predominantly large employers, as switching to self-service was perceived to require significant IT support and substantial change management. But self-service can mean Internet-based, hosted solutions that remove the need for IT support and ongoing maintenance.
There appear to be several myths preventing employers from embracing self-service.
Myth: Self-service is expensive
Self-service provides four distinct areas of potential cost savings: Managing employee records, making changes, tracking employee time and attendance and handling overall systems management — the costs associated with these tasks can be relieved through employee self-service (ESS) and manager self-service (MSS).
At the same time, payroll and HR practitioners can focus less on administrative tasks as they free up time to work on special projects and to contribute to strategic initiatives.
This has been the argument for self-service since its inception, but employers are still reluctant to make the change, thinking the cost exceeds the potential savings. However, if employers could adequately measure the cost of time and effort spent on business processes managed internally, they would see this simply isn’t the case.
For a 500-person organization using payroll and HR ESS, the savings potential is close to $20,000 each year. This is anticipating a 90 per cent adoption rate among employees and a potential annual cost saving of $44 per employee.
Myth: Employees resist change
Research from the Canadian Payroll Association (CPA) indicates nearly nine in 10 employees surveyed said they would accept receiving electronic pay statements, the first step in deploying ESS.
Additionally, 47 per cent of payroll professionals surveyed supported using electronic pay statements.
Despite these statistics, however, even practitioners who recognize the need for self-service in their organization can be reluctant to make the change.
The reasons are twofold. Some practitioners are reluctant to impose change on employees. Also, CPA research reveals 24 per cent of payroll professionals felt employees would be worried about the security of their personal information.
This reflects how acutely aware payroll practitioners are of the private and confidential nature of their employees’ salary and benefits information. The problem is, regardless of practitioners’ concerns, employees want self-service — in part because they’ve learned to love it in other parts of their lives.
Self-service isn’t new to a large number of employees. They use self-service functions in other critical areas of their lives, including managing their finances.
A recent survey from the Canadian Bankers Association shows 45 per cent of Canadians are paying their bills online — a jump of 10 percentage points in just two years.
More than nine in 10 Canadians who visit a bank’s website check their account balances, 85 per cent pay bills and three-quarters transfer funds.
When asked how technology has affected banking convenience, 44 per cent say they value the ability to access their accounts anywhere; 15 per cent value the ability to bank when it is convenient for them; and 25 per cent say they do less running around which saves time and money.
These are significant numbers that demonstrate the value placed on accessibility of information.
For employers unsure of whether to take the leap and adopt self-service, the truth is self-service does not impose — it empowers.
It puts control of information into the hands of those who own the information — employees.
Self-service enables employees to access the information they need, when and where they need it.
Myth: Online means a risk to privacy and security
With today’s online security, including encryption and password-protection, providing pay and tax statements online is far more secure than leaving a pay stub on an employee’s desk, where there isn’t a guarantee that it will end up in the right hands.
The same can be said for mailing out pay statements or tax forms. It’s only when the employee has a direct connection to sensitive personal information that there can be assurance of privacy and security.
Many HR and payroll practitioners want to play a more strategic role in helping their organizations reach their business goals.
Making the switch to self-service can free up time for big picture, strategic work rather than the clerical activities many practitioners are relegated to performing within their organizations.
It is time to embrace and advocate for change.
Janice MacLellan is director of industry relations at payroll services provider ADP Canada and past chair of the Canadian Payroll Association’s board of directors. She can be reached at firstname.lastname@example.org.
Employee FAQs about self-serve
•What are the benefits to using this self-service application?
•How far back can I view my pay history online?
•Will this self-service application mean we no longer receive our pay stubs?
•What are the browser requirements to run the self-service application?
•Will I be able to access this application at home as well?
•How can I make sure this system is secure and will protect my privacy?
•What happens when I resign or retire — am I still able to access this system?