Does your payroll data support operational decisions?
Does the service and information you are able to access from payroll support your manager’s needs? If the answer is ‘no’, or ‘sort of’ – it is time to head back to the payroll drawing board. HR and payroll data are critical inputs to the efficiency and effectiveness of a business and indeed its leaders; it is fundamental to decision-making on both operational and strategic levels.
Payroll technology platforms, in particular, can make a significant difference in your business’ capability to analyse employee data. IT systems are an extension of our own intelligence, and managers cannot make intelligent decisions if they don’t have intelligent technology systems.
Managerial access to data: The holy grail
In a report released in July 2015 by Harvard Business Review Analytic Services entitled The Big Data Opportunity for HR and Finance, we learn how critical it is that management teams have access to the right data.
HBR Analytic Services report findings from companies such as Spectrum Brands, who employ 13,000 people globally. Companies like Spectrum are leading the charge in blending (and using) HR and financial data. Adia McCarthy, Director of HR systems and technology states, “Big data in HR will allow us to move beyond simple headcount and be more predictive than reactionary. Predictive modeling is the Holy Grail of reporting and analytics.”
At Spectrum, HR and finance combine data pools into actionable analytics that are useful to management. Says McCarthy, “… the CFO is extremely supportive of our efforts to provide full visibility of workforce data and trends to our executive leadership team. HR cannot move fast enough for him in this effort.”
New payroll technologies offer access to this critical information, and can bring lasting and meaningful change to both decision-making and people practices.
Practical examples of HR’s data opportunity
The Harvard Business Review report further cites some excellent practical applications of how this information can be used. Even if your organisation might not be looking at predictive modeling just yet – ensuring data is stored and sorted on a reliable platform sets up the business to consider the possibility down the track.
Following is a sample of some examples found in the report:
- Using performance data, sales data, and employee survey data, retailers determine which employees are most successful and why, then develop pre-hire screening surveys that predict which applicants are most likely to succeed and produce higher sales.
- A restaurant chain conducted a multivariate analysis of financial data and found that futures contracts for all the agricultural commodities it uses have a surprisingly big impact on profitability. It redefined the profile for its buyers and now targets job candidates from top commodity trading houses.
- An electronics manufacturing company built a model that predicts the impact of attrition, wage increases, and profit on each other, to help each factory use site-specific data to set optimal pay rates and better manage thin margins.
Some companies are taking things as far as recording chair movements of their staff to better understand optimal office space designs. As this sample suggests, the possibilities are endless when it comes to the application of data.
What about the basics?
The most fundamental use of payroll service data still sits at the top of every HR directors list: payroll data must assist with budgeting, staff salaries and bonuses. A solid payroll platform will not only provide full compliance management, it will provide other critical functionalities such as budgeting and variance reporting with ease. A solid platform will also offer thorough reporting and analytics, all with a few clicks of the mouse. Additionally, it should provide the scope to ensure this data is available and accessible to the management team to assist them with decision-making processes.
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