The Total Economic Impact™ Of Paycom Beti

Efficiency Gains For Payroll Team

Evidence and data. With Paycom and Beti, previously manual processes are now automated, removing payroll professionals from the repetitive payroll cycle, and giving them time to work on projects that add value to the organization and employees.

• Prior to Paycom and Beti, interviewees reported feeling understaffed and would consistently work long hours in order to process the payroll on time and as accurately as possible.
  
  The director of payroll in the manufacturing industry explained, “Before we launched Beti, I would come in on Monday mornings and start the payroll at 7 a.m. and work until 10 p.m. And then on Tuesday mornings, I would come in at 7 a.m. and work right up until the deadline trying to make sure everything was correct. Since we’ve launched Beti, I’m down to 90 minutes and that’s for both salary and hourly. So huge, huge time savings.”
  
  The head of payroll in the healthcare industry explained how they save time with Beti; “Beti is set up on a schedule that I create, so every other Monday, it pulls all of that data automatically at 10 a.m. It saves me time from having to go and create all of these different time and attendance datasets. At 10 a.m., all the payroll information is automatically in there. It’s already pulled.”
• Once payroll was processed, interviewees described the tedious process of auditing for any errors and ensuring that taxes, garnishments, and any other requirements were being properly met and accounted for.
  
  The VP of total rewards and systems in the consumer services agency explained how Beti helped; “When you’re processing payroll, you actually get to see a comparison of this week’s payroll compared to last week, and it shows you flags of what you should be looking at. It also gives you alerts at the top that say, 'You might want to check these people out. They have a net zero check or were terminated and probably shouldn’t be pulled into the payroll.’” With Paycom and Beti, payroll professionals now have a single platform and a single source of truth for all payroll and HR related data and a platform that can automatically compile reports and process payroll.

• A key challenge for interviewees was dealing with errors or changes that needed to happen after checks are printed. Some common types of errors that interviewees cited include punch change requests (when an employee’s number of hours worked is incorrect) and miscalculated time off or vacation requests—both scenarios require multiple sign-offs from the employee and their manager. The ability to flag errors and handle all communications and sign-offs within Paycom was a boon to interviewees and a key way that Paycom helps improve the experience for employees.
  
  The payroll manager in the consumer services industry explained, “It was a lengthy process if we had to go investigate a payroll error, whereas now with Beti, it gives us time to fix any errors before the payroll is actually broken.”
  
  The VP of total rewards and systems in the consumer services agency shared, “We’ve caught a lot of errors and we are fixing their pay using the Approve My Check feature before they’re getting paid, so we don’t have to do any additional work. No retro payments or anything like that. Removing the off-cycle checks is a pretty big deal for us.”

Modeling and assumptions. For the financial model, Forrester assumes:

• Prior to Paycom and Beti, payroll professionals spent 15 hours per week gathering the data and reports needed to process payroll. They would also spend 100 hours weekly reviewing employee paychecks, investigating, and processing any errors, and an additional 5 hours per week printing off-cycle checks.
• With Paycom and Beti, processing payroll is now automated, reducing the time payroll professionals spend on collecting data and processing payroll by 90%.
• With Paycom acting as a common platform across HR and payroll, the number of payroll errors is reduced, along with the time and manual effort required to investigate an error.
  
  Additionally, employees can flag any issues prior to paychecks being cut, allowing the payroll team to make corrections and avoid off-cycle checks. Automation and process efficiencies reduce the time spent on payroll errors by 85%.
• The total cost to print off-cycle checks and mail them to employees is $100 per week.
• The hourly, fully burdened salary for a payroll specialist is $70 per hour.
• Employees will recapture 80% of the time saved for productive work.

Risks. The results of this benefit may vary due to.

• The legacy payroll and HR systems in place.
• The complexity of your current payroll including taxes, garnishments, overtime, union dues, etc.
• Employee adoption.

Results. To account for these risks, Forrester adjusted this benefit downward by 5%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $722,000.

Efficiency Gains For HR And Accounting

Evidence and data. HR professionals also reap the benefits of a consolidated, single platform for HR and payroll. With Paycom, HR professionals have a single platform to manage all aspects of the employee life cycle from onboarding and termination to benefits tracking and enrollment and employee self-service, and can build automation to reduce manual tasks and reduce risk.

• Prior to Paycom and Beti, processing payroll was an “all hands on deck” activity that included resources from HR, accounting and payroll. HR teams often aided in investigations and helped audit benefits while accountants were required to sign off on any changes to paychecks, including updating hours through punch change requests, adjusting vacation hours or properly applying garnishments.
  
  The head of payroll in the hospitality industry explained the efficiencies gained through employees auditing and approving their own checks; “Employees are able to see right away if they feel like they are missing hours, and usually those are corrected before we submit payroll which means we then don’t have to get payroll accounting and our receptionist involved in creating a manual check and mailing it to the location.”
• Beyond payroll processing, HR professionals realize significant efficiency gains from leveraging Paycom as their single platform. By integrating many different systems including payroll, benefits, garnishments, taxes, onboarding and terminations, and employee self-service among others, HR professionals reduce or eliminate many of the annually repetitive tasks and can focus their time and energy adding value to their business and advocating for additional benefits for employees.
  
  The VP of total rewards and systems in the consumer services industry explained how their team is no longer required to prepare the annual total compensation statement; “It was three people working on it for a month and a half before open enrollment. Now [with Paycom], it is off their plate. All we do is communicate it through a Paycom push to remind people once a year to go and look at their open enrollment options, but they can really look at it anytime they want. It’s so cool.”
• Hiring and terminations were a particularly time-consuming process for interviewees, especially in industries with high turnover and a large percentage of hourly workers. With Paycom, managing all of that turnover became easier for HR employees because hiring activities were all contained in the Paycom platform, and organizations built automation into the termination process, reducing manual steps and improving speed and therefore security.
  
  The VP of HR in the hospitality industry explained, “Anytime someone is terminated, that is automatically being pushed out to our carriers so that they can turn off benefits at the end of the month and initiate COBRA for us. This used to be all manual, so all of those things that have taken my people out of the equation have definitely saved us time.”
• A key factor with Paycom versus the legacy systems was the reduced number of reports that needed to be run. The VP of total rewards and systems explained, “We are running 300 fewer reports on Paycom versus our legacy system. And with Paycom, you don’t need to be a technician to create a simple report. You don’t have to have SQL coding experience. Our HR business partners can run reports with no problem.”
• While Paycom did not completely eliminate the labor associated with benefits, garnishments, taxes, etc., the time savings enabled by Paycom allowed interviewed organizations to develop new programs that add value and help employees.

Modeling and assumptions. For the financial model, Forrester assumes:

• Accounting and HR teams spend 25 hours a week on weekly payroll activities prior to adopting Paycom and Beti.
• With Paycom and Beti, accounting and HR teams reduce the time spent on weekly payroll by 80% through automation and by using a single platform for payroll and HR.
• Prior to Paycom and Beti, the composite organization spent a significant amount of resources dedicated to various HR-related tasks.
  • Employees save 650 hours related to benefits and open enrollment
  • Employees save 1,000 hours per year related to onboarding and terminations. This assumes a 30-minute saving per employee at 80% turnover rate.
  • Employees save 200 hours per year related to garnishment calculations and taxes.
  • Employees save 750 hours by collecting all employee questions in the Ask Here feature of Paycom and building out self-service articles to reduce the burden on HR to respond to each question.

Risks. The results of this benefit may vary due to:

• The capabilities and setup of legacy payroll and HR systems.

• The number and nature of the products and services that are consolidated into Paycom.

Results. To account for these risks, Forrester adjusted this benefit downward by 10%, yielding a three-year, risk-adjusted total PV of $482,000.

Cost Savings From Consolidating Legacy Systems

Evidence and data. Paycom provides a single source of truth for all payroll and HR data, and gives HR and payroll professionals, along with all other employees, a single application for all payroll and HR needs. Consolidating with Paycom reduces complexity, reduces the number of vendors and licenses in the environment, and eases the maintenance burden on IT.

• Prior to adopting Paycom and Beti for payroll and HR, interviewed organizations leveraged a wide mix of products and solutions ranging from alternative payroll solutions to niche HR-specific tools, and even using paper and spreadsheets to track certain aspects or details for employees. These disparate systems required their own set of skills to operate and required manual labor to pull reports and produce a comprehensive view of payroll or HR data.
• The VP of total rewards and systems in the consumer services industry explained, “We had a multitude of different systems. E-Verify and I-9 were separate platforms. Onboarding was a separate platform. Employee self-service, manager self-services, documents and data, time and attendance scheduling, time off, benefits, ACA tracking, learning and management were all separate systems. We had over nine separate systems that we consolidated into Paycom.”
• With Paycom and Beti, interviewees were able to improve employee experience by offering a single platform for all HR and payroll data, and generate efficiencies for the teams tasked with producing payroll and managing benefits.
  
  The VP of human resources in the healthcare industry explained their goals for Paycom; “We wanted to make their experience as easy as we could and as efficient as we could, and I think that by having so many options and features within one platform makes their experience easier and more seamless. The employees should be getting paid on time and accurately and I always say we have our moment of truth every other week when we process payroll.”
  
  They added that their front-line workers appreciate the consolidated platform; “Now that everything is in one place it’s a lot easier to direct our front-line associates to just go to Paycom if they have any questions or issues, and we have received overwhelmingly positive feedback since making the switch.”
• The VP of total rewards and systems in the consumer services industry explained how they reduced risk with Paycom; “Just think about all the risk that we reduced by eliminating manual entry. That, in addition to outsourcing garnishments to Paycom and the visibility that employees have during the garnishment process, has greatly increased. And we’ve worked to automate a lot of our payroll processes with Paycom.”
• Customers described using Paycom for other use cases; they were able to sunset internal communication systems and employee engagement platforms, and were able to use custom fields in Paycom to collect relevant employee data and track industry-specific items like credentials and qualifications.

Modeling and assumptions. For the composite organization, Forrester assumes.

• The legacy payroll system cost $12/employee per month and was completely removed.
• Multiple legacy HR systems combined to cost $10 per employee per month and were all replaced by Paycom.
• The composite organization was able to retire other systems that cost $5 per employee per month and leverage Paycom to fill the same role.
• The organization spends 20% of the licensing costs on management and maintenance, including IT labor and any other hardware or software associated.

Risks. The results of this benefit may vary due to.

• The cost and nature of legacy payroll and HR systems.
• The use cases needed for Paycom and Beti.

Results. To account for these risks, Forrester adjusted this benefit downward by 5%, yielding a three-year, risk-adjusted total PV of $2,296,000.

Paycom Services

Evidence and data. Paycom provides customers with a dedicated customer representative who can provide 1-on-1 assistance and make sure the customers’ needs for Paycom are being met.

• Prior to investing in Paycom, interviewees explained that with their previous vendor it would be an additional service charge to have a dedicated representative, and without one it could take over a month to have customer support see your ticket and respond. The VP of total rewards and systems explained that prior to Paycom, “I couldn’t believe the poor service quality that we were receiving from our previous vendor. So, you would ask to, let’s say, create a new file feed because we had a new benefit for open enrollment. You would have to submit a ticket. You would wait six to eight weeks was their typical turnaround time that they quoted you to even get assigned a person to look at your ticket.”
• With the dedicated representative from Paycom, interviewees felt like they had additional personnel working alongside them. They supported making changes to the system, adding new benefits or other features, and even helping brainstorm new ideas. The VP of total rewards and systems explained some of the benefits they experienced from working with their Paycom representative; “I have a dedicated client advisor and these people feel like they’re part of your team because you’re talking to them every day. There’s no ticket that you have to open up. You can just call and say, ‘Hey, I want to pick your brain over this.’” They also explained that the same level of service required a separate contract and payment with their previous vendor.
  
  The VP of total rewards and systems said, “If you were going to another vendor, you have to pay extra for that level of service. That’s an additional cost, but with Paycom, it’s just built in with their subscription fees. That for us has been the game-changer, truly.”

Modeling and assumptions. For the composite organization, Forrester assumes.

• The composite organization had the assistance of one dedicated specialist from Paycom.
• The composite organization experienced the benefit of 80% of an extra FTE from having the support of a dedicated Paycom specialist.

Risks. The results of this benefit may vary due to.

• The cost and nature of legacy payroll and HR systems.
• The use cases needed for Paycom and Beti.

Results. To account for these risks, Forrester adjusted this benefit downward by 5%, yielding a three-year, risk-adjusted total PV of $2,296,000.

Unquantified Benefits

Interviewees mentioned the following additional benefits that their organizations experienced but were not able to quantify:

• Improved employee engagement and retention. Interviewees reported that employees engage with Paycom at a significantly higher rate than they used to engage with legacy systems and were investigating the link between Paycom and employee retention.
  
  The VP of total rewards and systems in the consumer services industry shared that participation in a specific employee benefit program increased by 35% after moving the submission form to Paycom, adding, “We have seen countless times that Paycom pushes render more engagement than text, emails, or intranet articles.” In addition to the increased participation in that benefit, this same customer also saw 99% employee usage of Paycom, nearly 3 times more adoption of mobile app usage (84% amongst employees), 76% participation in the Approve My Check feature (even though it is not a requirement), and a more than 2x increase in participation during a passive open enrollment period (which was also not required).
  
  The payroll manager in the manufacturing industry has started to link employee retention to the usage of Paycom and Beti, explaining, “The sites where we have fully implemented the Paycom experience, where everything is handled through the Paycom app, those employees are staying longer.”
• Improved employee trust. Employee trust is an important factor and can often predict how engaged and productive employees are, and can play a key role in employee retention.⁴ Having consistent, accurate payroll is a baseline expectation for all employees, so when things go wrong, it can have a significant negative impact on employee trust. With Paycom and Beti, interviewees reported fewer payroll issues, greater employee engagement, and the ability to correct issues before final checks were cut, all factors that help improve employee trust and help drive better business outcomes.
  
  The VP of HR in the manufacturing industry explained the employee experience; “Nobody wants their pay to be screwed up. It just doesn’t feel good. So now with Paycom and Beti, employees have a means to see their paycheck and inquire about it ahead of time, giving them a much better experience. And if there is an issue, they can see that the payroll team worked to address it and fixed their check by payday, building trust and providing a much better overall experience.”
  
  Issues or questions about pay can often be contentious, too. The payroll manger in the consumer service industry said, “Beti alleviates all the finger-pointing by providing that transparency for employees because in payroll, it’s always your fault.”
• Efficiency gains for payroll and HR allow those teams to positively impact the business. With significant efficiency gains for both payroll and HR teams, it is important to understand that these teams were not lacking for work once Paycom and Beti were adopted. In fact, interviewees reported that freed up resources could finally dedicate the required amount of time to outstanding projects or other to-do list items that had been on pause because of the significant amount of manual effort to successfully process payroll. Interviewees shared some specific examples of initiatives like adopting an apprenticeship program, building better tracking and reporting capabilities, researching and adopting new benefit programs for employees, among other examples.
  
  The payroll manager in the consumer services industry summed up their efficiency gains this way; “You don’t feel so rushed and everything isn’t always about the timecard. We are able to look into other areas of payroll and it allows time to investigate and update that process that you have been meaning to look into for a while. We are able to focus on other things on the to-do list, whatever those things may be.”
• Improved culture and organizational knowledge about benefits, pay, and following best practices. Interviewees reported that one unexpected benefit of allowing employees to review their paychecks is that employees gain a better understanding and appreciation of their total rewards and total benefits package. Prior to Paycom and Beti, employees were much more focused on their pay and often were not aware of any of the other benefits that their employers were providing, or the value of those benefits.
  
  The VP of total rewards and systems in the consumer services industry explained, “It puts the concept of total rewards in front of employees, so they are not just thinking, ‘My employer only gives me my paycheck.’ It makes them go through the full suite of benefits that we have, and Paycom also has a dynamic tool that shows employees their total rewards statement showing overall compensation and the percentage that is received in salary versus the other benefits.”
  
  Interviewees reported that with Paycom and Beti, employees were generally following best practices better, especially around tasks that directly impact their pay. Getting employees to reliably clock in and out was a significant challenge for all of the interviewees and creates a significant amount of work on the back-end in the form of punch change requests when employees ignore this responsibility. The head of payroll in the consumer services industry explained their experience; “The issue of employees not clocking in and out has gone down tremendously because they are looking at their checks a lot more.”