New Technology: The Projected Total Economic Impact™ Of Paycom’s Time-Off Requests Featuring GONE®

Avoided Unproductive Manager Hours

Evidence and data. Prior to implementing Paycom’s Time-Off Requests featuring GONE, the interviewees’ organizations’ managers were charged with manual tasks throughout the employee time-off request and approval process. Tasks, such as tallying and recording employee time off, managing staffing levels at popular vacation times during the year, scrutinizing organizational time-off policies, and ultimately making decisions around time off, fell on managers — many of whom did not prioritize these activities as part of their day-to-day responsibilities. Given the tediousness of these tasks, some managers would often put them off as long as possible despite the implications for the requesting employees and the finance and HR staff who needed accurate time-off bookkeeping to do their jobs effectively. These delays — combined with manual data entry — fostered a higher than ideal error rate. Interviewees noted GONE eliminated the need for manual work related to the request and approval process on the part of the manager.

• The payroll manager at a food and beverage organization described their process for employee time-off requests prior to implementing Paycom, which tasked managers to keep track of their employees’ time off using a physical calendar and paper slips their employees would hand in for their requests. The interviewee noted that the bookkeeping around time-off balances resulted in just as much manual work as requests and approvals, stating: “[The managers] would work with HR and send a letter home with each employee that would summarize how many days they had for the upcoming year. So, they’re spending a week just going through days for their employees. It was so much manual work.” After implementing GONE, the same interviewee estimated that managers, depending on how many reports they had, saved anywhere from 16 to 32 hours annually attributable to GONE alone. They summarized, “There are simply much fewer interruptions for the managers [with Paycom].”
• The director of human resources at a retail organization that employs 120 managers noted that legacy request and approval processes for time off resulted in significant distraction and manual considerations for their managers tasked with maintaining appropriate staffing levels at their stores and for shipping/delivery teams. The interviewee estimated that each request took a manager up to 15 minutes given the level of consideration needed to make the decision. The interviewee added, “So if you take as long as take as long as 15 minutes, multiply that by however many employees by however many requests, then yikes!” For this interviewee’s organization, GONE eliminated the need for managers to make these decisions, though the interviewee noted that the flexibility to override GONE’s automated decision-making was appreciated by managers still looking to run their stores the way they liked.
• Using GONE, the officer manager at a manufacturing company noted that their managers no longer had to perform manual time-off-related work. They also established time-off decisioning rules that adhered to their company culture and encouraged employees to take the time off when they needed it with no blackout dates or exceptions.
• The controller at a nonprofit organization characterized Paycom’s Time-Off Requests (along with the rest of the Paycom software) as intuitive for staff at all levels. The interviewee’s organization’s time-off decisioning rules were easily configured in GONE, while managers (who saved time over the previously manual approval process) and employees who needed access to time-off and attendance information could easily access it.

Modeling and assumptions. For the composite organization, Forrester makes the following assumptions:

• Each of the composite organization’s 30 managers manages an average of 12 employees.
• Before Paycom, each manager spends between 5 minutes (low) and 12 minutes (high) per employee per month approving time-off requests. This time includes pulling up the employees’ requests, checking and updating time-off balances, checking staffing levels for requested dates, and making an approval or denial decision.
• The average fully burdened hourly wage for a manager ranges from $32 to $44.
• A 60% to 80% productivity recapture rate as it cannot be assumed that all hours reclaimed will be repurposed toward value-added work.

Results. This yields a three-year projected PV ranging from $17,000 (low) to $76,000 (high).

Productivity Improvements For Finance, HR, And Administrative Staff

Evidence and data. While the managers at interviewees’ organizations saw the benefits of Paycom first due to time savings from reducing manual time-off request and approval tasks, additional personnel who were further down these workflows also gained efficiencies. Interviewees told Forrester that prior to Paycom, HR staff, finance staff, and/or general administrative staff were often left with distracting, manual work because of legacy time-off approval processes. Delays in approvals or errors from manual data entry on the part of the managers forced people in these roles to spend considerable time on tasks like reconciling employee time-off balances, consistently following up with managers to approve their employees’ time-off requests, or, in some cases, simply approving time off on behalf of the manager (despite few details) so they could continue their payroll or HR responsibilities. Interviewees also added that a lack of visibility into information, such as time-off balances, and interconnectivity across payroll, HR, and time and attendance solutions before Paycom also contributed to significant manual reconciliation or “fact-finding” work. After implementing GONE, several interviewees noted that personnel in these roles also saved significant time and distraction.

• Even as a director of human resources, the interviewee at the retail organization often found themselves in the position of continually asking managers to approve their employees’ time off so they could do their own job prior to the GONE implementation. The interviewee explained: “You don’t want to be a nag to people, but when my name came on the caller ID, I’m sure they’d say, ‘What do they want now?’” While the interviewee estimated a savings of 10 hours per month for just themselves, they also noted that the benefit was not just from direct time savings, but also from the reduction in distractions throughout their workday.
• By eliminating the need to manually reconcile and communicate time-off balances to employees with Paycom, the payroll manager at a food and beverage organization estimated that each HR staff member saved nearly 4 hours per month in time previously spent working directly with managers. The interviewee concluded, “We don’t have [administrative staff] for this type of work, so we — me included — have saved two days a month on these kinds of things.”
• The office manager at a manufacturer noted that savings on manual reconciliation alone resulting from GONE saved them 8 hours per month on average.

Modeling and assumptions. For the composite organization, Forrester makes the following assumptions:

• Four HR administrators or finance staff members have historically been tasked with manual reconciliation of employee time-off approvals, balances, and manager outreach.
• Each month, these HR and finance personnel spend between 2 (low) and 4 (high) hours each on these manual reconciliation tasks.
• The average fully burdened hourly wage for an HR administrator and finance staff ranges from $35 to $52.
• A 60% to 80% productivity recapture rate as it cannot be assumed that all hours reclaimed will be repurposed toward value-added work.

Results. This yields a three-year projected PV ranging from $5,000 (low) to $20,000 (high).

Overtime Savings From Fewer Instances Of Understaffing

Evidence and data. By automating the time-off request and approval process with GONE, the interviewees’ organizations eliminated errors related to manual work and legacy processes, ensuring these organizations had staff where they needed them, when they needed them as dictated by the decision rules configured in GONE. Before implementing Paycom, several interviewees detailed instances of understaffing areas of the business due to accidental approval of too many employees on the part of the manager — especially during periods of the year that are popular for time off. This resulted in rescinding employee time off that was previously approved, overtime wages for other employees, or disruption of business operations.

• The director of HR at a retail organization detailed frequent instances in which overlapping time off impacted operations, not only at the store level, but also at the delivery level, therefore affecting customer experience. The interviewee explained: “We are in the rent-to-own business, and we can’t have our delivery staff off at the same time. We also can’t have our account managers off the same time. This used to be an ordeal, especially at some locations. It was quite a balancing act to try to give everybody the time that they want while making sure that not to shortchange ourselves and our customer [experience].”
• The payroll manager noted instances of understaffing the warehouses at the food and beverage organization were frequent, resulting from errors in the very manual time-off approval process. If managers did not log requested time off in a timely manner, employee “no-show, no-calls” to the warehouse resulted in suboptimal operations for that day or week.

Modeling and assumptions. For the composite organization, Forrester makes the following assumptions:

• Before Paycom, an error-related staffing shortage affects 25% of the composite organization’s physical locations (e.g., retail stores, warehouses).
• Of the locations affected by staffing shortages, the frequency of these shortages ranges between one incident (low) to three instances (high) annually.
• For each incident, an additional 10% (low) to 20% (high) staffing is required (through overtime) to maintain operations.
• The fully burdened hourly rate for employee overtime is $39.

Results. This yields a three-year projected PV ranging from $4,000 (low) to $23,000 (high).

Unquantified Benefits

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

• Improved employee experience. Per the interviewees, GONE greatly improved the employee experience by establishing consistent and transparent parameters for time-off requests and instantly making a decision when requests were submitted. Before GONE, interviewees noted that employees would frequently wait for several days only to find out their request was denied, disrupting plans outside of work. In some cases, the request was never approved or denied at all before the employee took the time off, despite the ambiguity of their request status. Interviewees also alluded to disputes between managers and employees related to favoritism in approvals before a transparent, automated set of rules was established with GONE. With Paycom, friction was also removed from the time-off request process, as employees could submit time off from their phones.

• Iteration on time-off decisioning rules to suit current business requirements. Several interviewees explained that their organizations tweaked existing and added net-new decisioning rules to GONE since implementation to align with the current and future staffing needs. Some interviewees highlighted the manual time-off rules override function as particularly helpful to their managers as, at their companies, it was ultimately up to managers to decide how best to run their business.
• Removed the onus on managers to scrutinize and uphold corporate time off policies. GONE automated most time-off decisions formerly required for managers, reducing the need for managers to spend additional time staying current on organizational time-off policies for the employees. Removing this burden on managers inherently reduced the likelihood that poorly received decisions on the part of the employee were made directly by their manager.
• Interconnectivity with other Paycom solutions. Prior to Paycom, interviewees attributed manual reconciliation work and poor visibility into required information to their organizations’ disconnected set of time and attendance, payroll, and HR solutions. Each interviewee noted that their Paycom tools all worked in concert with one another as a complete, single software, greatly facilitating their day-to-day work. The interviewee from the food and beverage organization estimated that they spent only half the time logged in to their Paycom tools than they did with another provider given the intuitiveness and connectivity across the software.

Flexibility

The value of flexibility is unique to each customer. There are multiple scenarios in which a customer might implement Paycom’s Time-Off Requests featuring GONE and later realize additional uses and business opportunities, including:

• Additional value by onboarding additional locations, business units, and acquisitions. While some interviewees noted that additional business units and recent acquisitions for their organizations were seamlessly added to Paycom, there was potential for even more value from both Paycom’s Time-Off Requests and the greater Paycom application in the future as their organizations become larger and inherently more disconnected through this type of growth. The payroll manager at a food and beverage organization noted they saved significantly on now redundant contracts with other payroll vendors by quickly onboarding recent acquisitions to Paycom.

Flexibility would also be quantified when evaluated as part of a specific project (described in more detail in Appendix A).