Attached is a study conducted by PriceWaterhouse Coopers that I thought you would be interested in. It talks about the hidden cost of payroll, time and labor, health and welfare, and workforce administration. There are 7 areas that many executives overlook when analyzing true cost of ownership. The cost areas are system installations, system upgrades, system maintenance, process cost, direct labor, direct non labor and indirect labor costs.
Total Cost of Ownership Pricewaterhouse Coopersummersamuels
The document summarizes a study on the total cost of ownership (TCO) of payroll and human resources administration for organizations. Some key findings include:
1) Organizations often underestimate the true costs of administering payroll, benefits, and other HR functions due to hidden costs.
2) Outsourcing multiple HR functions to a single vendor can reduce costs by an average of 32% compared to using multiple in-house systems.
3) Providing employee self-service reduces the TCO of workforce administration by 50% for large organizations compared to those without self-service.
This document discusses how professional employer organizations (PEOs) can help small and mid-sized companies with human resources needs. It finds that the top reasons companies work with or consider a PEO are to help control healthcare costs, allow key personnel to focus on core business functions rather than HR administration, and improve HR services. The ability to offer competitive healthcare benefits at a reasonable cost is the primary driver for many companies to outsource HR functions through a PEO. With rising regulation and healthcare costs, PEOs are becoming an increasingly attractive option especially for smaller businesses with limited HR resources.
This document summarizes a research paper about the implementation of high-performance work practices (HPWPs) in small firms. It discusses two perspectives: 1) the resource-poverty perspective, which argues that smaller firms have fewer resources to implement HPWPs, and 2) the strategic decision-making perspective, which argues that owners of small firms strategically choose to implement smaller, focused bundles of HPWPs based on their expertise and attitudes. The study examines whether the implementation of bundles focused on employee ability, motivation, or opportunity depends on firm size, owner expertise, and attitudes. Surveys of 211 employees and 45 small business owners found that smaller firms do implement focused bundles of HPWPs, and that this depends on
Profitiviti Business Operations Intelligence ArticleSteve Raack
The document discusses a methodology called Business Operations Intelligence that helps companies gain insights into their business operations through data analysis. It involves defining all business processes, including both departmental and enterprise-wide processes. The methodology then ranks processes based on their impact and efficiency to identify opportunities for improvement. Implementing this methodology provides executives with information to make more informed decisions and pursue initiatives that can significantly improve profitability.
This document summarizes key aspects of an article on alignment and compensation. It discusses reasons for high commitment management practices, including increased productivity and reduced costs. It outlines seven practices of successful organizations: extensive training, contingent compensation, self-managed teams, selective hiring, employment security, reduced status distinction, and information sharing. It discusses using compensation to achieve alignment with organizational goals and strategies. Various pay strategies are mentioned, including individual incentives, group bonuses, and creating an "ownership culture". The document advocates aligning compensation with behaviors that further the organization's success and strategic goals.
T&E Expense Management The Best In Class Pillars Of Next Generation Expen...JohannaSchwark
The document discusses next-generation expense management for travel and entertainment (T&E) expenses. It finds that best-in-class organizations have driven lower expense processing costs, higher rates of business travel spend under management, and higher rates of policy compliance. These organizations leverage integration, analytics, and mobile capabilities as pillars of their expense management programs. The document recommends that all organizations develop visibility into T&E spending and formalize key expense management processes.
A business' choice for using an innovation depends on looking into the variables affecting this use and its favorable circumstances. Innovation deployment significantly influences the way business is led, the optimality of asset usage and increase in the organizations competitive advantage. This research is to identify the role Business Processing Management (BPM) play in selected SMEs in Ghana. The method utilized for this investigation was the descriptive research design. This research is exclusively embraced by the utilization of secondary data. The technique for data analysis will be by the utilization of content analysis. The study revealed that the main principles of BPM implementation in the selected SMEs are commitment from management, customer priority, teamwork, and continuous improvement. The study also showed that BPM has a direct relationship with the productivity of SMEs. The main challenges of BPM on the selected SMEs are the lack of resources, lack of experience in quality management, lack of objectives and strategies, Short term objectives concerns, lack of information technology (IT) experts. Since BPM is a broad and an intense concept that needs to be taken seriously when it comes to SMEs ensuring that the firm produces a high-quality goods and services, it was recommended that SMEs needs to have IT experts who can assist in the integration of BPM in all aspect of the business activities.
For some time, HR professionals have aspired to create a “paperless office” with automated technology to create, store, and manage all of the employee information necessary to run a business effectively. Today the technology exists to turn this goal into reality with a desirable Return on Investment (ROI). Current business trends toward environmental sustainability provide the additional impetus to make the business case for paperless HR today, to help support the workforce of tomorrow.
Increasingly, reducing the use of paper in business processes will become a necessary step toward corporate sustainability efforts. Some global and regional companies are pushing sustainability initiatives not only within their own operations, but also out into the supply chain, encouraging vendors and partners to implement greener business practices. “Going green” is a competitive response to changes in social attitudes and to the expectations of customers, employees, and stakeholders.
Because of the many paper-intensive administrative processes in the Human Resources department, it is a great area to embrace corporate sustainability objectives by eliminating paper. Going paperless also saves costs and increases the efficiency and accuracy of HR functions. It can even help with recruiting and engagement—many sought-after job candidates and top-performing employees are passionate about environmental causes. This white paper provides information on the benefits of a paperless HR department and the technology for putting it in place.
Total Cost of Ownership Pricewaterhouse Coopersummersamuels
The document summarizes a study on the total cost of ownership (TCO) of payroll and human resources administration for organizations. Some key findings include:
1) Organizations often underestimate the true costs of administering payroll, benefits, and other HR functions due to hidden costs.
2) Outsourcing multiple HR functions to a single vendor can reduce costs by an average of 32% compared to using multiple in-house systems.
3) Providing employee self-service reduces the TCO of workforce administration by 50% for large organizations compared to those without self-service.
This document discusses how professional employer organizations (PEOs) can help small and mid-sized companies with human resources needs. It finds that the top reasons companies work with or consider a PEO are to help control healthcare costs, allow key personnel to focus on core business functions rather than HR administration, and improve HR services. The ability to offer competitive healthcare benefits at a reasonable cost is the primary driver for many companies to outsource HR functions through a PEO. With rising regulation and healthcare costs, PEOs are becoming an increasingly attractive option especially for smaller businesses with limited HR resources.
This document summarizes a research paper about the implementation of high-performance work practices (HPWPs) in small firms. It discusses two perspectives: 1) the resource-poverty perspective, which argues that smaller firms have fewer resources to implement HPWPs, and 2) the strategic decision-making perspective, which argues that owners of small firms strategically choose to implement smaller, focused bundles of HPWPs based on their expertise and attitudes. The study examines whether the implementation of bundles focused on employee ability, motivation, or opportunity depends on firm size, owner expertise, and attitudes. Surveys of 211 employees and 45 small business owners found that smaller firms do implement focused bundles of HPWPs, and that this depends on
Profitiviti Business Operations Intelligence ArticleSteve Raack
The document discusses a methodology called Business Operations Intelligence that helps companies gain insights into their business operations through data analysis. It involves defining all business processes, including both departmental and enterprise-wide processes. The methodology then ranks processes based on their impact and efficiency to identify opportunities for improvement. Implementing this methodology provides executives with information to make more informed decisions and pursue initiatives that can significantly improve profitability.
This document summarizes key aspects of an article on alignment and compensation. It discusses reasons for high commitment management practices, including increased productivity and reduced costs. It outlines seven practices of successful organizations: extensive training, contingent compensation, self-managed teams, selective hiring, employment security, reduced status distinction, and information sharing. It discusses using compensation to achieve alignment with organizational goals and strategies. Various pay strategies are mentioned, including individual incentives, group bonuses, and creating an "ownership culture". The document advocates aligning compensation with behaviors that further the organization's success and strategic goals.
T&E Expense Management The Best In Class Pillars Of Next Generation Expen...JohannaSchwark
The document discusses next-generation expense management for travel and entertainment (T&E) expenses. It finds that best-in-class organizations have driven lower expense processing costs, higher rates of business travel spend under management, and higher rates of policy compliance. These organizations leverage integration, analytics, and mobile capabilities as pillars of their expense management programs. The document recommends that all organizations develop visibility into T&E spending and formalize key expense management processes.
A business' choice for using an innovation depends on looking into the variables affecting this use and its favorable circumstances. Innovation deployment significantly influences the way business is led, the optimality of asset usage and increase in the organizations competitive advantage. This research is to identify the role Business Processing Management (BPM) play in selected SMEs in Ghana. The method utilized for this investigation was the descriptive research design. This research is exclusively embraced by the utilization of secondary data. The technique for data analysis will be by the utilization of content analysis. The study revealed that the main principles of BPM implementation in the selected SMEs are commitment from management, customer priority, teamwork, and continuous improvement. The study also showed that BPM has a direct relationship with the productivity of SMEs. The main challenges of BPM on the selected SMEs are the lack of resources, lack of experience in quality management, lack of objectives and strategies, Short term objectives concerns, lack of information technology (IT) experts. Since BPM is a broad and an intense concept that needs to be taken seriously when it comes to SMEs ensuring that the firm produces a high-quality goods and services, it was recommended that SMEs needs to have IT experts who can assist in the integration of BPM in all aspect of the business activities.
For some time, HR professionals have aspired to create a “paperless office” with automated technology to create, store, and manage all of the employee information necessary to run a business effectively. Today the technology exists to turn this goal into reality with a desirable Return on Investment (ROI). Current business trends toward environmental sustainability provide the additional impetus to make the business case for paperless HR today, to help support the workforce of tomorrow.
Increasingly, reducing the use of paper in business processes will become a necessary step toward corporate sustainability efforts. Some global and regional companies are pushing sustainability initiatives not only within their own operations, but also out into the supply chain, encouraging vendors and partners to implement greener business practices. “Going green” is a competitive response to changes in social attitudes and to the expectations of customers, employees, and stakeholders.
Because of the many paper-intensive administrative processes in the Human Resources department, it is a great area to embrace corporate sustainability objectives by eliminating paper. Going paperless also saves costs and increases the efficiency and accuracy of HR functions. It can even help with recruiting and engagement—many sought-after job candidates and top-performing employees are passionate about environmental causes. This white paper provides information on the benefits of a paperless HR department and the technology for putting it in place.
This research paper examines the working environment in the business process outsourcing (BPO) sector. A questionnaire was administered to 20 BPO employees to collect primary data on factors like accommodation, transportation, food, timing flexibility, salary satisfaction, job satisfaction, stress and family time. Statistical analysis of the responses found that while most employees were satisfied with facilities, over half faced stress due to inflexible timings and lack of family time, and nearly half were dissatisfied with salaries. The working environment was otherwise assessed as satisfactory by the BPO employees surveyed.
This document discusses organizational effectiveness from a systems perspective. It presents a framework for considering organizational effectiveness that emphasizes the critical roles of systems thinking and learning theory. The framework views organizations as open systems that take in inputs, transform them through internal processes, and produce outputs which then provide feedback. Creating a learning culture is seen as essential for organizations to adapt, innovate, and achieve long-term effectiveness and sustainability.
ONTOLOGY DRIVEN KNOWLEDGE MAP FOR ENHANCING BUSINESS PROCESS REENGINEERINGcseij
It has been a constant human desire to be dissatisfied with the status quo as there is always need to
improve upon the way business is being done. As a result, Business process reengineering is introduced
into organization in order to overcome these challenges of inefficiencies and high running cost. A lot of
problems were encountered during the process of reengineering programmes. One of many factors that are
identified as the possible reason for the failures in most business process reengineering is the lack of giving
much emphasis on the knowledge available within the environment in which the business process is taking
place. In this paper therefore we propose a methodology that addresses this issue through the use
knowledge source map and formal organizational ontology. The organization and business process are
model together to provides most efficient way of utilizing the knowledge in the organization in the event of
business process reengineering.
This document compares and contrasts the Business Process Reengineering (BPR) method and the Kaizen method. BPR involves fundamental redesign of processes to achieve dramatic improvements, while Kaizen focuses on incremental, continuous improvements. BPR is harder to implement and enables radical change, while Kaizen is easier to implement and requires long-term discipline. The document provides examples and details about the methodology and key aspects of each approach.
The document discusses different types of organizational structures:
1. Vertical organizations have a top-down hierarchy with decision-making flowing from senior management down. They can make quick decisions but can be rigid.
2. Horizontal organizations empower employees to make their own decisions with minimal middle management. Collaboration and communication are organic but decisions take longer.
3. Matrix organizations integrate vertical and horizontal structures, maintaining expertise while assigning specialists to projects across departments. This increases contact across disciplines but can cause accountability and loyalty issues.
4. Project-based organizations structure work into time-limited projects with their own hierarchies while maintaining core company functions. This increases flexibility but projects can become isolated.
5. R&D and new ventures require
Internal analysis evaluates an organization's resources, capabilities, core competencies, value chain configuration, and cultural and structural characteristics. It involves analyzing the organization's tangible and intangible assets, industry-specific skills, relationships between value-adding activities, and global product performance to understand sources of competitive advantage. Proper configuration and coordination of activities internationally is key to leveraging these internal factors globally.
Welsh Consultants publishes- Many firms today face with organizational declines at some point in their life cycles because of both external and internal factors. Most often organizations enter the state of decline when they fail to anticipate, recognize and adapt to external and internal pressures that threaten the organization’s existence. As one of the important factors leading firms to decline, crises represent a significant threat to firms’ high priority values and demand a time-pressured response. As an alternative response to the times of crisis, operating turnaround strategies are targeted to enhance a firm’schances of ending the threat and achieving sustainable performance recovery. Operating turnaround strategies can be defined as the set of consequential, directive decisions and actions aiming to reverse a declining business as quickly as possible through asset reduction, cost cutbacks and revenue generating The conceptual scope of this article is determined as examining operating turnaround strategy and its variants in a theoretical frame by reviewing literature. Author, Founder- Manish P
This document summarizes a study that examines the impact of human resource management (HRM) practices on firm performance. Specifically, it evaluates the links between systems of "High Performance Work Practices" and intermediate employee outcomes like turnover and productivity, as well as short- and long-term measures of corporate financial performance. Prior research has found individual HRM practices like training and incentive compensation are positively related to these outcomes. However, this study improves on past work by taking a strategic perspective and analyzing the performance impacts of an organization's entire system of HRM practices. It also addresses methodological issues like simultaneity that could bias past findings. The results provide evidence on whether complementary, system-wide HRM practices can produce economically significant
The document discusses organizational structure and design. It defines key aspects of structure like complexity, formalization, and centralization. It describes classical views of structure including division of labor, unity of command, and departmentalization. It also discusses different types of organizational designs like mechanistic, organic, Mintzberg's configurations including simple, machine bureaucracy, professional bureaucracy, and adhocracy structures. The document provides an overview of factors that influence organizational structure design like strategy, size, technology, environment, and power and politics.
The document discusses organizational structure and design. It covers key elements of organizational design including work specialization, departmentalization, chain of command, span of control, and centralization/decentralization. It also discusses traditional and contemporary organizational designs such as functional, divisional, team, matrix, and boundaryless structures. Additionally, it addresses challenges of designing organizations to keep employees connected, build a learning organization, and manage global structural issues.
The document discusses key concepts related to organization structure including:
- Organic vs mechanistic structures, differentiation, and integration
- How authority operates with the CEO typically holding top authority
- How span of control impacts structure and effectiveness
- Effective delegation and the distinction between centralized and decentralized organizations
- Types of organization structures like functional, divisional, and matrix designs
- Mechanisms for coordinating work including mutual adjustment and liaison roles
- How organizations can improve agility through strategies, customers, and technology
This document discusses the need for evidence-based reward management. It notes that while organizations spend significant resources on pay and benefits, many lack concrete evidence to evaluate the effectiveness of their reward practices. The document reviews literature on evaluating reward impact and identifies a lack of studies providing practical methodologies for practitioners. It then describes research conducted to understand how organizations currently evaluate rewards and why doing so is important. Finally, it proposes a model for evidence-based reward management to help practitioners better review and assess their reward programs.
1. Planning tools and techniques such as environmental scanning, forecasting, benchmarking, and budgets can help managers assess their organization's environment and make predictions about the future.
2. Operational planning tools like scheduling, break-even analysis, and linear programming can help managers allocate resources and reduce risks.
3. Time management techniques involve prioritizing objectives, listing required activities, and scheduling work to make the most effective use of time.
American Express operates in the financial services industry providing credit cards, travel services, and risk management solutions. It targets high earning customers and charges merchants a fee on credit card transactions. The environment American Express operates in is characterized by:
1. High complexity due to operating globally in a niche premium market segment.
2. High dynamism as it seeks to expand its merchant acceptance while facing challenges from competitors offering lower fees.
3. High richness with opportunities to capture more corporate travel customers and transactions.
The multiple forces American Express must deal with across different environments and its goal of market expansion results in a highly uncertain operating environment.
This document provides definitions for over 100 human resources (HR) terms. Some key terms defined include:
- Performance management - The process of planning, monitoring and developing the work performance of employees.
- Recruitment - The process of finding and hiring suitable candidates for employment.
- Training and development - Formal and informal learning activities designed to improve employee performance.
- Compensation - All forms of financial returns, tangible services and benefits employees receive as part of an employment relationship.
- Employee relations - The management of relationships between employers and employees.
The document discusses modern organizational structures and agile organizations. It analyzes different organizational theories including classical, neoclassical, human resource, and modern theories. It then examines classification of organizations using Spiral Dynamics methodology. Specifically, it analyzes organizations through social, cultural, and values perspectives corresponding to different levels of human consciousness development. The goal is to predict trends in organizational evolution and classify organizations based on their characteristics and structures.
20160224 - Automation of Paper Based ManufacturingWilliam Harding
The document discusses the need for LIPH, a manufacturing company, to transition from a manual paper-based tracking system to an automated product tracking system for their heart valve assembly line. It proposes that a strategic plan be developed by subject matter experts (SMEs) using psychological theories of cognition, collaboration, motivation, and learning combined with transformational leadership. The SMEs will need to get stakeholder buy-in while implementing the new system within six months to increase production and quality. The strategic plan will focus on change management and overcoming any resistance to the transition.
Due diligence is important to minimize integration risk. Effective due diligence requires [1] assessing each organization's integration capability and determining if integration is feasible, [2] addressing any capability gaps between organizations before integration begins, and [3] periodically surveying integrated units to ensure tailored organizational development actions. Standard evaluations do not adequately measure human and cultural factors, so a scientific assessment is also needed.
20160307 - Transitioning Manual Operations to AutomationWilliam Harding
The document discusses transitioning a manufacturing company called LIPH from manual to automated operations. Three subject matter experts (SMEs) will lead the project. To gain stakeholder buy-in and address resistance to change, the SMEs will use cognitive flexibility theory and design thinking collaboration. This will help develop a clear problem statement and strategic plan. The plan will define the project scope, timeline, and ensure stakeholder alignment around a shared goal of a successful automated solution.
Comics by
Ana (Hannah) Smith
Timoteo (Luis) Fialho
Maria (Marissa) Kopec
Natalia (Hannah) Goncalves
Adela (Mackenzie) Johnson
Enrique (Nathan) Quitero
Alejandro (Liam) Eagen
Clara (Tiffani) Small
Carlos (Tyler) Corriveau
This document is a collection of photos credited to various photographers, primarily Marcela Palma and taken at different locations. The photos are not described and seem to be unrelated images. The document ends by prompting the reader to create their own presentation on SlideShare.
This research paper examines the working environment in the business process outsourcing (BPO) sector. A questionnaire was administered to 20 BPO employees to collect primary data on factors like accommodation, transportation, food, timing flexibility, salary satisfaction, job satisfaction, stress and family time. Statistical analysis of the responses found that while most employees were satisfied with facilities, over half faced stress due to inflexible timings and lack of family time, and nearly half were dissatisfied with salaries. The working environment was otherwise assessed as satisfactory by the BPO employees surveyed.
This document discusses organizational effectiveness from a systems perspective. It presents a framework for considering organizational effectiveness that emphasizes the critical roles of systems thinking and learning theory. The framework views organizations as open systems that take in inputs, transform them through internal processes, and produce outputs which then provide feedback. Creating a learning culture is seen as essential for organizations to adapt, innovate, and achieve long-term effectiveness and sustainability.
ONTOLOGY DRIVEN KNOWLEDGE MAP FOR ENHANCING BUSINESS PROCESS REENGINEERINGcseij
It has been a constant human desire to be dissatisfied with the status quo as there is always need to
improve upon the way business is being done. As a result, Business process reengineering is introduced
into organization in order to overcome these challenges of inefficiencies and high running cost. A lot of
problems were encountered during the process of reengineering programmes. One of many factors that are
identified as the possible reason for the failures in most business process reengineering is the lack of giving
much emphasis on the knowledge available within the environment in which the business process is taking
place. In this paper therefore we propose a methodology that addresses this issue through the use
knowledge source map and formal organizational ontology. The organization and business process are
model together to provides most efficient way of utilizing the knowledge in the organization in the event of
business process reengineering.
This document compares and contrasts the Business Process Reengineering (BPR) method and the Kaizen method. BPR involves fundamental redesign of processes to achieve dramatic improvements, while Kaizen focuses on incremental, continuous improvements. BPR is harder to implement and enables radical change, while Kaizen is easier to implement and requires long-term discipline. The document provides examples and details about the methodology and key aspects of each approach.
The document discusses different types of organizational structures:
1. Vertical organizations have a top-down hierarchy with decision-making flowing from senior management down. They can make quick decisions but can be rigid.
2. Horizontal organizations empower employees to make their own decisions with minimal middle management. Collaboration and communication are organic but decisions take longer.
3. Matrix organizations integrate vertical and horizontal structures, maintaining expertise while assigning specialists to projects across departments. This increases contact across disciplines but can cause accountability and loyalty issues.
4. Project-based organizations structure work into time-limited projects with their own hierarchies while maintaining core company functions. This increases flexibility but projects can become isolated.
5. R&D and new ventures require
Internal analysis evaluates an organization's resources, capabilities, core competencies, value chain configuration, and cultural and structural characteristics. It involves analyzing the organization's tangible and intangible assets, industry-specific skills, relationships between value-adding activities, and global product performance to understand sources of competitive advantage. Proper configuration and coordination of activities internationally is key to leveraging these internal factors globally.
Welsh Consultants publishes- Many firms today face with organizational declines at some point in their life cycles because of both external and internal factors. Most often organizations enter the state of decline when they fail to anticipate, recognize and adapt to external and internal pressures that threaten the organization’s existence. As one of the important factors leading firms to decline, crises represent a significant threat to firms’ high priority values and demand a time-pressured response. As an alternative response to the times of crisis, operating turnaround strategies are targeted to enhance a firm’schances of ending the threat and achieving sustainable performance recovery. Operating turnaround strategies can be defined as the set of consequential, directive decisions and actions aiming to reverse a declining business as quickly as possible through asset reduction, cost cutbacks and revenue generating The conceptual scope of this article is determined as examining operating turnaround strategy and its variants in a theoretical frame by reviewing literature. Author, Founder- Manish P
This document summarizes a study that examines the impact of human resource management (HRM) practices on firm performance. Specifically, it evaluates the links between systems of "High Performance Work Practices" and intermediate employee outcomes like turnover and productivity, as well as short- and long-term measures of corporate financial performance. Prior research has found individual HRM practices like training and incentive compensation are positively related to these outcomes. However, this study improves on past work by taking a strategic perspective and analyzing the performance impacts of an organization's entire system of HRM practices. It also addresses methodological issues like simultaneity that could bias past findings. The results provide evidence on whether complementary, system-wide HRM practices can produce economically significant
The document discusses organizational structure and design. It defines key aspects of structure like complexity, formalization, and centralization. It describes classical views of structure including division of labor, unity of command, and departmentalization. It also discusses different types of organizational designs like mechanistic, organic, Mintzberg's configurations including simple, machine bureaucracy, professional bureaucracy, and adhocracy structures. The document provides an overview of factors that influence organizational structure design like strategy, size, technology, environment, and power and politics.
The document discusses organizational structure and design. It covers key elements of organizational design including work specialization, departmentalization, chain of command, span of control, and centralization/decentralization. It also discusses traditional and contemporary organizational designs such as functional, divisional, team, matrix, and boundaryless structures. Additionally, it addresses challenges of designing organizations to keep employees connected, build a learning organization, and manage global structural issues.
The document discusses key concepts related to organization structure including:
- Organic vs mechanistic structures, differentiation, and integration
- How authority operates with the CEO typically holding top authority
- How span of control impacts structure and effectiveness
- Effective delegation and the distinction between centralized and decentralized organizations
- Types of organization structures like functional, divisional, and matrix designs
- Mechanisms for coordinating work including mutual adjustment and liaison roles
- How organizations can improve agility through strategies, customers, and technology
This document discusses the need for evidence-based reward management. It notes that while organizations spend significant resources on pay and benefits, many lack concrete evidence to evaluate the effectiveness of their reward practices. The document reviews literature on evaluating reward impact and identifies a lack of studies providing practical methodologies for practitioners. It then describes research conducted to understand how organizations currently evaluate rewards and why doing so is important. Finally, it proposes a model for evidence-based reward management to help practitioners better review and assess their reward programs.
1. Planning tools and techniques such as environmental scanning, forecasting, benchmarking, and budgets can help managers assess their organization's environment and make predictions about the future.
2. Operational planning tools like scheduling, break-even analysis, and linear programming can help managers allocate resources and reduce risks.
3. Time management techniques involve prioritizing objectives, listing required activities, and scheduling work to make the most effective use of time.
American Express operates in the financial services industry providing credit cards, travel services, and risk management solutions. It targets high earning customers and charges merchants a fee on credit card transactions. The environment American Express operates in is characterized by:
1. High complexity due to operating globally in a niche premium market segment.
2. High dynamism as it seeks to expand its merchant acceptance while facing challenges from competitors offering lower fees.
3. High richness with opportunities to capture more corporate travel customers and transactions.
The multiple forces American Express must deal with across different environments and its goal of market expansion results in a highly uncertain operating environment.
This document provides definitions for over 100 human resources (HR) terms. Some key terms defined include:
- Performance management - The process of planning, monitoring and developing the work performance of employees.
- Recruitment - The process of finding and hiring suitable candidates for employment.
- Training and development - Formal and informal learning activities designed to improve employee performance.
- Compensation - All forms of financial returns, tangible services and benefits employees receive as part of an employment relationship.
- Employee relations - The management of relationships between employers and employees.
The document discusses modern organizational structures and agile organizations. It analyzes different organizational theories including classical, neoclassical, human resource, and modern theories. It then examines classification of organizations using Spiral Dynamics methodology. Specifically, it analyzes organizations through social, cultural, and values perspectives corresponding to different levels of human consciousness development. The goal is to predict trends in organizational evolution and classify organizations based on their characteristics and structures.
20160224 - Automation of Paper Based ManufacturingWilliam Harding
The document discusses the need for LIPH, a manufacturing company, to transition from a manual paper-based tracking system to an automated product tracking system for their heart valve assembly line. It proposes that a strategic plan be developed by subject matter experts (SMEs) using psychological theories of cognition, collaboration, motivation, and learning combined with transformational leadership. The SMEs will need to get stakeholder buy-in while implementing the new system within six months to increase production and quality. The strategic plan will focus on change management and overcoming any resistance to the transition.
Due diligence is important to minimize integration risk. Effective due diligence requires [1] assessing each organization's integration capability and determining if integration is feasible, [2] addressing any capability gaps between organizations before integration begins, and [3] periodically surveying integrated units to ensure tailored organizational development actions. Standard evaluations do not adequately measure human and cultural factors, so a scientific assessment is also needed.
20160307 - Transitioning Manual Operations to AutomationWilliam Harding
The document discusses transitioning a manufacturing company called LIPH from manual to automated operations. Three subject matter experts (SMEs) will lead the project. To gain stakeholder buy-in and address resistance to change, the SMEs will use cognitive flexibility theory and design thinking collaboration. This will help develop a clear problem statement and strategic plan. The plan will define the project scope, timeline, and ensure stakeholder alignment around a shared goal of a successful automated solution.
Comics by
Ana (Hannah) Smith
Timoteo (Luis) Fialho
Maria (Marissa) Kopec
Natalia (Hannah) Goncalves
Adela (Mackenzie) Johnson
Enrique (Nathan) Quitero
Alejandro (Liam) Eagen
Clara (Tiffani) Small
Carlos (Tyler) Corriveau
This document is a collection of photos credited to various photographers, primarily Marcela Palma and taken at different locations. The photos are not described and seem to be unrelated images. The document ends by prompting the reader to create their own presentation on SlideShare.
The main instruments for rock stars are guitar, drums, microphone, and sometimes piano, depending on the style of music like country, rock, or blues. Some musicians are naturally talented, but most need hours of practice and lessons - singers see vocal coaches, guitarists study with instructors, and drummers take drumming lessons. Rock stars get paid per performance and based on album sales rather than a salary. Many rock stars live wild lifestyles partying all night and using popular drugs like heroin, cocaine, and pills, though substance abuse is not required to be a successful musician.
The document describes NRG Marketing Group, an established oil and gas marketing company that has been serving the industry for 15 years. In 2011, NRG merged with PetroEvents to combine their marketing solutions and relationships within the oil and gas sector. The company helps clients build their brand and connect with customers through social media management, video production, app creation, and other digital marketing services tailored for the oil and gas industry. They promote networking and collaboration to help clients promote their business and differentiate themselves from competitors.
This document discusses best practices for B2B social media engagement. It emphasizes that social media should focus on public engagement rather than advertising. It also stresses building trust through real conversations and using social insights to spot trends. The document contrasts outbound and inbound marketing, noting that inbound using content and engagement on social platforms can generate leads at lower costs. It provides examples of how companies can connect with networks by sharing valuable content and engaging in ongoing discussions. Tools and strategies are presented for listening to conversations and developing a content and event calendar for social channels.
Este documento presenta el reglamento interno del Hospital San Juan de Dios de La Serena. Establece las normas y procedimientos relacionados con la admisión, estadía y egreso de pacientes, así como los derechos, deberes y horarios. Además, detalla los servicios y áreas del hospital, incluyendo información, atención médica, apoyo diagnóstico y pago por prestaciones. El objetivo es brindar a los usuarios toda la información relevante sobre el funcionamiento y atención del establecimiento de salud.
El boletín informa sobre varios eventos realizados recientemente en el Hospital San Juan de Dios de La Serena, incluyendo la conmemoración de la Semana del Parto Respetado, la participación en un operativo social de la municipalidad, y el primer trekking realizado por funcionarios del hospital al Cerro Grande. También destaca la importancia de la participación ciudadana y el trabajo multidisciplinario en el hospital.
El documento resume las principales noticias y logros del Hospital San Juan de Dios de La Serena durante el año 2016, incluyendo haber obtenido el cuarto lugar a nivel nacional en satisfacción de usuarios, la inauguración de nuevas unidades como la Unidad de Tratamiento Intermedio Pediátrico, y la realización del Decimosexto Encuentro Regional de Prematuros donde 29 niños recibieron el alta del programa. También se informa sobre el primer campeonato de fútbol femenino organizado por el deportivo del hospital.
El documento describe la evolución humana desde los primeros homínidos como Australopithecus hace unos 5 millones de años hasta el Homo sapiens moderno. Explica las diferencias biológicas entre los humanos y otros primates como el bipedismo, el pulgar oponible y la capacidad de hablar. Luego resume las características de especies tempranas como Homo habilis, Homo erectus y Homo neanderthalensis antes de concluir con Homo sapiens.
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1. The study found that the total cost of ownership for in-house administration of payroll, workforce administration, time & attendance, and health & welfare benefits is surprisingly high, averaging over $1,400 per employee per year for large organizations and nearly $2,000 per employee per year for mid-size organizations.
2. Contrary to expectations, administration costs have actually increased rather than decreased since 2003 despite technological advances, as organizations have focused more on technology transformation than process transformation.
3. Outsourcing these functions continues to provide overall cost advantages, reducing total cost of ownership by an average of 18% compared to in-house administration.
4. Utilizing a common vendor or solution to manage
1. The study found that the total cost of ownership for in-house administration of payroll, workforce administration, time & attendance, and health & welfare benefits is surprisingly high, averaging over $1,400 per employee per year for large organizations and nearly $2,000 per employee per year for mid-size organizations.
2. Contrary to expectations, administration costs have actually increased rather than decreased since 2003 despite technological advances, as organizations have focused more on technology transformation than process transformation.
3. Outsourcing these functions continues to provide overall cost advantages, reducing total cost of ownership by an average of 18% compared to in-house administration.
4. Utilizing a common vendor or solution to manage
PwC_TCO whitepaper_Exposing the hidden cost of payroll and HR administration_...Karim Hachem
This document summarizes the key findings of a study conducted by PwC on the total cost of ownership (TCO) of payroll, time & attendance, HR data administration, and health & benefits functions. The study found that outsourcing these functions leads to significantly lower costs compared to in-house administration. Organizations that outsource multiple functions to a single vendor see additional cost savings by avoiding "seams costs" associated with integrating different systems. Many organizations underestimate TCO by failing to account for "hidden costs" like indirect labor and system maintenance.
This document summarizes the key findings of a study conducted by PwC on the total cost of ownership (TCO) of payroll, time & attendance, HR data administration, and health & benefits functions. The study found that outsourcing these functions leads to significantly lower costs compared to in-house administration. Organizations that outsource multiple functions to a single vendor see additional cost savings by avoiding "seams costs" associated with integrating different systems. Many organizations underestimate TCO by failing to account for "hidden costs" like indirect labor and system maintenance.
This document summarizes the hidden costs associated with managing HR processes internally. It finds that the average company spends over $2,000 per employee per year on payroll, benefits, and HR administration alone when managing these processes internally. Hidden costs, like system maintenance and indirect labor, account for 63% of total spending. Outsourcing individual HR processes fails to reduce total costs of ownership, as integration between systems introduces additional expenses. The document advocates taking a holistic approach to HR that considers processes, technology, and people in order to gain efficiencies and better control costs.
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- PEO
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Cost management aims to plan and control project or business budgets through activities like planning, estimating, budgeting, financing, managing, and controlling costs. It covers the full project lifecycle from initial planning to measuring actual costs and completion.
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The document discusses how outsourcing human resource functions, known as human resource outsourcing (HRO), is becoming a key trend that is reshaping the future of HR departments. HRO can help organizations reduce costs while improving HR's strategic impact by standardizing, centralizing, and automating administrative HR processes. The document outlines the benefits of HRO such as cost savings, increased efficiency, and allowing HR to focus on more strategic priorities. It also discusses challenges such as change management and the need for clear communication during the implementation of HRO.
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HR is at a critical stage in its journey - from transactional back-office operator to true business partner. But the function has hit a roadblock. Recent research suggests that in many companies HR teams are still not adding as much value to the business as they could.
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High involvement work practices (HIWPs) are a set of interconnected human resource practices aimed at improving employee performance through increasing skills and motivation. They generally involve high skills requirements for jobs, team-based work designs, and incentive structures. HIWPs allow employees more input and organizations to optimize abilities efficiently. They are connected to workplace changes and are a constructive model for high performance work systems. HIWPs can improve competence and commitment while making organizations more dynamic and adaptable to change.
Similar to 2011 Total Cost of Ownership Study PwC (20)
1. The hidden reality
of payroll & HR
administration costs
Exploring hidden cost
drivers and characteristics
of cost-effective
organizations
January 2011
3. Executive overview
Do you know how much your In this white paper, we’ll break down Past studies have focused exclusively
organization is really spending on the different cost drivers of payroll on large organizations (more than
and HR administration and lay out 1,000 employees). For the first time,
payroll and HR administration?
the strategies that are making some the inclusion of mid-size organizations
Chances are you may not be organizations more cost-effective at in our most recent study provides
considering major cost components these functions. additional insight into this issue, and
related to administering these has allowed us to also measure baseline
important functions and may As a general rule, we have found that TCO costs for organizations between
be spending more than you organizations tend to underestimate 100 and 1,000 employees.
the true expense (the “total cost of
think as a result.
ownership,” or TCO) of processing As with previous studies, our current
payroll, administering employee health TCO study analyzed the TCO of
and welfare benefits, and managing key payroll and HR administration
other key HR systems and functions. functions. The new data from this
year’s study, collected from 279
While most organizations consider costs participating organizations, shows
such as a payroll department’s staff that administration of payroll (PR),
or the acquisition costs of a new ERP workforce administration (WA), time &
solution, many fail to recognize certain attendance (TA), and health & welfare
“hidden” costs necessary for operating benefits (H&W) remains expensive for
and integrating these interdependent employers—and it has gotten costlier
processes. Additionally, organizations over the years, despite a number of
often apply separate technology and technological advances designed to
process solutions to these individual diminish costs.
administration functions without
considering how those solutions work
with each other. This fragmentation
drives up administration costs through
task overlap and other inefficiencies.
For nearly a decade, PwC, with
the sponsorship of Automatic Data
Processing (ADP), has studied these
TCO costs and how to mitigate them.
1 The hidden reality of payroll & HR administration costs
4. Although these functions are expensive, In addition to the above findings,
analysis of data collected in these which are discussed in detail in this
PwC studies has uncovered several white paper, analysis of the data
opportunities for increased cost collected for this study also confirmed
effectiveness. The top cost reduction that two of the key findings of the
strategies, measured by overall earlier TCO white papers continue
TCO, are: to present opportunities for increased
• Outsourcing—organizations cost effectiveness:
managing payroll, workforce • Providing payroll and HR self-service
administration, time & attendance, functionality to employees—this
and health & welfare benefits in- strategy results in a 50% lower TCO
house using premise-based or hosted of workforce administration for large
software solutions spend on average organizations compared with peers
18% more administering these managing the function without
functions than organizations that these features
outsource1 these functions • Integrating time & attendance
• Utilizing a common vendor with payroll—this leads to a cost
or solution—organizations efficiency of 14% over a manual
administering these functions in- approach or an approach that is
house using software solutions from not integrated
multiple vendors spend on average Furthermore, the current study
18% more than those organizations clearly suggests that cost effectiveness
administering them in-house using stems from comprehensive process
a common vendor. Organizations transformation, not just technology
outsourcing multiple functions to a innovations. The required change isn’t
single vendor see even stronger cost always easy, but significant financial
efficiency—on average 32%—versus benefits may await for organizations
organizations using a multiple ready to really embrace and implement
vendor or “best of breed” in-house these changes.
approach 1. The term “outsourcing” in this paper specifically refers to
outsourcing to ADP as this study used only ADP clients to
measure the TCO of organizations outsourcing payroll and
HR functions.
2
5. Methodology
This primary research study includes PwC also conducted multiple follow- • Time & attendance (TA):
data collected from 279 participating up calls with respondents to verify, The process of collecting, reviewing,
organizations, ranging in size from clean and complete data. In total, PwC submitting and approving time
100 employees to more than 100,000 performed more than 500 phone and reporting data, including employee
employees. This study marks the fourth email follow-ups to clarify completed hours worked, paid time off
installment in a series during which participant data. This approach enabled (vacation, sick, holiday) and
PwC has surveyed more than 600 respondents to provide total costs,
leave balances.
organizations. Previous studies occurred rather than just labor or system costs.
in 2003, 2004, and 2006. • Health & welfare
administration (H&W):
The current study set out to measure the The data The administration of employee
Total Cost of Ownership (TCO) of four PwC defined TCO in a manner H&W benefits and programs
core business functions—payroll (PR), that broke down total cost into its including open enrollment and life
workforce administration (WA), time & component parts. For the purposes event status change maintenance.
attendance (TA) and health & welfare of this study, the four core functions
administration (H&W)—and to analyze are defined briefly, as follows: Collectively, these four components
factors impacting these costs. Because • Payroll (PR): The process of provide a comprehensive measure
this study focused only on TCO, areas collecting and entering data of TCO of payroll and HR
such as quality of administration were administration costs.
related to employee hours worked,
not addressed.
determining taxation, calculating
In addition to measuring the TCO of
gross and net pay, and distributing the four processes, and providing an
PwC conducted this TCO assessment
primarily through use of a confidential compensation. overall TCO, the current study sought to
web-based questionnaire administered • Workforce administration update the original studies conducted
from May to August of 2010. Senior (WA): The maintenance and in 2003, 2004, and 2006, especially in
financial and HR executives (i.e., CFOs, administration of the core HR light of significant market changes in
VPs of HR, VPs of Finance, Directors of the delivery, technology, and scope of
database (often referred to as the
Payroll and Controllers) were invited HR systems since 2003.
Human Resource Information
to participate, and in cases where an
Systems or HRIS) and the activities Respondents were asked to answer
organization had multiple respondents
provide input, we created a single associated with maintaining questions that quantified all one-time
consistent response. Many organizations employee information and various and ongoing costs for the areas of
also participated in phone interviews processing activities such as payroll, PR/WA/TA/H&W administration.
conducted by a PwC representative. health & welfare administration, and Detailed component descriptions were
other HR activities. provided in the survey itself as well as
via personal follow up from PwC where
necessary. PwC contacted participants
directly when data fell outside the
normal range of responses and
normalized data where necessary.
3 The hidden reality of payroll & HR administration costs
6. Profile of participants
279 organizations (consisting of 205 organizations that do not outsource these
functions and 74 organizations that outsource to ADP) participated in this study.
120 (43%) are classified as large organizations, with more than 1,000 employees;
159 (57%) are classified as mid-size organizations, with 100–1,000 employees.
Figure 1. Survey participants by organization size
12%
29%
12%
100–300 employees
18%
301–1,000 employees
1,001–2,500 employees
29% 2,501–5,000 employees
5,001 + employees
Note: Percents may differ slightly from other figures in the paper due to rounding.
The larger sample in the 100–1,000 Because of the economies of scale we
space is due to the larger number see in larger organizations (which are
of organizations operating in these discussed within this paper), when we
segments, and the need to augment compare the TCO of organizations that
the work completed in previous studies, outsource to organizations that use
which focused exclusively on large in-house solutions, it was important
organizations. to normalize the results for the effects
of size—in other words, we compared
The term “outsourcing” in this paper the results as if both groups had
specifically refers to outsourcing to organizations of similar size.
ADP as this study used only ADP clients
to measure the TCO of organizations All participating organizations are
This publication has been prepared for general outsourcing payroll and HR functions. U.S.-based companies or subsidiaries or
guidance on matters of interest only, and does The study did not evaluate, and thus business units of non-U.S. companies,
not constitute professional advice. You should
findings cannot be directly applied to, and come from more than 17 industries,
not act upon the information contained in
this publication without obtaining specific ADP’s HR business process outsourcing with the most prevalent industries
professional advice. PricewaterhouseCoopers LLP offerings. PwC makes no representation being manufacturing (15%), healthcare
(PwC) has exercised reasonable professional that the comparative key findings of (13%), and finance, insurance and
care and diligence in the collection, processing, this survey can be generalized to other real estate (10%). Federal and state
and reporting of this information. However,
payroll and HR outsourcing providers. governments were not specifically
data used from third-party sources has not
been independently verified or audited. No addressed in this study. This study,
representation or warranty (express or implied) Organizations surveyed used a wide like previous studies, is focused only
is given as to the accuracy or completeness of range of platforms and solutions, on costs.
the information contained in this publication, including approximately 65 platforms
and, to the extent permitted by law, PwC, its
in payroll alone. Payroll vendors This white paper has been researched
members, employees and agents do not accept
or assume any liability, responsibility or duty represented in the in-house analysis and prepared by PwC. ADP is the
of care for any consequences of reliance on include the market-leading software sponsor of this TCO study.
information contained in this publication. vendors.
4
7. Key findings & recommended
strategies to reduce
administration costs
Four key findings in connection 1. In-house administration of payroll, 4. Utilizing a common vendor or
with the cost of administering workforce administration, time solution to manage multiple
& attendance, and health & functions, rather than leveraging
payroll and HR in-house surfaced
welfare requires a surprisingly a “best of breed” approach or
during our analysis of the data large commitment of time and maintaining disparate legacy
collected in the study: resources—typically over $1,400 per systems, can deliver tangible
employee per year (PEPY) for large cost efficiencies—organizations
organizations and nearly $2,000 administering these functions using
PEPY for mid-size organizations. software solutions from multiple
• “Hidden costs,” as defined below, vendors spend on average 18%
continue to account for more than more than those organizations
50% of the TCO of administering administering them in-house using
these functions in-house. a common vendor. Organizations
outsourcing multiple functions to a
2. TCO for payroll is actually single vendor see even stronger cost
increasing—contrary to our efficiency—on average 32%—versus
expectation, and despite organizations using a multiple vendor
technological advances, or “best of breed” in-house approach.
administration costs have actually
increased rather than decreased In the remainder of this section, we will
since 2003 as organizations focus on explore each of these findings, and their
technology transformation rather implications for organizations.
than process transformation.
3. Outsourcing continues to deliver
overall TCO advantages—using
in-house payroll, workforce
administration, time & attendance,
and health & welfare solutions
increases TCO by 18% on average.
5 The hidden reality of payroll & HR administration costs
8. In-house administration of payroll, workforce administration, time
& attendance, and health & welfare requires a surprisingly large
commitment of time and resources
This study, like PwC’s previous benchmark analyses, showed that many organizations
may be unaware of the true expense of administering the PR, WA, TA and H&W
functions because not all costs are readily visible. Organizations may find that,
upon detailed examination, their actual costs far exceed their expectations, by
up to several hundred percent.
Visibility into the total costs, especially across functions, is low in part because
these related functions are often “owned” by different functional leaders (Finance,
HR, IT). Accordingly, many organizations make decisions about the technology
and sourcing that work best for the individual function without consideration of
the potential synergies across the enterprise.
A complete cost analysis should • Indirect labor costs—Cost of
consider the following types of labor for employees not directly
costs across all four functions: related to the payroll and HR
• System installation costs— departments supporting these
The one-time costs related functions in the field (i.e.,
to the initial acquisition and collecting, approving and
implementation of an organization’s preparing employee hours for
PR, WA, TA, and H&W systems payroll; distributing paychecks;
• System upgrade costs— answering employee questions
The periodic acquisition and about benefits, etc.)—where
implementation costs related to employees are typically spending
upgrading to a more current version only a fraction of their time on
of the PR, WA, TA, and H&W systems these activities
• Direct labor costs—The cost of • Outsourcing costs—The total
labor (salary plus benefits) of the annual costs of any outsourced
direct staff necessary to support the services related to processing of
PR, WA, TA, and H&W functions PR, WA, TA and H&W such as
tax filing, paycheck printing, etc.
• Direct non-labor costs—The
total costs of consultants, vendor
fees and facilities, G&A, and
corporate overhead related to the
PR, WA, TA, and H&W functions
• System maintenance costs—
The IT costs specifically related to
maintaining the current systems
6
9. When all of these costs are included, large Economies of scale lead to a gradual
organizations (more than 1,000 employees) shift in TCO
spend $1,403 combined PEPY on the four key
functions surveyed and mid-size organizations While we show two segments for organization size
(100–1,000 employees) spend $1,953 PEPY as throughout this study, and the difference in results by
shown in Figure 2. segment can appear quite dramatic, we find that economies
of scale within segments are generally more gradual. In
centralized processes like PR and WA, we find that these
economies occur quite smoothly. In more distributed
Figure 2. Average TCO per employee per processes like TA, however, they are not always as apparent.
year by function for organizations managing
the process in-house Figure 3. In-house payroll TCO per paycheck by
$1,953
organization size
$34
$348
$1,403 $22
$312 $21
$18
$221 $17
$484
$321
$354
100–300 301–1,000 1,001–2,500 2,501–5,000 5,001–15,000
Employees
$809
Note: The trend line depicts the gradual decline of TCO per paycheck as organization size increases.
$507
It is no surprise that large organizations achieve greater
economies of scale, and have lower TCOs per employee.
With the amount of centralized labor required for these
Mid-size Large functions, larger organizations are better able to a) have
organizations organizations an individual staff role support more employees; and b)
develop specialization among staff roles to further drive
Health & Welfare (H&W) Workforce Administration (WA) efficiency. Systems spending results also demonstrate the
Time & Attendance (TA) Payroll (PR) impact of size, as systems costs can be spread over a greater
number of employees.
7 The hidden reality of payroll & HR administration costs
10. Hidden costs account for more than Hidden costs drive up the total TCO of these functions beyond
50% of the payroll TCO what conventional wisdom generally suggests. The largest
driver of TCO for PR, for instance, is labor costs, specifically
When evaluating their current or potential future systems, indirect labor costs. The indirect time of employees to
most organizations fail to consider the significant costs perform such tasks as approve and assemble submitted time
beyond the direct labor needed to use the systems and the for processing, distribute paychecks, and maintain the core
cost of the systems themselves. Overlooking these “hidden” PR system represents a substantial cost—nearly $10 per
costs could result in an underestimate of 50% or more as paycheck for both large and mid-size organizations.
shown in Figure 4.
Analogous sets of hidden costs apply to the other processes
Figure 4. Breakdown of TCO by cost type we examined, including H&W, where business managers,
HR professionals, plant managers, supervisors, and others
are involved with activities such as enrollments, life event
changes and plan support.
“Visible” costs
“Seams” costs
49%
When viewed individually, each of the four processes
35% contains unrecognized expense. But there is a bigger picture
here, too, as the inefficient interaction between processes
creates additional costs at the “seams.” The administration
functions covered in this study are interdependent and rely
on one another to work. Seams costs refer to the activities
organizations must undertake to provide integration between
and among various processes, and occur when there is a
need to implement a new interface or manually support
or otherwise maintain the interaction between processes.
51% We have differentiated these “seams” costs from “hidden”
“Hidden” costs
costs because seams costs refer to costs incurred from
65%
operating separate processes and systems within a single,
interdependent business environment—and both have
been captured in TCO.
Mid-size The 2006 PwC study identified these “seams” and quantified
organizations their costs and found that, among the four processes we
have studied, the average organization was spending
Large approximately $100 per employee per year. The current
organizations study, which evaluated PR, WA, TA, and H&W functions
simultaneously, suggested that organizations with seams
experience higher costs—$200 per employee per year or
more—to, among other things, get disparate systems
working together.
8
11. Figure 5. Average cost of integrating core HR systems
Organizations with software integration “seams” face an increased TCO of $200
per employee per year
Time & Health &
Payroll HRIS
attendance welfare
Denotes integration and data flow required between different HR systems
The TCO for payroll is actually increasing
Most would expect PR TCO to have dropped since 2003, the year of PwC’s
initial benchmark study. A focus on improved technology, new delivery models,
department cutbacks, and other factors should have reduced PR TCO over the
years.
But that has not happened. In fact, the TCO for PR has actually risen a full $1
per paycheck since 2003 for large organizations that use in-house solutions.
The increases are primarily driven by the hidden costs described in the section
above. TCO for mid-size organizations and functions beyond payroll was not
measured in the initial 2003 study, so TCO trending for those segments cannot
be included in this study.
Figure 6. Average TCO per paycheck in 2003 compared to 2010 for
large organizations managing payroll in-house
al
Actu
+6%
Ex
pe M
ct ark
at e
io t $17
n
$16
2003 Study 2010 Study
9 The hidden reality of payroll & HR administration costs
12. Additional costs lurk in the mismatch Findings on Software-as-a-Service
of technology and business process delivery models
Because organizations have tight budgets and timeframes, Software-as-a-Service (SaaS) is a prominent delivery
they often implement technology improvements without model that has gained momentum since we published our
taking into account the impact of technology on business initial TCO study in 2003. This deployment model enables
process. Technology alone is viewed by many as the sole organizations to host applications as well as store and manage
solution to cutting costs. However, by implementing or their data on remote, virtual servers, rather than on their
upgrading technology, whether in traditional or new in-house computers (premised-based model). Some software
technology models (such as Software-as-a-Service or SaaS), vendors now offer their solutions exclusively through a SaaS
organizations will likely incur additional, unintended costs— or on-demand model accessed via any Internet connection,
such as manual activities to conform technology to existing while other vendors provide customers a choice of a SaaS or
processes, to accept customization within the organization, or premise-based delivery model.
to link the SaaS technology to existing technology within the
enterprise. This study found that SaaS helps reduce costs for many
organizations—but only to a point. It is clear that while SaaS
It seems self-evident that organizations would seek to can reduce a mid-size organization’s total administration
employ technology solutions that best support their business costs over a premise-based or traditional software model,
processes. But in reality it often does not work this way. organizations outsourcing process functions such as PR
and H&W administration still demonstrate additional cost
Many organizations have not matched their business savings over organizations leveraging a SaaS model. Our
processes with technology and thus cannot take full analysis also showed that the benefits of SaaS models, when
advantage of the applications available to them. The results deployed without the added benefit of process outsourcing,
of the study suggest that many organizations need to focus taper off as organizations get larger and actually provided no
on process redesign when they decide to change software. TCO savings, on average, over on-premise software solutions
Failure to do so drives both the hidden and seams costs for large organizations with more than 1,000 employees.
described above. These findings reinforce the discussion above regarding the
importance of process transformation in conjunction with
technology investment to reduce administration costs.
10
13. Outsourcing continues to deliver overall TCO advantages—using in-house payroll, workforce
administration, time & attendance, and health & welfare solutions increases combined TCO
by 18% on average
Consistent with the findings of our prior Mid-size organizations that use outsourced solutions demonstrate a lower TCO
studies, the current study shows that across the comprehensive bundle of the four processes—PR/WA/TA/H&W—
outsourcing is a cost-effective way to than organizations that use in-house solutions. Given the extensive bundling
administer these four functions. It is of solutions in this segment of the market, this comprehensive approach is the
more cost effective than the various in- most accurate approach for cost analysis.
house solutions we reviewed. This study
shows that organizations using in-house Figure 7. TCO (PEPY) comparison by method across all four functions
solutions for PR, WA, TA and H&W
spend on average 9% more (for mid-size
organizations 100–1,000 employees) 18% Higher TCO
and 27% more (for large organizations
over 1,000 employees) than those that
use outsourced solutions. Of course,
costs for any individual organization
depend on the specific circumstances
of the functions outsourced and the
$1,634
organization’s needs.
$1,388
In our analysis, organizations that
outsource experience lower direct non-
labor costs, indirect labor costs, and
system maintenance costs (“hidden”
costs). These efficiencies are likely
due to the strong process governance
framework and increased process Organizations Outsourcing Organizations Managing
HR & Payroll HR & Payroll In-House
standardization that is typical in the
outsourcing model.
Even allowing for economies of scale,
where TCO drops as organizations are
better able to spread labor and systems
investments, large organizations that
outsource core HR processes see an
additional cost benefit when compared
to in-house organizations.
11 The hidden reality of payroll & HR administration costs
14. Utilizing a common vendor or solution to manage multiple functions delivers tangible cost efficiencies
For many years, the HR community Figure 8. TCO (PEPY) comparison by platform type for payroll,
has suspected that integrated PR, workforce administration, and time & attendance
WA, TA and H&W functions cost less
to administer than separate point
solutions. The survey empirically 18% Higher TCO
confirmed that conventional wisdom. 32% Higher TCO
This applies both to in-house solutions,
and, to an even stronger degree, to
organizations that outsource multiple
functions.
$1,202
Unfortunately, for most organizations, $910
$1,020
common platforms remain a missed
cost-savings opportunity. In fact, our
analysis of the common platform
approach could not look across all
processes because there were simply
not enough organizations with a
common platform for all four processes. Outsourcing Solution—Common Platform
However, sufficient data is available In-House Solution—Common Platform
to evaluate the impact of a common In-House Solution—Multiple Platforms
platform for three of the processes (PR,
WA, and TA) as shown in Figure 8.
Additional cost efficiency from using a common
platform provided by an outsourcer
As shown above, organizations using multiple in-house platforms
experience a TCO that is 18% higher than organizations using a common
in-house solution and 32% higher than organizations outsourcing these
three functions to a single vendor.
In large organizations, the impact was even more dramatic. In-house users
on a common platform experience a 29% higher TCO compared to peers
outsourcing the same functions to a single vendor.
12
15. Looking down the road Figure 9. The lack of systems to manage key HR functions
The need for seamless integration of
payroll and HR administration functions
Succession
will become even more acute in the Planning
coming years. As organizations add
additional solutions to their mix for Compensation
managing automated payroll and HR Management
administration—such as recruiting, Performance
talent management, etc.—the lack of Management
a common platform, and the resulting
cost inefficiencies, is likely to increase. Learning Management
System (LMS)
Of the organizations participating Employee Self-Service
in this study, more than half had no
automated solution for performance Applicant Tracking/
management, compensation Recruitment
management, or learning management.
In addition, more than eight in 10 had Benefits Tracking/
Data Maintenance
no automated solution for succession
planning. Core HRIS
0% 20% 40% 60% 80% 100%
Percent of organizations without a system or solution to manage the HR function listed
Large organizations Mid-size organizations
13 The hidden reality of payroll & HR administration costs
16. If organizations
continue down the
path of pursuing best
of breed strategies,
they will continue to
invest in a philosophy
that produces hidden
and seams costs.
14
17. Conclusion
Whatever solution an organization chooses, organizational design and process
improvements—in conjunction with straight technology investments—will better
address the hidden costs of HR management. Additionally, a comprehensive
evaluation of the integration needs across payroll, workforce administration, time
& attendance, and health & welfare benefits administration rather than individual
process assessments, will allow organizations to identify interdependencies that
can result in reduced costs for the overall solution. Better understanding of the
sources and size of the hidden and seams costs in an organization, and addressing
those process and technology options, will allow organizations to realize their
objective of reducing TCO.
15 The hidden reality of payroll & HR administration costs