Every payroll team will be familiar with the standard SLAs that their enterprise service providers and global payroll functions fulfill. But what can often leave businesses scratching their heads is when payroll are struggling with a variety of issues, but the SLA metrics seem to suggest everything is fine.
When this happens, it means that the service level agreements in place aren’t delivering a sufficient level of detail and insight into how well payroll actually operates.
CloudPay’s John Pearce regularly uses the phrase ‘Why are my payroll KPIs green, if my payroll team is red?’. This quote perfectly highlights the common issue faced by enterprise service providers and global payroll functions who fulfil standard SLAs, whilst feeling discontented with payroll performance overall.
In this blog, we’ll explore why that’s the case, what can be done about it, and the type of issues that can be highlighted with a new level of KPIs.
The main reason standard service level agreements don’t deliver the level of detail that payroll teams need is because they’re only really focused on minimum standards. Generally speaking, they focus on the basics like timeliness and accuracy, with levels expected to be as high as 99% and often even 100%.
These high-level figures can easily mask any underlying issues within payroll, preventing businesses from understanding how to make improvements. So it’s clear that a more detailed approach to measurement and key performance indicators are needed.
There are so many different potential key performance indicators that payroll teams could use that it can be difficult to know which ones are the most important to pinpoint. At CloudPay, we’ve explored the various options in detail, with the aim of identifying the most relevant metrics, but also those that can be collected accurately and consistently.
The result of this work is a unified data model that we call the Payroll Efficiency Model, within which payroll teams can benchmark their performance at global and regional levels across the following five KPIs:
These five KPIs collectively deliver a much deeper level of insight into payroll efficiency. Additionally, it also helps businesses understand how well their vendors are performing, and the strength of the relationship between the two parties.
Typical issues that can be uncovered through analysis of these key performance indicators (and correlation of results across them) include:
Solving all of these problems means that payroll runs more smoothly, more consistently, on time and meets the needs of the workforce, who expect timely, accurate pay. Furthermore, it supports better planning and decision-making across the business as a whole, especially if global payroll data is integrated into overarching managerial processes across finance and HR.
How does the Payroll Efficiency Model work in practice? And what are the latest global and regional performance figures across all five of these detailed KPIs? Find out by downloading your copy of the Global Payroll Efficiency Index from CloudPay here.