Digital transformations are a major investment in your organization’s future. However, the success of such an implementation can hinge on payroll validation. During this critical step, the project team has the important goal of ensuring that employee paychecks are being calculated correctly. By the time your new system is live, every single earning, deduction, and tax must be accurate.
Payroll testing is a time-consuming process—typically several weeks long. Therefore, if more issues are encountered than expected, the entire project can be delayed if these critical issues are not addressed promptly.
That said, payroll validation must be focused and efficient. We’ve identified 3 keys needed to accomplish an enterprise payroll validation:
Understand that Payroll issues cannot wait to be fixed.
Payroll validation is a critical-path item. Going live with incorrect payroll will lead to backlash and reduce confidence in leadership. This is exactly what happened to the City of Dallas in 2019 when they failed to capitalize on their payroll testing and went live with faulty configuration. As a result, first responders were not receiving their benefits, and they were not being paid properly. This culminated in the story making national news after the president of the Dallas Fire Fighters Association penned an open letter to city officials about the negative impact the issues had on crew morale. Fortunately, Premier was pulled in to resource the project and we secured the benefits that our first responders were entitled to. You can read more about this here.
This story should serve as a warning to all other organizations undergoing a similar transformation. Seldom are there issues that come up during payroll validation that can wait to be solved. Instead, while the project team is all hands-on deck for payroll testing, they should ensure that issues are resolved as soon as possible after discovery to prevent any incorrect paychecks being sent out after go-live.
Establish and enforce expectations across your project team
When validating payroll, having the right people is key. The team tasked with this job should have intimate familiarity with how payroll is currently run, how it will be run in the new system, and the importance of the job they are doing. This knowledge empowers them to more quickly resolve issues so that testing can continue on-schedule. Teammates across the project must also be highly organized so that as defects are discovered, they are quickly logged in a central location that is reviewed at least daily, with clearly defined action items, owners, and deadlines. Accepted tolerances should be documented, helping the team stay focused on a clear goal.
This applies not only to the client side, but vendors as well. Functional consultants, data migration experts, and integration consultants all must be aware of the process so that issues can be addressed effectively, regardless of the root cause. Without involvement from appropriate subject matter experts, a single issue can easily derail testing and, by extension, the entire project timeline.
Use insightful metrics to drive project direction
Due to the high-stakes nature of payroll validation, project leaders must feel confident and secure in their decision to move to the next steps of the project. To do this, they must have access to insightful metrics.
For example, imagine a scenario where legacy and target system payroll deductions, summated across all employees, are equal to the exact cent. Lurking under the surface, however, is a healthcare deduction that is severely in excess, and wage garnishments that are not being deducted at all. In this scenario, at a high level, things may appear fine, but the reality is far more severe when examining at a detailed level. Alternatively, there may be known issues that are affecting variances that are skewing metrics, or metrics for an individual division or agency. As a leader, it is important to ensure that the results are viewed holistically and through multiple lenses so that smart decisions can be made. Failing to do so can lead to false positives and unexpected issues after go-live.
Final thoughts
Keeping these points in mind will play a major part in the success of your digital transformation. While the process does come with risk, when done right, it helps ensure your organization has a seamless transition to your new system and maximizes the benefits reaped from it.
Remember that payroll is not merely data, it has a real impact on the day-to-day lives of your employees, and they rely on its accuracy. We all expect employees to be good stewards of organizational resources and time spent “on the clock.” Likewise, the project leadership need to be the best possible stewards of employee payroll.
Part of that stewardship means finding the right project partners. If you would like to learn more about best practices that we employ at Premier and see if our services fit your needs, reach out to me directly at Shane_Supple@premierintl.com.
