Payroll Services Best Practices

Introduction from Mark Zisholtz:
It is difficult to overstate the importance of a seasoned, hands-on team of professionals to manage a large payrolling program. Currently, HireGenics manages more than 35 payrolling accounts with large clients, and has, through hard work and a client-centric approach, established a stellar reputation. For this month’s blog article, I decided to ask two of our senior Operations professionals to list their best practices, with a focus on the importance of communication protocol and how important that is to the overall success of a program.

(as told to me by members of our senior Operations team…)

Initial contact to ensure assignment alignment
  *extend formal job offer via phone to establish relationship from day one and to mitigate co-employment risks
* introduction of designated point of contact for each new employee
* support and guidance provided by that POC throughout onboarding process to ensure compliance

Continued contact to ensure new employee assimilation
  * instruction provided on paperless onboarding system (if applicable); completed via computer, smart phone, or smart device
* instruction re: time reporting process to ensure prompt weekly payments
* instruction re: accessing pay information, history, and tax records

First week checkpoint to ensure new employee satisfaction
  * provide opportunity for questions to be asked and answered
* clearly define expectations
* gather feedback on the onboard process; continuous process improvement is key
* assess employee satisfaction with the actual job duties, expectations, and environment

Spontaneous “Thank You” calls throughout the duration of the assignment
  * defined by client culture; may be calls, one-on-one, group meet and greet, etc. In person is almost always the best option, if feasible and consistent with client culture
* provide opportunity for and encourage candid employee feedback
* focus on maintaining strong employee/employer relationship

Additional recognitions throughout the duration of the assignment
  * defined by client culture; may be birthday recognition, exceptional performance, anniversaries
* maintain Employer of Record relationship
* promote atmosphere of “team” as opposed to “contractor;” this is another key component of a successful long-term payrolling relationship

Rapid response to concerns via 1:24 Rule
  * contact employee within one business hour of notification of their issue to acknowledge receipt
* contact employee within 24 hours with resolution or plan of resolution

Communication and management of contract changes, end dates, and extensions
  * always keep employee informed of potential and impending contractual changes/end dates, etc.
* obtain clarity from client before communicating any requested changes to employee
* communicate with employee to understand contractual and assignment preferences, and communicate with client accordingly
* provide full support and reassignment assistance (if applicable) for end of assignment

  * secure updated resume from employee for reassignment database
* discuss redeployment possibilities with client and/or MSP; convey to employee
* maintain relationship with employee post assignment


About the Authors:

Karen Kelley, Director of Operations at HireGenics, is a 22 year industry veteran. She is responsible for developing strong program teams and facilitating continuous process improvement across all of HireGenics’ payrolling accounts.

Brandon Kahele, Program Director and Operations Trainer, is a 10 year industry veteran. He manages HireGenics’ largest payrolling accounts and reports into Karen Kelley. He is responsible for managing program teams, building client relationships, identifying best practices and implementing improvements, and training the Operations team of Program Managers and Program Associates.

Implementation Methodology and Best Practices

Authors: Steve Kusnit and Liz King
Edited by: Mark Zisholtz 

Typically, implementation is the key first step following the close of a deal where the selling organization has the opportunity to demonstrate its competence and make the buyer feel confident in their vendor decision. Hence, the Implementation Team is in prime position to set the working tone of the relationship with a new client before the Operations Team digs in and runs the day-to-day.

However, before we implement a solution, we first look to understand the current state of our client’s contingent workforce management program. The process begins with an in-depth discovery and evaluation in which we review existing workflows to uncover opportunities for process improvements and efficiencies. After the discovery phase is complete, we move into the design and implementation of the solution.

Our implementation experts define our client’s ideal program, future-proofing it to ensure optimal efficiency, automation and program support across the entire contingent labor continuum—from procurement to payment. Then, we map the current state to that future state, develop a roadmap to bring it to life, and begin your business transformation.

Among many other benefits, our approach ensures:

  • Discovery of hard and soft cost savings from process streamlining and re-engineering
  • Reallocation of resources devoted to managing contingent labor, including IT, contracts, buyers, accounts payable, and resource management
  • Implementation of compliance and risk mitigation best practices (note: we design the program to provide auditable data for SOX compliance)
  • Process automation via e-procurement services, enabling hiring managers to spend less time placing orders, approving time and managing spend

Below is a list of Implementation Best Practices that our Implementation Team drafted. These Best Practices are universally applicable to payrolling, IC compliance, MSP, RPO, and other contingent workforce programs.

  • Experienced project team members dedicated to building and maintaining excellent client relationships
  • Disciplined project management based on Project Management Institute (PMI®) principles, which allows for flexibility to fully support client-specific needs
  • Identify key stakeholders and project team members (in the absence of input from the correct resources, projects may slow down, stall or parts of it repeated)
    • Make sure to include everyone that will be critical to the success of the project, which may include:
      • Steering Committees and Stakeholders
      • Program or Project sponsors
      • Hiring Managers (or Business Unit leaders) who will utilize the system
  • Identify pertinent information ahead of time
    • What is making the client switch solutions? What are the drivers?
    • What are things the client would like to have that they did not previously have?
    • Determine the pros and cons of a solution based on amount of labor spend
    • Are there any other client initiatives that may conflict with the timing of this implementation and require shared resources (hence, the timeline and expectations need to be adjusted accordingly)?
  • Plan the project in advance
    • Initially, develop a high level project plan that can be revised and tweaked as more information becomes available
    • Identify potential resources and how best to utilize their skills for project
    • Review lessons learned from previous implementations and implement them, as appropriate
  • Review KPIs and SLAs with the client. Set expectations and engage Operations to deliver!
  • A thorough, multi-channel change management and communications process based on a high-touch, hands-on approach that includes all client stakeholders and program audience members
    • This is key for a successful implementation. Among other reasons, effective change management builds confidence and demonstrates that a proper vendor choice has been made.
    • Ensure that resources are made available to answer user questions
  • Actively listen to the client’s needs, propose solutions, and tell the client when better solutions are available
    • Interview the client and listen attentively to their needs, wants, and desires
    • Pick the client’s brain and ask engaging questions. (Most people are not tech-savvy and have a hard time conveying what they want in a solution)
    • Interject ideas of your own that produce cost savings, enhanced quality, and/or a quicker rollout
  • Perform extensive testing on all systems
    • A GAP analysis should be done on the Legacy system.
    • Testing should include: Smoke, QA, Internal, User Acceptance, Regression, and End-to-End
    • The above testing should be performed on any new, integrated, 3rd party, or downstream applications that will be impacted
  • Get clients and their teams that will be impacted on your side
    • Spread the word, motivate them, show them that the solution will make their lives easier as most people oppose technology changes; Client buy-in on the new program throughout the organization
  • Try to eliminate as many manual processes as possible
    • If the purpose is to become automated; this is a necessary evil
    • Manual processes leave room for a lot of human error
    • It will make reporting and auditing much cleaner
  • Deliver efficient training
    • Develop presentation decks
    • Quick reference guides and FAQs
    • Recorded Trainings
    • Interactive Training
    • Make training FUN. Seriously. Training is far too often boring. Engage the audience. Set the tone!

About the Authors:
Steve Kusnit
is a PMI-Trained, Six-Sigma-Certified Services and Solutions professional with 13 years of experience Implementing and Managing MSP/VMS Programs across multiple industries, including: telecom, energy, transportation, government, healthcare, food and agriculture, pharmaceutical, and retail. Over the past 3 years, he has focused his professional energies in leading many successful Payrolling and IC Validation Program Implementations for HireGenics throughout the US and Canada.

Liz King is an IT Project Manager with more than 15 years of experience implementing MSP, VMS, and ERP solutions. She has a background in project management, business analysis, system testing, and training. In her spare time, she enjoys reading, traveling, salsa dancing, and karaoke.

California Environmental Protection Agency’s Classification Requirements Require an Investment in Your Business

By: Mark Zisholtz
Edited by: Brandon Pavley

This commentary is in reference to content found on the California Environmental Protection Agency’s website. Please visit their site for more information.

Unfortunately, we commonly see misclassified independent contractors who fail to make an investment in their business, such as buying equipment or investing in software. Further, many companies want to engage independent contractors on a personal services contract. While prohibiting an IC from hiring workers to perform the services set forth in a contract does not automatically mean the IC is misclassified and is in fact a common practice, it is also true that the chances of misclassification drop rather significantly if the independent contractor is permitted to hire workers.

Such is the case with the California Environmental Protection Agency, which explicitly requires all independent contractors who want to be on the agency’s “approval list” to have the “proper equipment” (i.e., the IC must invest in its own business) and “qualified personnel to conduct the tests” (i.e., no prohibition against the IC from hiring workers to perform services under the contract).

Oregon Independent Contractor Classification Law Reminds Us What is Important

By: Mark Zisholtz
Edited by: Brandon Pavley

This commentary is in reference to content found on the State of Oregon’s website. Please visit their site for more information.

It is not uncommon to hear procurement or HR personnel claim their independent contractors are compliant because they are a business entity and signed documentation indicating they are an independent contractor. However, nothing could be further from the truth. Take, for example, the State of Oregon, which explicitly states that “[t]he creation or use of a business entity, such as a corporation or a limited liability company, by an individual for the purpose of providing services does not, by itself, establish that the individual provides services as an independent contractor.”

Further, currently sitting in a congressional committee in the U.S. House of Representatives is the Payroll Fraud Prevention Act of 2015 which defines “non-employees” as those who provide services through a corporation or LLC if they are required to create or maintain such entities as a “condition for the provision of such labor or services.” In other words, if the Payroll Fraud Prevention Act ever were to become law in its current form, then an independent contractor would automatically, by operation of law, be deemed misclassified if you required that contractor to form an entity as a condition of providing services!

Moral of the story: look to the substance of the relationship, not the form.