Making Payroll Management a Strategic Part of Human Capital Management

Managing payroll has long been viewed as an administrative task, time-consuming and focused on ensuring that everyone is paid correctly and on time. In fact, in the American Payroll Association’s most recent annual study, the main metrics tracked for payroll performance are payroll cost per employee, payroll processing accuracy rate and dollar value of overpayments – all of which focus only on cost or accuracy. So payroll management is rarely viewed as having any strategic value to the business and typically is assigned a low priority in finance, HR and payroll departments. The payroll process is elevated in importance only when errors are made that result in people being paid or taxes being withheld incorrectly.

That perspective is changing now, as human capital management (HCM) plays an increasingly critical role in attracting and retaining talent and as processes and information become ever more interconnected. In this new environment, payroll management has an enhanced role. As a part of the system of record in every company, payroll data can be connected to information in core human resources management, workforce management and talent management systems to help create a more complete view of human capital for executives and managers of organizations.

In addition, its history conveys on payroll management a unique status in human capital management.  Having found it too cumbersome as an internal system, many organizations outsourced their payroll functions to various providers. Now, however, with the rise of easily accessible cloud computing that does not require significant in-house administration, many are re-evaluating payroll as a process that can be integrated with other related ones in a cloud-based HCM strategy.  Doing so adds significant value in that both payroll process and payroll data then are connected to the unified HCM solution, enabling employees, managers and executives to use both in ways they have not been able to before – such as streamlining the pay-for-performance process. And with the rise of powerful suite-wide analytics tools, organizations can do much more useful analysis across all HCM data, including payroll, and use the results as part of compensation management efforts to make better decisions.  Our most recent benchmark research into compensation found that 69 percent of organizations identify payroll as the number-one operational system to integrate. Further, our research found that many organizations place a strong importance on the compensation process, which is closely tied to payroll, to drive efforts to develop successful pay-for-performance and talent management initiatives across their companies.

Due to the relative novelty of this advance, the market today lacks empirical information to guide organizations as they seek to evaluate optimized payroll management tools and discover best practices to integrate them with the rest of their HCM tools. There is a need for information to understand the market requirements of businesses of different sizes as well as across industries. Filling this void is the focus of our upcoming benchmark research on evolving payroll management, which will explore organizations’ payroll management choices and assess their competency and maturity.

Successfully implementing optimized payroll management business initiatives requires an in-depth understanding of the options available and the people, process, information and technology issues that must be addressed. In our unique benchmark research we will analyze all these dimensions of how organizations are currently using their payroll systems and to what extent and in what ways they are complementing or competing with human resources management, talent management and workforce management applications. And it will identify benefits that organizations are realizing from the use of these new tools as well as issues they have encountered.

We will launch this benchmark research project into evolving payroll technology, processes and information management shortly.  As the results become available in coming months, I will be sharing here on my blog some of the most interesting insights the research uncovers on organizations’ priorities, issues and key needs when evaluating payroll management products. I will also be assessing providers’ offerings to see how they are maturing and how well they are meeting the needs of a broad range of organizations of differing sizes and in specific industries. Be sure to keep a eye on this space in the coming months to see some of what our research uncovers as payroll is a key component of my research agenda for 2013!


Stephan Millard

VP & Research Director

Enghouse Interactive Advances Multichannel Customer Interactions

I recently wrote how Enghouse Interactive is building a portfolio of products to support contact center in the cloud. The foundation of all its products is the handling of interactions through a comprehensive set of communication channels. My research into the contact center in the cloud shows that after the adoption of CRM in the cloud, companies are most likely to adopt contact centers in the cloud because they support consumers that want to interact through more channels, and because of the increasing need to support distributed contact centers and the diverse location of employees handling interactions.

The most recent release of Enghouse Interactive products to support the enterprise is now available through a variety of channels: on-premises, through a private cloud, through a public cloud, or customers can mix and match by having some systems on-premises and others off. The public cloud leverages Amazon’s Elastic Compute Cloud infrastructure as a service, which removes the need for companies to purchase any on-premises infrastructure. Moving to the cloud in this way also reduces up-front costs and time to deploy, and reduces the need for skilled deployment and operations staff. The service can be scaled up or down to meet fluctuating business requirements.

Along with these deployment options, Enghouse Interactive also recently announced a new agent desktop, iAgent. The first release of this product addresses a critical issue for contact center managers. My research into the agent desktop shows that agents are now expected to handle interactions arriving through multiple channels and the vr_db_top_five_customer_service_challengessilos is the top customer service challenge. They therefore need systems on their desktops that let them view and the handle different types of interactions, which makes the agent desktop cluttered and difficult to use. iAgent addresses this in a quite novel way, which, having seen a demonstration, I think will appeal to agents. The most striking feature is what Enghouse Interactive calls the shelf, which look just like a shelf and displays icons that represent the different channels an agent is able to support: phone, email, text, social media, and so forth. By clicking on an icon an agent can immediately see the interactions available in the queue for that channel. By clicking on an interaction the agent can handle that interaction. To assist with handling the interaction, the agent is also presented with key information about the customer and previous interactions, and companies can build preprepared templates to assist in creating the response. Once the interaction is closed, the agent can move on to an interaction in the same or an alternative queue. The system can also be configured to interrupt agents with inbound calls that need to be handled, allow them to complete the call, then go back to the interaction they were handling.

iAgent is a thin-client web application that can be accessed by anyone handling interactions on a device  and browser of their choice. It is easy to set up and maintain, with all users automatically gaining the benefit of new features. It is digitally signed so companies are assured of the security, origin and integrity of the software.

My practical experience when building contact centers and my research into their use show that in many organizations the agent desktop can only be described as a mess. It contains several business applications, systems to access communication channels, message boards and various performance dashboards. This makes agents’ lives frustrating and inefficient, leading to less than optimal customer experiences. As the number of channels grows, the desktop only gets worse. iAgent addresses this critical part of handling interactions, and Enghouse Interactions has plans to make accessing applications even easier. It is therefore a product I recommend companies evaluate as they look to improve agent performance and the customer experience.


Richard J. Snow

VP & Research Director