WAM-Pro Case Study Submission (Time & Labor System Upgrade)

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Sharing my official case study submitted to the Association for Workforce Asset Management for certification. This study demonstrates how I, as a WAM-Pro, approached the project management of a Time & Labor system upgrade utilizing skills acquired through official Workforce Asset Management training and provides details on outcomes, obstacles, and team dynamics. WAM-Pros posses cross-disciplinary skills in labor management, statutory compliance, and project management to strategically align workforce management projects with an organization's business goals, mitigate risk and provide best practices for optimizing labor and reducing payroll leakage. For more information on the WAM-Pro® Certification Program, please visit awampro.com. ** All opinions or commentary contained within this post or case study are solely my own and not endorsed by my employer(s) past and present.
Transcript
  • 1. WAM-Pro® Case Study Submission AWAM LLC © 2015 1 Time and Labor System Upgrade 1.0 Problem or Opportunity Statement Brief statement about the workforce asset management related problem(s), issue(s) or opportunity(ies)that inspired or required the project or effort. Decentralization; home-grown, standalone technology and the lack of proactive analytics brought significant labor spend overages, high compliance risks and overburdened back office processes impeding scalability for growth of the organization as well as creating disengagement and dissatisfaction of operations, administrators, Executive leaders and Ownership. 2.0 Project Background and Context Context on the organization and the problem. How important was the problem to the organization? What was the organization’s ability to handle change? What levels of leadership were deeply invested? Was there support of a Workforce Management Office? Why was the WAM-Pro asked to participate in the project? What resources were allotted? How was the case made for this project? In my short tenure, I noticed that sudden rapid growth had unveiled the potential for high risk and the lack of scalability in the current timekeeping system. I approached Executive leadership and explained that the decentralized, home-grown approach had many risks associated with state and federal regulatory compliance and was causing the Payroll Department to spend an inordinate amount of time collecting and processing required items and pushing dangerously close to deadlines for timely payroll delivery. There was definite concern on the Executive level due to my feedback on how dire the current situation was as well as how it would be relative to ownership’s plan for serious growth upwards, of 25-30% annually, over the next 3-5 years. The organization’s ability to handle a change of this magnitude was uncertain due to the established company culture, a lack of project management and other professionals that had experience in large implementations as well as competing and overlapping priorities. With no Workforce Management Office, and as the leader over all Workforce Management Systems having had experience in many full- scale implementations in previous jobs, I was tasked with orchestrating and managing this project from inception to completion.
  • 2. WAM-Pro® Case Study Submission AWAM LLC © 2015 2 Executive leadership in Finance was fully invested in the need of moving forward due to pressures from ownership on labor spend and the potential for increased risk. However, although their current processes were very arduous and overly time-consuming, Finance was reluctant to get onboard because the change would create a complete overhaul that would also be time-consuming and add to their already overly full plate. Executive Operational leadership knew that the current processes were inefficient and creating a great struggle for all areas, but were doubtful of the overhaul making a great impact and improving the process. It was the vision of some to throw headcount at the problem, but this would not be sustainable and would be overly costly in the long run. 3.0 Requirements The business and functional requirements to make this project a success. ● Decrease overtime spend o Although budgets were established and provided to operations, there was still a major amount of overtime spend and the current tools were causing management to be reactive instead of proactive. ● Develop actionable reporting and analytics, through the use of real-time information from centralized timekeeping data, for trend analyses, forecasting and decision-making. o A lack of real-time analytics created a reactive approach to managing labor for the current period and the absence of centralized data proved cumbersome for analysts in Payroll and Finance to provide timely and meaningful analysis to the Executive team. ● Use scheduling to manage attendance and provide an avenue for improved labor forecasting
  • 3. WAM-Pro® Case Study Submission AWAM LLC © 2015 3 o The absence of scheduling made it difficult for operations to quickly manage attendance and be better prepared for the future by having the ability to forecast labor spend. ● Increase visibility and transparency for all respective areas of labor management to include Operations, Finance and Payroll o Lack of standardized pay policies and the decentralization of timekeeping processes left gaps in accountability and transparency while additionally creating difficulty in managing shared labor across multiple cost centers and leaving exposure to gaming and favoritism. ● Reduce pay shortages and inaccuracies contributing to risk and time-consuming back office processing. o Frequent pay shortages and inaccuracies, due to limited or poorly functioning labor management tools and processes, created an arduous workload for the small payroll staff with regard to daily off-cycle checks in excess of 100 per day and over 3 hours of off-cycle check reconciliation at the close of the payroll cycle. 4.0 Planned Approach for Execution - People Initial assessment of the stakeholders and project team including roles that were included and excluded from the project and why. An accounting of group dynamic and challenges expected to navigate. Stakeholders consisted of Payroll / HRIS, Operations, Finance and Information Technology. The Executive suite decided which TLM solution would be implemented. Cost was the primary driver of the decision because some leaders did not buy into the philosophy of conducting a formal functional analysis or total cost of ownership study as a proof point to determine actual functionality and resources needed to accommodate complicated labor distribution, planned aggressive growth and organizational structure changes that laid ahead. With no business case and analysis to go on, ROI would only be based on reduction of overtime due to proactive tools being in place. Gained efficiencies and cost of risk could not be measured to increase ROI and justify the expense of a more robust TLM system.
  • 4. WAM-Pro® Case Study Submission AWAM LLC © 2015 4 As project leader, I assigned Payroll / HRIS as the Center of Excellence, due to the level of subject matter expertise across the department, and coordinated with other stakeholders to gather requirements and concerns, provide direction for different stages of implementation and testing, and coordinated deployment and training. I.T. would manage time clock configuration / distribution and work with the remote locations to set up appropriate electrical and data drops. Finance and Operations would participate in testing and training. Since the deployment was to be rolled out in waves over a 12 month period, the complication of managing two different systems and methods of reporting proved to be arduous and hectic, as expected. Despite attempts to quell concerns and provide damage control for decisions made from the Executive level, there was a tense dynamic between Payroll / HRIS and Finance. Finance had not bought into the need for moving away from their old process because they were focused on how it would impact their work levels and held the opinion that Payroll had somehow made the decision and this change was only catering to our needs. Parts of the project would suffer due to this dynamic and navigating the dialogue and delegating duties became tedious. 5.0 Planned Approach for Execution – Systems & Technologies Listing of systems, technologies, or features engaged for this project and why they were specifically chosen. Vendor Confidential (Time & Labor Management System) Replacing legacy TLM system Labor Standards Labor standards was chosen to be a real-time replacement to the “Daily Man Hours Report” that was provided mid- afternoon for yesterday’s labor details, allowing only for a reactive approach to managing the growing overtime problem. Pay to Schedule Pay to schedule was new functionality chosen for certain job sites to allow for exceptions to schedules to be entered instead of regular punches since job functions were scattered all over the hospital and it was not cost-
  • 5. WAM-Pro® Case Study Submission AWAM LLC © 2015 5 efficient to have clocks at all job locations within the site. Global Paycode Updates New functionality to allow for automatic holiday pay to be appended to a timecard if certain criteria were met. This had been an ongoing problem because it was done manually, at the job site level, for over 4,000 employees in total. This process was laden with errors and always caused overages and shortages in employee pay. SalesForce© CRM SalesForce would serve as a central repository for all time data from New System to be used for historical reporting and daily analytics. A custom export to our sftp site was created by the vendor and set up on a schedule to provide updates twice a day. 6.0 Planned Approach for Execution – Policies & Procedures An account of efforts to ensure that the technology was supported in practice by policy and process. Flowcharts Created flowcharts to provide guidance on managing employee data changes depending on which system a job site was using until all migrations had taken place.
  • 6. WAM-Pro® Case Study Submission AWAM LLC © 2015 6
  • 7. WAM-Pro® Case Study Submission AWAM LLC © 2015 7 Pay Policies I had uncovered many job sites using shift differential and premiums inappropriately because they had the ability to apply manually without any supporting documentation and no formal shift differential or premium policy in place. I made my recommendations to the CFO and with his and Operations senior leadership’s help, shift differentials and premiums were standardized to ensure best practices were being maintained.
  • 8. WAM-Pro® Case Study Submission AWAM LLC © 2015 8 I was able to use the new technology to input shift differential and premium thresholds and minimum requirements what would apply automatically to prevent manual application; thus, mitigating favoritism and other misuse of these pay codes. Initially there was considerable pushback from field operations managers who were using these premiums pay codes for a myriad of improper applications such as calculating mileage reimbursements, favoritism and unapproved rate upgrades mid period. Sharing this with the CFO and Operations senior leadership paved the way for reform in these areas on a cultural level. 7.0 Progress Documentation and Success Metrics How the project was documented and the approach for measuring its success. Overtime data was exported from the payroll system each month and graphed to show trending of overtime spend for migrated job sites. The KPI for overtime was set at 2% or less of total labor spend. This was the threshold for measuring success of the new labor management tools. The analytics contained data from the prior year’s processing as well, showing total overtime percentage by month, percent change year over year and month over month, and for specific times of year such as holidays when overtime tended to be more prevalent due to having more employees off for vacation and personal time. This information was provided monthly to the CFO for review and feedback. It was also discussed during the P&L Review process each month with each Vice President for his or her respective region. I was able to provide information to the CFO, based on my recommendations to standardize and automate shift and premium pay codes and provide real-time analytics to operational managers, showing an eventual reduction in labor spend in problem job sites. Phase two would address the use of scheduling features to mitigate gaming and provide predictive analytics.
  • 9. WAM-Pro® Case Study Submission AWAM LLC © 2015 9 8.0 Project Execution Listing of the various phases of the project. Step 1: Communication ● Activities: o Make formal announcement to field operations and corporate headquarters o Provide FAQs o Schedule periodic progress calls & demo webinars ● The phase was the beginning of change management messaging to advise affected areas of purpose and timeline. Step 2: System Build Out & Pilot Site Selection ● Activities: o Creating Labor standards criteria and thresholds o Creating pay codes, shift differentials & premiums o Orchestrating Employee Master File data flow o Defining custom fields o Run test scenarios o Select pilot job sites o Collaborate with IT to design roll out plan ● This phase set the foundation for the rest of the project by creating the steps necessary for successfully migrating job sites from the legacy system. Without these items clearly defined and executed, thousands of employees could suffer inaccurate pay which would lead to dissatisfaction, a lack of confidence in the corporate office and the high risk of penalties and litigation. Step 3: Hardware Deployment and Software Configuration ● Activities:
  • 10. WAM-Pro® Case Study Submission AWAM LLC © 2015 10 o Coordinate with job sites to install data & electrical drops for time clocks o Time clock configuration, distribution and testing o Time card assignment and distribution o Loading of budgets and labor standard criteria ● This phase was put in place to prepare hardware/software for pilot job sites in anticipation of their go-live dates. This would also serve as the go-forward plan for rolling on other waves of job sites until project completion. Step 4: Training ● Activities: o Conduct training for field operations pilot sites, IT, Finance & Payroll ● This phase set the standards and expectations of each role for project and production requirements / goals. Step 5: Preparing for new reporting and analytics ● Activities: o Create database, using SalesForce, to house legacy and New System data for ease of compiling labor analytics, compliance reporting and audits o Create payroll audits to catch anomalies while managing two systems to ensure no lost or duplicate time. ● This phase was established to ensure we had reporting available after the first payroll run following go-live and saved us from having to run reports from each system and then compile them in a series of spreadsheets. Step 6: Go-Live for Pilot and Future Job Sites ● Activities:
  • 11. WAM-Pro® Case Study Submission AWAM LLC © 2015 11 o Run clock connectivity testing o Have job site management validate roster from payroll o Dedicate payroll resources for first few payrolls o Run parallel payroll in both systems for very first payroll to compare outcomes and make any last minute changes. (this only applies to job sites migrating from legacy to New System) ● This phase set the standard process for bringing on the remainder of job site waves as well as new job sites as we grow. 9.0 Results An account of actual results or outcomes of the project. Reduction in overtime was successful, in job sites that had major issues, due to providing daily real-time variance reports of budgeted hours and dollars at the fingertips of each operational manager. Instead of having to react to overtime that had already been spent the prior day, a manager could now look at their labor spend as they went through the day and send employees home early if needed, etc. Additionally, since we were using a unified system, vice presidents could log in and run reports for themselves and better communicate with their job sites to ensure operational management was staying on top of labor management on a daily basis. Unification of data and real-time analytics also allowed operators to run reports to show missing punches that needed resolving to ensure labor reporting was accurate. Payroll would also use this function throughout the pay period to ensure there were no missing punches across the organization and provide counseling to operators and their vice presidents when missing punches were not resolved within 24 hours. Payroll would also run this report prior to processing payroll to ensure all time was accounted for. Initially there were some issues with using the global paycode update because operations did not have holiday pay policies in place for different locations. As it turned out there were different rules depending on which job site an employee worked. Job sites that had hand-shake agreements with the local hospital administration on holiday pay rules had always applied holiday manually and corporate was unaware of the guidelines on holiday pay. Once this was brought to our attention we had to work with
  • 12. WAM-Pro® Case Study Submission AWAM LLC © 2015 12 divisional vice presidents to get something official in writing and redesign the global paycode engine for the needed exceptions. 10.0 Sustainability An account of whether the results were sustainable and why. Results were definitely sustainable because it brought transparency and proactive approach to managing labor. With this new capability, senior leadership would not be willing to revert to the previous methods and were onboard to help change the culture with regard to labor management practices. Now they had access to what was going on in real-time, what trends were transpiring and which operators were falling short that may have been using excuses that were hard to prove prior. Going forward, any new pay rules or special negotiations with customer requests that would impact labor management could no longer be inputted locally and unchecked. A discussion with the CFO, Operations Leadership, HR & Payroll would have to take place to discuss statutory compliance, value for effort and scope. This would allow the system to enforce thresholds and Payroll and Auditors to keep a watchful eye on any potential abuse caused by work-arounds. 11.0 Reflections An account of what led to success and turning points that caused undesirable effects. What unforeseen obstacles arose and how the WAM-Pro will prepare for those next time? Centralization and unification of timekeeping data provided much needed transparency and access to actionable analytics that had not been possible with the home-grown, standalone legacy system. Previously, it was challenging to determine why productive wages were consistently missing the mark on budget. Additionally, auditing was difficult and a myriad of compliance issues coupled with rapid growth were contributing to very high risk and a dissatisfied, vocal and potentially litigious workforce. We had conducted a thorough analysis of shift differentials and premiums across the organization, to standardize where possible, and
  • 13. WAM-Pro® Case Study Submission AWAM LLC © 2015 13 ensure system capabilities were present for such rules. However, Holiday pay rules were not discussed prior to mapping out the process and it was assumed that holiday pay rules would be the same across the board based on generic language in our handbook. Unforeseen, by the corporate project group, were these hand-shake agreements with our customers at the job site level on how holiday pay would be handled. Nothing was written into their contracts which created confusion and high risk for discrimination. We conducted a review of our process for entering into new business relationships with future clients and how we could create more standardization to limit errant exceptions that were not scalable. However, the organization was split on whether or not to review pay rules and guidelines requested of the customer prior to agreeing verbally or in writing. Many wanted to continue with the hand-shake culture to give them the freedom to build great relationships with the customer. The culture had supported this way of doing business for over 30 years. It may have functioned well enough when the company was small, but it was challenging to convey to this audience that too much autonomy and decentralization leads to deliberate abuse which brings about high risk and dissatisfaction throughout the workforce. It would ha
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