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Case Study: Payroll Nirvana

A client of Cognet HRO recently sat down with us in our Quarterly Governance Meeting, included as part of our ISO process, and shared with us why saving less money on their end was the right decision for their business.  We would like to share that experience with you to improve understanding of the use of a global business model, and that there are two sides to the math and decision making process.

“We had already moved several business processes to Cognet HRO when personnel changes in our payroll production area made us consider a move.” said the Chief Executive Officer.  “It was obvious to us that it is a transactional process, but our perception had been that it was far too critical to not have it “in house” for control purposes.  We learned they had years of experience in production of U.S. payroll on several popular HRIS systems, so we engaged them to scope the project and possible transition.”

The initial Statement of Work planned for the documentation, training, parallel testing and entry into production over a few months.  “The shocking part was that their (Cognet) recommendation was not something we had considered for the same reasons.  We did want to keep some staff for their years of payroll experience, and in case of emergency.  However, we didn’t consider the middle ground of having them focus solely on customer service, while being a critical part of capacity planning.”

There were 16 processors in the payroll operation at a fully loaded (labor and overhead) cost of $72,500 per employee.  The suggestion was that once full production was agreed upon, only a portion of the positions would be eliminated in the U.S.  The cost and time zone differentials would allow the retention of the “best and brightest”, get them moved into our customer service organization and still have the capacity if required from the team as a whole.

“It was a “win win” for both teams that surprised us all.  The transition of payroll talent into customer service representatives didn’t go smoothly for all, but in the end we retained our most dynamic team members who are now focused on customer retention.  We also have that capacity when we need it, but as we grow we find that we do so offshore at a known and considerably lower price point.” said the CEO.

There is usually a middle ground to global delivery.  The right partner with specific experience can make the difference, and make suggestions that allow not only cost savings, but also revenue growth.  Sure, you can save as much as you wish if that is your only objective, but the gains available in your company can come to fruition in several formats.  Instead of saving $1 million you may find that you save $0.5 million, gain capacity and also retain $2 million that you may have lost without the focus.

There are many ways to skin a Tiger, but please let the experts help you with that engagement.

 

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