The Payroll Operations Survey summary of results

Transcription

1 The Payroll Operations Survey summary results December 2014

2 Deloitte LLP is pleased to present the summary the results from the 2014 Payroll Operations Survey. As the second survey its type conducted by Deloitte, this year s survey continued to evolve the questions associated with U.S., Canadian, and Global organizations in the following areas: Payroll operations Technology Workforce management Outsourcing Compliance and taxation Quality and continuous improvement The survey was completed by experienced pressionals in a wide range industries who are directly involved with the function at their respective organizations. Fifty-eight companies participated in the survey representing both global and domestic organizations. The companies ranged in size from fewer than 200 active employees to over 300,000. The approach taken with the survey was to dive deeper into the systems and service delivery models within each the global regions: North America (NA), Asia and Pacific (APAC), Europe, Middle East, and Africa (EMEA), and Latin America (LA), providing insights into the similarities and differences among them. One the observations included the fact that some global organizations do not have full transparency into their global operations. Many the results were analyzed by the number employees within an organization, which revealed several trends associated with shared service centers, outsourcing, and technology. Some the findings and trends identified from the survey responses include: The majority organizations centralized into a shared service center located in North America 90% organizations utilize online self-service There is growing interest in cloud-based applications, but global solutions are limited at this time Time and attendance systems are the prevalent workforce management technology with 8 the respondents utilizing 7 organizations have fully documented pay policies, but 6 feel that they are beginning or still developing their workforce management strategy Full outsourcing is more common outside North America; however, satisfaction with the outsourcing arrangement is higher in North America Organizations with business travelers continue to be challenged to track and manage mobility for U.S. state and global taxation reporting Payroll departments are utilizing a variety tools and techniques to monitor internal and outsource vendor service quality We hope you find the results this year s survey useful. If you have any questions regarding the survey or specific operations or tax challenges, please do not hesitate to contact the and employment tax specialists listed at the end the report, or me directly. With best regards, Beth Shanton Director Human Capital HR Transformation Deloitte Consulting LLP Tel: bshanton@deloitte.com As used in this document, Deloitte means Deloitte LLP and its subsidiaries. Please see about for a detailed description the legal structure Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations public accounting. The Payroll Operations Survey summary results 1

3 Survey highlights Section 1: Company demographics Payroll generally reports to Finance in organizations with less than 10,000 employees and to HR or Shared Services in organizations with over 10,000 employees Section 2: Payroll operations respondents have a Payroll Shared Service Center with 91% having one located in North America respondents manage responsibility for global processing regionally while 2 manage by country 8 employees are paid via direct deposit, 6% receive live checks, and 5% receive pay cards Section 3: Technology In North America, PeopleSt, SAP, ADP, and Ceridian are the most common solutions in use respondents are considering cloud-based technology to support functions, while 1 are already using cloud-based services Section 4: Workforce management Time and attendance, labor scheduling, and budgeting are the most common systems in place as part a workforce management strategy 75% respondents feel their organization s work and pay policies/procedures are fully documented 6 respondents are beginning or still developing their strategy for workforce management Section 5: Outsourcing North America continues to outpace other global regions in terms scope services outsourced Organizations that outsource services outside North America tend to be less satisfied with their current outsourcing arrangement The majority respondents are not considering changing their scope or services or geographic scope service outsourcing Section 6: Compliance and taxation respondents utilize travel and expense data to track U.S. domestic business travelers, but do not track or were not sure how or if they track their U.S. domestic travelers respondents utilize travel and expense data to track global short-term business travelers, but 4 do not track or were not sure how if they track their international travelers Year-end processing, defining withholding responsibilities, and reporting income locally were the greatest challenges or risks facing organizations with a mobile global workforce respondents outsource tax reporting to help mitigate the risks associated with global mobility processing Section 7: Quality and continuous improvement 6 respondents reported having governance policies covering the Payroll function 81% respondents conduct periodic reviews their process 8 respondents have Service Level Agreements (SLAs) established and track and monitor them Throughout the report, the following abbreviations are used for the four global regions: APAC: Asia and Pacific EMEA: Europe, Middle East, and Africa LA: Latin America NA: North America The Payroll Operations Survey summary results 2

4 Section 1: Company demographics What is your company s primary industry? Consumer and industrial products Financial services Government and public sector 5% Life science and healthcare Manufacturing Retail What is your company s primary industry? Technology, media, and telecommunications Consumer and industrial products Energy and resources Financial services How many active employees are on Government your? and public sector Life science and 5% Energy and resources > 100k healthcare Financial services Manufacturing Retail This year s Government and survey captured responses from public a wide sector variety organizations spanning eight different industries, ranging Technology, media, and in employee size from a few hundred to several hundred-thousand. This section sets the foundation Life science and for telecommunications the types 5% organizations that participated and how they healthcare are structured and staffed. Manufacturing < 1k 2 Retail 0% 5% 15% What is your company s primary industry? Technology, media, and How many active employees are on your? telecommunications Consumer and industrial products Average > 100knumber Full Time Employees (FTEs) Energy and resources responsible for running any part the cycle How many active employees are on Financial your? services Government and public sector Less > 100k than 1k 46 > 100k Life science and 5% 38 healthcare < 1k 19 2 Manufacturing 12 Retail 0% 5% 11 15% Technology, media, and 5 telecommunications Respondents < 1k with 2 U.S. operations reported employees in < 1k 2 Average an average number 29 U.S. Full states Time Employees and territories. (FTEs) Those with More than 0 100k responsible Canadian operations for running reported any part employees the in an average cycle 0% 5% 15% Average number FTEs 5.7 provinces and territories. How many active employees are on your? > 100k 46 Less than 1k Average number Full Time Employees (FTEs) Average number active employees supported 38 > 100k responsible for running any part the cycle by each FTE supporting the 19 cycle 12 Less than 1k 11 > 100k 46 > 100k 5 4, < 1k 2 1, ,682 < 1k , More than 100k 11 Average number FTEs 0% 5% 15% < 1k 2 < 1k 229 More than 100k Average number active employees supported Average number 0 Full 10Time Employees 20 30(FTEs) ,000 2,000 3,000 4,000 by each FTE supporting the cycle responsible for running any Average part number the FTEs cycle Average number employees per FTE 5,000 The average ratio the number FTEs responsible for processing > Less 100k than 1k to the number employees supported 4,846 > 100k 46 within Average the number organization active is directly employees correlated supported with the company size: the larger the organization, 1,868 the greater the 38 number by each FTE active supporting employees the that are cycle supported by each FTE. 1, , Smaller organizations tended 11 to have a lower ratio due to the requirement for a minimum number FTEs to support > 100k 4, the Payroll function. 5 1,868 < 1k 229 < 1k 2 1,682 In contrast, larger organizations had much higher ratios implying a degree More than 0 scale 100k 1,000 and efficiency 2,000 achieved. 1,140 3,000 4,000 5, Average number employees per FTE Average number FTEs 512 The Payroll Operations Survey summary results 3 < 1k 229 Le 1k 5k M Less 1k-4 5k-9 10k-1 Le 20k- 1k 50k- 5k More M Less 1k-4 5k-9 10k-1 20k- 50k- More

5 4 3 Where does Payroll report in your organization? Where does Payroll report in your organization? 80% 3 Where does Payroll Where report does Where in Payroll your does organization? report Payroll in report your in organization? your organization? 4 80% 2011 responses 2014 responses < 1k responses 2011 responses 2011 responses 2014 responses 2014 responses 2014 responses Number employees < 1k 1 1 HR 4 Where does Finance Payroll report by company size? 4 Shared services 3 > 100k Combination/varies within the organization % responses Where does Payroll report by company size? > 100k 56% < 1k 6 Where does Payroll report by company size? Where does Payroll Where report does Where by Payroll company does report Payroll size? by report company by company size? size? > 100k > 100k > 100k > 100k 56% 2 2 HR 56% 56% 2 56% Finance 5 2 Shared services 5 80% 5 5 Combination/varies 80% 80% 2 80% within the organization 6 80% 80% 80% < 1k 0% < 1k 6 < 1k 6 80% 6 100% 5 80% 80% 0% 0% 80% 100% 80% 80% 100% 100% responses Compared to 2011, respondents in 2014 HRreported an shift away from Payroll reporting to Finance. HR Finance HR HR This does not necessarily indicate a trend Finance Shared in reporting services hierarchy, Finance Finance but rather an indication the size and types organizations responding to this year s survey. Shared Combination/varies services Shared services Shared services within the organization Combination/varies Combination/varies Combination/varies Organizations with fewer than 10,000 employees within the organization tended within to have the within organization Payroll the organization report to Finance. Organizations with more than 10,000 employees showed a greater emergence Payroll being part a shared services model, reporting to HR, or a combination. 2 The Payroll Operations Survey summary results 4

6 Section 2: Payroll operations 70% 6 30% 0% Which global U.S. regions NA LA is your EMEA APAC only organization responsible? 80% Average 70% number countries supported 6 in each global region Which global regions is your organization responsible? APAC 30% 5 80% Payroll 70% EMEA 9 continues to evolve to provide services to its customers with more efficiency and less cost by centralizing Payroll, 6 forming or joining existing shared service centers, fering online self-service functionality, and increasing the use LA 0% 3 electronic payment methods to employees. U.S. NA LA EMEA APAC only NA 2 30% Which global regions is your Average 0 number 2 countries 4 supported organization responsible? in each global region 0% 80% U.S. NA LA EMEA APAC Does your organization have a only 70% shared service center? 6 APAC 5 Average number countries supported EMEA 9 in each global region 30% LA 3 NA 2 Yes APAC 5 No 0% U.S. NA LA EMEA APAC EMEA 9 only LA 3 Does your organization have a Respondents in the manufacturing industry were the most regionally diverse with a presence in an average nearly 3 Average NA number 2 countries supported shared service center? global regions. Consumer and industrial products and life sciences and healthcare were the least regionally diverse with in each global region fewer than respondents operating outside North America APAC 5 Does your organization have a EMEA shared service center? 9 Which regions do you have shared service centers? Yes LA NA 2 3 NA No 91% Yes No Does your organization have a shared service center? LA EMEA APAC Which regions do you have shared service centers? Which regions do you have shared service centers? NA LA Yes No 91% The average respondent had shared service centers in approximately 1.5 global regions. NA 91% Most LA organizations have centralized their shared service centers into a single location or may have additional locations EMEA in different global regions to service that area or allow 24-hour, follow the sun, coverage and support. APAC The Payroll Operations Survey summary results 5

7 Locations Locations shared service shared centers service by centers company by size company size No shared service centers 6 2 Payroll shared service centers only in NA > 100k > 100k 75% 75% Payroll shared service centers only outside NA Locations shared service centers by company size Payroll shared service centers in both NA and other global regions Locations > 100k shared 75% service centers by company size < 1k 7 Number global regions with shared service centers > 100k 75% 6 2 > 100k 75% < 1k < 1k 7 7 No shared service centers 6 2 0% 80% 100% 80% 100% Payroll shared service centers only in NA 6 2 Payroll shared service centers only outside NA 6 < 1k 7 No shared No service shared centers service centers Payroll shared service centers in both NA 0% 80% 100% and other global regions Payroll shared Payroll service shared centers service only in centers NA only in NA < 1k 7 Payroll shared Payroll service shared centers service only outside centers only NA outside NA 0% 80% Number 100% < 1k 7 No shared service centers global regions with shared service centers Payroll shared Payroll service shared centers service in both centers NA in both NA and other global and Payroll other regions shared global service regions centers only in NA Payroll No shared shared service service centers centers only outside NA > 100k 75% Number global regions with shared only in service centers Number global regions Payroll with shared service shared centers service in both centers NA 0 Having a single shared service center was and other global regions Payroll shared service centers only outside NA 6 most Does common your 2 organization at nearly all have company plans 1sizes. to Companies > 100k > 100k 75% Payroll shared 75% service centers in both NA 6 with develop fewer a global than 10,000 employees strategy? were 2 much less and other global regions Number global regions with shared service centers 0 0 likely to have a shared service 3center. The largest respondents, with 20,000 or more employees, 4 showed Number > 100k global regions 75% with shared service centers 6 < 1k 2 2 the emergence having shared service centers in all four global regions. 0% % 100% > 100k 75% No, no plans < 1k < 1k No, one 0% 80% 100% 80% 100% 6 Does your organization have 42 plans to already exists develop a global strategy? Yes 3 < 1k 7 3 0% 80% 100% 4 Does your Does organization your organization have plans have to plans to < 1k 7 develop a develop global a global strategy? strategy? Does your organization have plans to Not How sure do you manage responsibility for develop a global strategy? No, global no plans processing? Does your organization have plans to No, one already exists develop a global strategy? Yes No, no plansno, no plans 3 Not centralized No, one No, one the respondents already existsalready exists Centralized in U.S. indicated that they have Yes Yes No, no plans 2 Individual country no plans to develop a 3 3 No, Not one sure global strategy; Regionally already exists No, no planshow do yet, you they manage have responsibility for Centralized in Yes global processing? another non-u.s. No, one operations in more than country 3 already exists one global region. 2 Yes How do you How manage do you responsibility manage responsibility for for 3 global global processing? processing? Not centralized How do you manage responsibility for Centralized in U.S. global processing? 2 Individual country The Payroll Operations Survey summary results 6 How do you manage responsibility Not centralized for Not centralized Regionally Number Number employees employees Number Number employees employees < 1k 7 Locations shared service centers by company size > 100k 75% > 100k 75% 6 2

8 Which employee self-service transactions do you fer online? View online pay statements 8 View annual tax documents Update home address Update personal and emergency contact info Update employee tax info Update banking details Time reporting Request time f Elect/update voluntary deductions Payment modeling/simulation 2 View garnishment details 90% respondents fer some type online self-service functionality. 8 the respondents that do not fer online self-service have fewer than 1,000 employees. Average percentage employees paid using the following payment methods Average percentage employees paid using the following payment methods Method2011 responses responses 2014 Direct deposit 1% 8 1% 8 Live checks 5% 6% 6% Pay cards 1% 5% payment methods N/A 1% Direct deposit was still the dominant method for paying employees. Its usage has remained virtually unchanged compared to the 2011 survey s results. 8 8 Live checks saw a small decrease; however, they will continue to be utilized by many organizations until direct deposit or other electronic payment methods are permitted to be mandatory in all geographies. Direct deposit Pay cards showed a modest increase in popularity as an alternative to checks, although they were most prevalent Live checks in manufacturing and retail industries. Pay cards The Payroll Operations Survey summary results 7

9 Which types f-cycle and special processing does your organization perform? Payroll process cycle type Percent respondents processing cycle type Average number pay cycles per month Average number payments created per pay cycle Scheduled f-cycles Unscheduled f-cycles Special-purpose f-cycles ,699 Retiree pension payments N/A 2,305 Scheduled f-cycles are those which the Payroll department plans in advance and are used to process missed payments and perform corrections. Nearly one-third respondents schedule their f-cycle s and on average process one cycle each business day the month. Unscheduled f-cycles serve the same purpose as scheduled f-cycle s, but are run on an as needed basis. Companies that outsource gross-to-net will typically rely on unscheduled f-cycles to perform corrections since each run the engine will carry a cost. Companies that run in-house are more likely to schedule their f-cycles since the additional runs will usually not have a direct impact on the variable cost. Special-purpose f-cycles are usually scheduled or at least planned in advance, but are used to perform mass adjustments and payments, such as quarterly incentive payments, company-wide bonus payments, and year-end imputed income adjustments. As a result, the average number cycles per month is comparatively lower at five, but the average number payments created is much higher exceeding 12,000. Retiree pension payments are only processed by respondents Payroll departments. Typically these are processed monthly. The Payroll Operations Survey summary results 8

10 Section 3: Technology How is your maintained in each region? How is your maintained in each region? NA NA 35% 35% 35% 35% The survey responses confirm that Payroll departments are LAshifting toward cloud-based solutions, also known as Stware LA as a Service (SaaS); however, this is primarily focused on the North American markets. Enterprise resource planning (ERP) solutions continue to be prevalent in North America, especially APAC in organizations greater than 20,000 employees. 3 APAC 3 EMEA 1 How is your maintained in each region? EMEA 1 6% 6% 3 3 How is your maintained in each region? NA 35% 35% Fully outsourced (hosted and maintained by 3rd party) Fully outsourced (hosted and maintained by 3rd party) NA 35% 35% Hosted by a 3rd party and maintained in-house LA Hosted by a 3rd party and maintained in-house Hosted and maintained in-house Hosted and maintained in-house LA APAC 3 APAC EMEA 1 6% 3 3 How is your system maintained in North America by company size? EMEA 1 6% 3 How is your system maintained in North America by company size? 0% Fully outsourced (hosted and maintained 80% by 100% 3rd party) > 100k 75% In North America, 70% respondents maintain their Payroll > 100k function in-house and 56% 75% outsource their Hosted by a 3rd party and maintained in-house 75% technology hosting, Fully maintenance, outsourced (hosted and and support. maintained by 3rd party) 75% Hosted and maintained in-house Hosted by a 3rd party and maintained in-house Combining the other global regions, on average maintain their Payroll 36% function in-house 2 and on average 36% outsource Hosted and maintained in-house 36% 2 36% the technology. It Not should sure be noted that on average 4 respondents did not know the arrangement for their Payroll function outside North America. 30% 30% How is your system maintained in North America < by 1kcompany size? 4 < 1k 4 How is > 100k your system maintained 75% in North America 0% by company size? 80% 100% Number employees 75% > 100k 75% 75% 36% 2 36% Fully outsourced (hosted and maintained by 3rd party) Fully outsourced (hosted and maintained by 3rd party) Hosted by a 3rd party and maintained in-house 36% 2 36% Hosted by a 3rd party and maintained in-house 30% Hosted and maintained in-house Hosted and maintained in-house or not sure < 1k 4 or not sure 30% < 1k 4 Respondents in North America with fewer than 10,000 employees tend to utilize a outsourcing service, Fully outsourced (hosted and maintained by 3rd party) hosted or fully outsourced. The smaller company size and complexity may allow for a better fit with an outsource provider s Hosted by a 3rd party and maintained in-house standardization Fully expectations. outsourced (hosted and maintained by 3rd party) Hosted and maintained in-house Hosted by a 3rd party and maintained in-house or not sure For respondents Hosted in the and 10,000-20,000 maintained in-house employee range, operating and maintaining Payroll in-house may become a viable cost-effective option. or not sure The largest organizations with over 50,000 employees have the size and staff to support hosting an in-house system. The complexity and company size ten do not present as many options for an outsourced solution. The Payroll Operations Survey summary results 9

11 Payroll technology in use in North America 1 SAP PeopleSt HCM Payroll technology in use in North America JD Edwards Lawson HRMS Workday 5% 1 SAP Ultimate Stware 6% Payroll technology in use in North America PeopleSt Payroll HCM technology Infor Infinium in use in North America JD Edwards ADP solution Lawson HRMS Ceridian solution Workday 1 1 > 100k 5% SAP Ultimate Unspecified Stware SAP Ultimate Stware 6% PeopleSt HCM Infor Infinium PeopleSt HCM Infor Infinium JD Edwards ADP solution JD Edwards ADP solution Lawson HRMS Ceridian solution Lawson HRMS Ceridian solution4 Workday Workday 5% Unspecified 5% > 100k Unspecified 2 6% 6% < 1k Payroll technology solutions varied widely among respondents in North America. Organizations exceeding 20,000 > 100k employees tended to maintain > traditional 100k in-house ERP systems or hosted/cloud-based solutions. Smaller organizations 2 tended to utilize a outsource vendor. < 1k Payroll systems in use in global regions outside North America Ultimate S Infor Infini ADP soluti Ceridian so Unspecifie < 1k < 1k ADP solution Payroll systems 0% in use in global regions outside 80% North 100% America In-house systems Ceridian in solution North America were far 6% more common than those in other global regions, while NGA HR outsourcing or hosted solutions were more common SAP outside North America. in-house solution Outsource providers 5% outside PeopleSt HCM North America varied widely and ten differed by country Unspecified other solution Payroll systems in use in global regions outside Payroll North America systems in use in global regions within outside the same North organization. America ADP solution outsourced or hosted solution 1 Ceridian solution 6% Unspecified outsourced or hosted solution NGA HR solution SAP SAP Pressional services firm in-house PeopleSt solution HCM 5% PeopleSt HCM Solution varies by country/region 1 Unspecified other ADP solution ADP solution 2 0% 5% 15% outsourced or Ceridian hosted solution 6% 1 Ceridian solution 6% SAP PeopleSt HCM Unspecified outsourced or NGA hosted HR solution NGA HR solution Pressional in-house services solution firm 5% in-house solution 5% Solution Unspecified varies by country/region other solution Unspecified 15% other solution 2 2 outsourced or hosted solution 0% 5% outsourced 1 15% or hosted solution 30% Unspecified outsourced or hosted solution Unspecified outsourced or hosted solution 1 Pressional services firm Pressional services firm Solution varies by country/region Solution varies 15% by country/region 15% 0% 5% 15% 0% The 5% Payroll 30% Operations Survey 15% summary results 10 30%

12 Is your organization considering the use SaaS technology to support functions? 3 Yes Is your organization considering the use SaaS technology to support functions? 1 Already using SaaS technology No 3 Yes Already using Is your organization considering the SaaS use technology SaaS technology to support functions? 1 No What is the timeline for implementing SaaS technology? 3 What is the timeline for implementing SaaS technology? 1 Yes Already using SaaS technology No 2 < 6 months 6 months to 1 year 1 to 2 years > 2 years < 6 months 6 months to 1 year What While is the timeline ranks as one for implementing the top SaaS modules being considered by respondents, global functionality is very limited 1 to 2 years SaaS within technology? today s SaaS ferings. Stware vendors are primarily Which fering SaaS North modules American or functionality functionality are being and considered? > 2 years partnering with outsource 2 vendors to provide services in other countries. Core HR It is expected that as interest in the SaaS market continues to grow, stware vendors may expand the countries covered by their solutions. Payroll < 6 months Employee self-service 6 months to 1 year Manager self-service 1 to 2 years Which SaaS modules or functionality are being considered? Benefits administration 2 > 2 years Talent management Core HR Payroll Time and attendance Compensation Employee self-service 5 Recruiting Manager self-service Learning management Leave administration Which Benefits SaaS administration modules or functionality are being considered? Performance management Talent management 7 7 Time and attendance Core HR 0% 7 30% Compensation Payroll 7 Recruiting Employee self-service 5 Learning management Manager self-service Leave administration Benefits administration Performance management Talent management Time and attendance 0% 30% 70% 80% Compensation Recruiting Learning management Leave administration The Payroll Operations Survey summary results 11

13 Section 4: Workforce management What types systems are part your workforce management strategy? Time and attendance 8 What types systems are part your Labor scheduling workforce management strategy? Budgeting Forecasting 1 Time and attendance Productivity 8 Labor scheduling For the first time, the Payroll Operations Survey included questions None concentrating 1 on workforce management systems Budgeting What and their types use. It systems was noted are that part while your 86% respondents are using at 0% least one type technology 80% to support 100% workforce Forecasting 1 workforce management management and 75% have strategy? their pay policies well documented, only 3 respondents have realized a mature or Productivity leading workforce management strategy. A focused strategy that includes integrated systems can improve margins Number workforce None 1 and significantly reduce labor costs. Time and attendance 8 management systems in use Labor scheduling Budgeting 5 5% What types Forecasting systems are 1 part your Number workforce 4 workforce Productivity management strategy? management systems in use 3 1 None 1 2 Time and attendance 8 5 5% 1 Labor scheduling Budgeting 3 1 Number workforce 0% 30% Forecasting 1 2 management systems in use Productivity 1 None % 4 0% 30% 3 1 Types systems that are part the WFM strategy by industry 2Number workforce Survey respondents overwhelmingly noted time and attendance systems as the primary component their workforce management systems in use Consumer and industrial products 1 46% management strategy. Labor scheduling was a distant second followed by budgeting, Energy and resources forecasting and productivity 45% systems These responses suggest 1 that many organizations recognize the value that Types time Financial collection systems services and that labor are scheduling part 4 the systems WFM strategy by indu provide 5 to 5% 0% their workforce management 30% strategy. Government and public sector 4 Life sciences and Consumer healthcare and industrial 3 products % 1 12 On 3 average, respondents 1 reported having two these systems as part their workforce management Energy and resources strategy. Manufacturing 6% 4 45% 6% 2 Retail 5% Financial 3 services Technology, media, and telecommunications Government and public sector 45% Types systems that are part the WFM strategy by industry industry Life sciences and healthcare 100% 3 1 0% 30% 0% Manufacturing 6% 4 80% Consumer and industrial products 1 46% % Retail 5% 3 2 Energy and resources 45% None 2 Technology, media, and telecommunications 45% Financial services 4 Time and attendance industry 100% Government and public sector Labor scheduling0% Life sciences and healthcare Productivity Types systems that are part the WFM strategy by industry None Manufacturing 6% 4 6% 6% Budgeting Time and attendance Consumer and industrial products Retail 5% % % Forecasting Labor scheduling Technology, media, and Energy telecommunications and resources 45% 45% 2 Productivity Financial industry services 4 100% 0% Budgeting Government and public sector 80% 100% Life sciences and healthcare Forecasting None Manufacturing 6% 4 Time and attendance 6% 6% Retail 5% 3 Labor scheduling Technology, media, and telecommunications 45% Productivity industry 100% Budgeting Forecasting None The Payroll Operations Survey summary results 12 Time and attendance

14 5 Work and pay policies/procedures are fully documented by industry Consumer and industrial products 30% Energy and resources Financial services 6 In Government general, and my public organization s sector work and In general, my organization s work and pay Life policies/procedures sciences and healthcare are fully documented. pay policies/procedures are fully documented. Manufacturing 46% 2 Retail 2 56% 2 Technology, media, and telecommunications industry 100% Strongly agree Strongly agree How would you describe your organization s Agree strategy Agree for workforce management? Disagree Disagree Strongly disagree Strongly disagree Government and public sector How Life sciences would and you healthcare describe your 30% organization s strategy How would you describe your organization s strategy 75% for workforce respondents Manufacturing management? agreed or strongly 7 agreed that their 2 for workforce management? organization s work and pay policies/procedures are fully documented, but 6 consider themselves beginning Retail or developing 56% in their workforce management strategy. Only 3 identified themselves as advanced or leading in their strategy. Technology, media, and telecommunications industry 100% 0% Beginning Beginning 80% 100% (fully manual) (fully manual) 2 2 Developing Developing The top two goals implementing a workforce (partially automated) (partially automated) management strategy that were identified by more Advanced Advanced (automated) than respondents were to lower labor costs (automated) Leading (optimized and increase workforce productivity; 0% however, the Leading (optimized 30% 61% with outcomebased analytics) with outcomebased analytics) Many are trying to better understand and utilize the majority respondents are still developing 0% their strategy. 61% 30% data that they are able to receive from their workforce management systems to achieve these goals. Strategy for workforce management by industry Strategy for workforce management by industry Which specific goals or outcomes does your organization want to achieve through its workforce management strategy or approach? Lower and labor costs More productive workforce Higher degree compliance with federal and statutory legislation Proactive benchmarking against competitors, industry standards, or other metrics No specific goal/objectives at this time Consumer and industrial Consumer productsand 80% industrial products 80% Energy and resources 0% 30% Energy and resources Financial services 6 Financial services 6 Government and public sector Government and public sector Life sciences and healthcare 30% Life sciences and healthcare 30% Manufacturing 7 2 Manufacturing 7 2 Reduction in employee labor lawsuits Strongly agree Agree Disagree Strongly disagree 5 5 Beginning (fully manual) 2 Developing Work and pay policies/procedures are fully Work and pay policies/procedures are fully (partially automated) documented by industry documented by industry Advanced (automated) Consumer and industrial Consumer productsand 30% Leading (optimized industrial products 30% Energy and resources 61% with outcomebased analytics) Energy and resources Financial services 6 Financial services 6 Government and public sector Government and public sector Life sciences and healthcare Life sciences and healthcare Manufacturing Strategy for Manufacturing 46% 2 workforce management 46% by industry 2 Retail 2 56% 2 Retail Technology, media, 2 56% 2 and telecommunications Technology, Consumer media, and and telecommunications industrial products 80% industry 100% Energy and resources industry 100% Financial services0% 6 80% 100% 3 35% Work and pay policies/procedures are fully documented Work and pay by industry policies/procedures are fully documented by industry Consumer and industrial products 30% Consumer and Energy industrial and resources products 30% Energy Financial and services resources 6 Government and Financial public sector services 6 Life Government sciences and healthcare public sector Life sciences Manufacturing and healthcare 46% 2 Manufacturing Retail 2 46% 56% 2 2 Technology, media, Retail and telecommunications 2 56% 2 Technology, media, and telecommunications industry 100% industry 0% 100% 80% 100% % 61% Which specific goals or outcomes does your organization want to ach through Which its specific workforce goals management or outcomes does strategy your or organization approach? want to a through its workforce management strategy or approach? Lower and labor costs Lower and labor costs More productive workforce Higher degree More productive compliance workforce with federal and statutory legislation Higher degree compliance with Proactive benchmarking federal and against statutory competitors, legislation industry standards, or other metrics Proactive benchmarking against competitors, No specific industry goal/objectives standards, or at other this time metrics No specific goal/objectives at this time Reduction in employee labor lawsuits Reduction in employee labor lawsuits Strongly disagree How would you describe your organization s strategy for How workforce would management? you describe your organization s strategy for workforce management? Beginning (fully Beginning manual) Developing (fully manual) (partially Developing automated) Advanced (partially automated) (automated) Advanced Leading (automated) (optimized with Leading outcomebased (optimized with analytics) outcomebased analytics) Strategy for workforce management by industry Strategy for workforce management by industry Consumer and industrial products 80% Consumer and Energy industrial and resources products 80% Energy Financial and services resources 6 Government and Financial public sector services 6 Life Government sciences and healthcare public sector 30% Life sciences Manufacturing and healthcare 30% 7 2 Manufacturing Retail 56% 7 2 Technology, media, Retail and telecommunications 56% Technology, media, and telecommunications industry 100% industry 0% 100% 80% 100% The Payroll Operations Survey summary results % 35% 3 3

15 Kronos None ADP Which vendor s system or technology is used to help Infor (Workbrain) enable Kronos None ADP your workforce management strategy or approach? Workforce Stware Infor (Workbrain) Workforce 0% Stware 30% 4 0% 30% Kronos 2 None ADP Infor (Workbrain) Workforce Stware 0% 30% workforce management solutions Which vendor s system or technology is used to help enable your workforce management strategy or approach? Kronos None ADP Infor (Workbrain) Workforce Stware 2 4 workforce management solutions workforce management solutions Point Solution ERP Time and Attendance Point Module Solution 4 Custom solution ERP Time and Attendance Module 4 Outsourcing Custom solution Various solutions Outsourcing Various solutions 0% 30% 4 Point Solution ERP Time and Attendance Module Custom solution Kronos and ADP s workforce management solutions received the most responses Outsourcing for a specified vendor; however, nearly half the respondents reported using a variety other systems. Various solutions Vendor s systems or technology used to help enable workforce management strategy or approach by industry 9 the responses consisted a range in-house and hosted workforce management Vendor s point systems solutions, or technology time and attendance used to help modules enable associated with an ERP system, and custom developed in-house solutions. The remaining 6% either outsourced the function or utilized several different Consumer workforce and management industrial productsstrategy or 2 approach by industry46% solutions within workforce its organization. management solutions Energy and resources Consumer Financial and services industrial products 2 46% Government and public Energy sector and resources Life sciences and healthcare Financial services 3 3 Point Solution Government Manufacturing and public 6% sector 35% 6% 2 2 Vendor s systems ERP Time or and technology used to help enable Life sciences Retail and healthcare 3 3 workforce management Attendance Module strategy or approach by industry Manufacturing 4 Technology, media, and telecommunications 6% 35% 6% 2 2 Custom solution industry Retail Consumer Outsourcing and industrial products 2 Technology, media, 46% and telecommunications 0% 80% 100% Various solutions Energy and resources industry None Financial services 0% 80% Kronos Government and public sector None Workforce Stware Life sciences and healthcare 3 3 Kronos Infor (Workbrain) Manufacturing 6% 35% 6% 2 2 Workforce Stware ADP Retail Infor (Workbrain) Technology, media, and telecommunications system/technology ADP industry system/technology Vendor s systems or technology used to help enable workforce management strategy or approach by industry None Kronos Workforce Stware Consumer and industrial products 2 46% Infor (Workbrain) Energy and resources ADP Financial services system/technology Government and public sector Life sciences and healthcare 3 3 Manufacturing 6% 35% 6% 2 2 The Payroll Operations Survey summary results 14 Retail Technology, media, and telecommunications

16 Section 5: Outsourcing Organizations outsourcing all processing (Payroll BPO) by global region NA 2 Organizations outsourcing all processing (Payroll BPO) by global region LA LA EMEA 4 EMEA 4 APAC APAC 0% Payroll outsourcing continues to be a topic keen interest in many organizations. In the past, outsourcing was usually 30% most appealing to organizations with fewer than 20,000 employees; 0% however, companies 30% all sizes are reconsidering outsourcing all or part their operations as the vendor ferings become more capable to accommodate larger employee volumes and a wider range complex business requirements. NA 2 Organizations outsourcing all processing by industryorganizations outsourcing all processing (Payroll BPO) by global region Manufacturing Retail 5% 5% Life science and NA healthcare 2 Financial services LA Technology, media, and EMEA telecommunications 4 APAC Consumer and industrial products Energy and 15% 0% resources 30% Government and public sector Organizations outsourcing all processing by industry 5% 5% 15% Manufacturing Retail Life science and healthcare Financial services Technology, media, and telecommunications Consumer and industrial products Energy and resources Government and public sector Respondents Organizations with outsourcing operations in all North America utilized a full BPO far less than operations in other global regions. processing by industry The majority organizations using full Manufacturing BPO were in the manufacturing, retail, and life sciences and healthcare industries. 5% 5% Retail Life science and healthcare Financial services Which services do you outsource to an external vendor? Technology, Regardless an organization s operating model, Which nearly all organizations services do outsource you outsource some portion to an external vendor? media, and telecommunications their operations to help reduce cost, manage Time and attendance EMEA Consumer and risk, exposure, skilled staffing concerns, and highly industrial APAC products Time and attendance Payroll self-service administrative/paper-driven tasks. Energy LA and Payroll self-service Gross to net calculation 15% resources NA The Gross most to net commonly calculation Garnishment/tax Government and outsourced functions in North levy administration public sector American Garnishment/tax include: year-end tax form printing (8), Check printing levy administration tax preparation and filing (76%), year-end tax Check printing Check distribution form distribution (6), check printing (5), and Payroll tax preparation garnishment Check distribution administration (5). and filing Payroll tax preparation Year-end tax and filing form printing Year-end tax Year-end tax form printing form distribution Year-end tax form distribution 0% Which services do you outsource to an external vendor? The Payroll Operations Survey summary results 15

17 Garnishment/tax levy administration Payroll services outsourced to an external vendor in North America by company size Check distribution 6% 6% 3 Time and attendance 15% Check printing 1 15% 15% 15% 1 Payroll services outsourced to an external vendor in North America by company size Payroll self-service Gross 1 to net calculation % 1 6% 15% Year-end tax form distribution 1 0% % 100% Time and attendance 15% 15% Year-end tax form printing 2 < 1k Payroll self-service % Payroll tax preparation and filing 6% Year-end tax form distribution Garnishment/tax levy administration Year-end tax form printing 2 Check distribution 6% 6% 3 Payroll tax preparation and filing 6% Check printing 1 15% 15% 1 Garnishment/tax levy administration Gross to net calculation 15% 15% Check distribution 6% 6% 3 Check printing 1 15% 15% 1 > 100k < 1k Gross to net calculation 15% 15% 0% 80% 100% Payroll services outsourced to an external vendor in North America by company size < 1k Organizations with more than 50,000 Time employees and attendance tend to 15% utilize fewer outsourced 15% services due to a greater number Payroll services outsourced to an external vendor outside North America by company size staff, increased economies scale, and Payroll a greater self-service number 1 unique 1 or complex 1 business requirements 1 that hinders 6% making a viable case for outsourcing; Year-end however, many the largest organizations will still utilize Time tax form and distribution attendance outsourcing for the 1 areas that pose > the highest risk or require specialized knowledge and training. 100k Year-end Payroll tax form self-service printing 2 4 Payroll Year-end tax preparation tax form distribution and filing 1 6% Garnishment/tax Year-end levy tax administration > 100k form printing 3 Payroll tax preparation Check distribution 6% 6% 3 and filing 2 2 Garnishment/tax levy Check administration printing 1 15% 15% Payroll services outsourced to an external vendor outside North America by company size Gross Check to net distribution calculation 15% 15% Time and attendance 1 Check printing 3 15% 46% Payroll services outsourced to an external vendor outside North America by company size Payroll self-service Gross to net calculation % 1 < 1k Year-end tax form distribution 0% 1 80% 100% Time and attendance 1 3 Year-end tax form printing 3 Payroll self-service 4 Payroll tax preparation and filing 2 2 Year-end tax form distribution 1 Garnishment/tax levy administration Year-end tax form printing 3 Check distribution Payroll tax preparation and filing 2 2 Check printing 15% 46% > 100k Garnishment/tax levy administration Gross to net calculation 1 35% 1 Check distribution Check printing 15% 46% Gross to net calculation Payroll services outsourced to an external vendor in North America by company size Time and attendance 15% 15% Payroll self-service Year-end tax form distribution Year-end tax form printing Payroll tax preparation and filing % % 1 35% 1 Outside North America, organizations 0% with more than 10,000 employees were 80% more likely 100% to outsource portions the Payroll services outsourced to an external vendor outside North America by company size Payroll function, while smaller companies may not have a presence in certain global regions outside North America or simply decide to outsource the entire Payroll function (full BPO). Time and attendance 1 3 Payroll self-service 4 Year-end tax form distribution 1 Year-end tax form printing 3 Payroll tax preparation and filing 2 2 Garnishment/tax levy administration Check distribution Check printing 15% 46% Gross to net calculation 1 35% 1 The Payroll Operations Survey summary results 16

18 55% Unsatisfied Satisfied Very satisfied 55% 55% Unsatisfied Unsatisfied Satisfied Satisfied Very Very satisfied satisfied In North America by company size In North In North America America by company by company size size > 100k 66% 3 > 100k > 100k 66% 66% Very unsatisfied Unsatisfied 6 6 Satisfied 75% 75% 75% Very satisfied 66% 66% 66% < 1k < 1k< 1k 0% 0% 80% 80% 100% 100% What What What is is the the is level the level level satisfaction satisfaction What with with the your with level your outsourced your satisfaction outsourced with service your service outsourced arrangement? arrangement? service arrangement? Very Very uns Unsatisfi Satisfied Very Very sati In In APAC, North North In North EMEA, America America and LA 2 In North America In APAC, In APAC, EMEA, EMEA, and and LA LA % 55% 55% 55% Not sure Very Very unsatisfied Very unsatisfied Unsatisfied Unsatisfied Satisfied Satisfied Satisfied Very Very satisfied Very satisfied satisfied 1 55% Very unsatisfied Unsatisfied Satisfied Very satisfied 46% 46% 1 1 Not sure Very Very unsatisfied unsatisfied Unsatisfied Unsatisfied Satisfied Satisfied Very Very satisfied satisfied In In North North APAC, In North America EMEA, America by and by company by LA In company by North company size size America size size by company size In APAC, In APAC, EMEA, EMEA, and and LA LA by company by company size size 75% Very Very unsatisfied Very unsatisfied Unsatisfied Unsatisfied 90% Satisfied Satisfied Satisfied 4 75% 75% 75% 5 75% Very Very satisfied Very satisfied satisfied 66% 66% 66% 66% > 100k > 100k > 100k 66% 66% 66% > 100k % 3 3 < 1k < 1k < 1k < 1k 0% 0% 0% 80% 80% 80% 100% 100% 100% 80% 100% 75% 75% Very unsatisfied Unsatisfied 90% 90% Satisfied Very satisfied > 100k > 100k 66% 66% < 1k< 1k 0% 0% 80% 80% 100% 100% Very Very uns Unsatisfi Satisfied Very Very sati In In APAC, APAC, In APAC, EMEA, EMEA, and and LA and LA In LAAPAC, EMEA, and LA In terms outsourcing, what are the top areas focus or improvement relating to vendor services? 2 Compliance 2 and 2 controls 2 51% Process and technology integration Cost savings and productivity improvements Not sure Very Very unsatisfied Very unsatisfied Not 3 sure 35% Very unsatisfied 46% 46% 46% Payroll accuracy 46% Unsatisfied Unsatisfied Unsatisfied Upgrading/modernizing technology platforms Satisfied Satisfied Satisfied 2 Satisfied Employee and manager self-service capabilities Standard and ad hoc reporting capabilities Payroll timeliness Payroll corrections and adjustments Very Very satisfied Very satisfied satisfied 1 Very satisfied Consolidation and simplifications solutions, In In APAC, APAC, In APAC, EMEA, EMEA, and 1 vendors, and LA and LA by and/or In by LA company APAC, by contracts company EMEA, size size size and LA by company size SLAs and quality measurement > 100k > 100k > Government 100k and 66% customer 66% 66% > service 100k 1 66% umber employees umber employees 75% 75% 75% 75% Very 30% Very unsatisfied Very unsatisfied Unsatisfied Unsatisfied 90% 90% 90% 90% Satisfied Satisfied Satisfied Very Very satisfied Very satisfied satisfied umber employees umber employees In terms In terms outsourcing, what what are are the the top top areas areas focus focus or improvement or relating relating to to vendor vendor services? services? The survey results suggest that the level satisfaction with current services outsourcing arrangements is much higher in North America at 7 satisfied or very satisfied, as compared Compliance Compliance to and and controls for controls the other global regions. The percentage Process dissatisfied and very dissatisfied is nearly Process and and technology technology integration integration Cost equal at for North America and for the other Cost savings savings and and productivity productivity improvements improvements global regions. Payroll Payroll accuracy accuracy % 35% Upgrading/modernizing technology technology platforms platforms 2 2 Even the most satisfied organizations with their Employee Employee and and manager manager self-service self-service capabilities capabilities outsourcing arrangements seek opportunities to Standard Standard and ad hoc ad hoc reporting reporting capabilities capabilities improve vendor relationships and services provided. Payroll Payroll timeliness timeliness Payroll The most Payroll corrections common corrections and focus and adjustments areas adjustments include the vendors Consolidation Consolidation and and simplifications simplifications solutions, solutions, compliance with current processes and regulations 1 vendors, 1 vendors, and/or and/or contracts contracts and enhanced SLAs SLAs and integration and quality quality measurement measurement with other systems. 1 1 Government Government and and customer customer service service Very unsatisfied 0% 0% 30% 30% Unsatisfied Satisfied The Payroll Operations Survey summary results 17 Very satisfied

19 Future plans for for the scope services service outsourcing Future plans for for the geographic scope service outsourcing Future plans Future for plans the Future scope for the plans scope services for the services scope services Future plans Future for plans the Future geographic for the plans geographic scope for the No geographic scope scope 2 No change service outsourcing service outsourcing service outsourcing No No change service outsourcing service outsourcing service outsourcing Reduce Reduce scope geographic services scope Increase scope No Increase changeno change No change No services changeno change No change 6 geographic scope Reduce Reduce Reduce Reduce scope Reduce scope Reduce scope geographic geographic geographic services services services scope scope scope The future plans for outsourcing are decidedly Increase scope limited Increase scope with Increase scope respondents indicating no change Increase to the scope Increase Increase services services services 6 6 geographic 6 geographic geographic services and 6 indicating no plans to change the geographic scope outsourcing. scope scope scope How many years has the current outsourcing contract been in in place? Those who responded were unsure their future plans or only considering outsourcing in certain countries or regions. In In North America In In APAC, EMEA, and LA LA 1 How many How years many has years How the many has current the years current outsourcing has outsourcing the current contract outsourcing contract been been place? contract in place? been in place? 2 Up Up to to Up Up to to In North In America North America In North America 33 years In APAC, In EMEA, APAC, and EMEA, In LAPAC, and LA EMEA, 33 years and LA years years > > 77 years > > 77 years Up to Up to Up to Up to Up to 2 3 years 3 years 3 years 3 years 3 years years 4-7 years 4-7 years 4-7 years 4-7 years > 7 years > 7 years > 7 years > 7 years > 7 years Up to 3 years 4-7 years > 7 years In North America, outsourcing relationships with service vendors are very mature with 76% respondents having their contracts in place for at least four years. The average duration was nearly six years. Outside North America, contracts have been in place for three or fewer years and the average outsourcing relationship was less than four years. The Payroll Operations Survey summary results 18

20 Section 6: Compliance and taxation What is your level state taxation awareness for U.S. domestic short-term business travelers? N/A No U.S. business travelers What is your level state taxation awareness for U.S. domestic short-term business travelers? 1 1 Travel and expense data We do not track Internally developed procedure Employee self-reporting External vendor Issue identified, 1 determined next steps Partial awareness for select population/ jurisdictions Developing process and systems to address Reporting to jurisdictions Exploring exposure and compliance 0% requirements N/A No U.S. 30% business travelers Issue identified, determined next steps Partial awareness for select population/ jurisdictions How do you track U.S. domestic business travel? What is your level state taxation awareness for U.S. domestic short-term business travelers? 1 1 How do you track U.S. domestic business travel? Travel and expense data We do not track Internally developed procedure Employee self-reporting External vendor Issue identified, determined next steps Partial awareness for select population/ jurisdictions Developing process and systems to address Reporting to jurisdictions Exploring exposure and compliance requirements Developing process and systems to address N/A No U.S. business travelers An increasing number employers are Reporting focused on to tax compliance associated with short-term business travelers and jurisdictions international assignees; however, many employers continue to struggle with tracking their workforce, collecting data, 1 and processing global s. Exploring exposure and compliance requirements 0% 30% Respondents methods for tracking business travelers varied widely. One-third relied on travel and expense data, while did not track their employees movements despite having U.S. domestic business travelers or were not sure how or if they are tracked. What resources data are needed to support tax compliance for sh How do you track U.S. domestic business travel? Manual procedures and/or system modifications Travel and expense Employee data work location We do not tracking mechanisms Internally developed procedure Have not determined Employee self-reporting Internal policy to establish protocols, thresholds, Not and sure responsibilities External vendor Tax guidance for jurisdictional requirements Management support to address issues 0% 30% Manual procedures and/or system modifications Employee work location tracking mechanisms What resources data are needed to support tax compliance for short-term business travelers? Have not determined Internal policy to establish protocols, thresholds, and responsibilities Tax guidance for jurisdictional requirements Management support to address issues % 0% 30% The majority respondents acknowledged a need for a compliment resources to support compliance, including technical guidance, systems support, and the development internal policies. What resources data are needed to support tax compliance for short-term business travelers? Manual procedures and/or system modifications Employee work location tracking mechanisms Have not determined Internal policy to establish protocols, thresholds, and responsibilities Tax guidance for jurisdictional requirements The Payroll Operations Survey summary results 19 2