Paper-Free Payroll What It Means to Two Operators

Paper-free payroll—what it means to two operators
Nation's Restaurant News, July 11, 2005by Alan J. Liddle

Virtually paperless payroll is in place at 141-unit Domino's franchisee RPM Pizza LLC of Gulfport, Miss., and 18-unit Golden Corral franchisee BOTH Inc. of Virginia Beach, Va. But those firms achieved that distinction following decidedly different paths.

RPM for several years has licensed the UltiPro Workforce Management suite of human-resources administration and payroll applications from Ultimate Software of Weston, Fla. BOTH last year teamed up with payment card and payroll services specialist MarketView Resources Inc. of Mount Vernon, N.Y.

RPM in 2004 began using UltiPro's employee self-service and work force portal tools to provide workers with the digital equivalent of a paper pay stub. Through a self-hosted portal, RPM gives its 3,500 employees in four states online access to their individual payroll and benefits information and performance appraisal history.

Apart from the savings in production and distribution costs associated with putting company forms and handbooks online, the portal saves RPM $60,000 annually in costs related to printing and mailing direct-deposit payroll notices to workers. That was the word from Ultimate Software's Darlene Marcroft, who said all but 120 of RPM's employees are paid via direct deposit.

The Domino's pizza operator has time-and-attendance functionality built into its point-of-sale system, allowing that information to be passed electronically to headquarters.

Kim Ladner, RPM's payroll supervisor and 401 (k) plan administrator, said that along with "empowering" RPM's workforce, the portal is "freeing up administrative staff to focus on other important tasks." Among those tasks, she and Ultimate Software sources indicated, are the generation of reports supporting strategic decision making, such as those examining labor spending and employee turnover.

"Our customers on this were our coworkers," BOTH administrative manager Doreen Barrows said, explaining why her company worked with MarketView Resources to overhaul payroll. She said the new approach is "streamlined" and "much easier," but she added, "It is hard to put a dollar value on it [direct savings from the change]."

BOTH uses MarketView Resources' Web-enabled middleware with Best Software's MAS 90 business-management application to make ready the direct-deposit payments for employees with bank accounts and the loading of the debit cards issued to workers without accounts. It then uploads the relevant information to the payroll services vendor.

Employees can view virtual pay stubs at an online portal from home computers with Internet access or from dedicated kiosks installed by MarketView Resources in each client restaurant.

According to Barrows, the benefits to workers resulting from the new system include access to money 14 hours earlier than in the past and when payday falls on a bank-closing holiday. The new system also means savings for foreign-born workers who send money home because wire transfers cost less when done by phone using debit cards.

MarketView chief executive Derickson K. Lawrence reported that up to 97 percent of the nonmanagement employees at some BOTH restaurants are paid using debit cards. But he added that the share typically is closer to 75 percent.

Lawrence stressed that an important aspect of making the transition to paperless payroll is that such digital systems are easier to scrutinize for clues leading to additional process improvements.

According to BOTH sources, the corporate benefits from the paperless system include the elimination of three hours of payroll work for store-level managers each payday. Paperless payroll also eliminates about 12 hours of labor at headquarters in each pay cycle associated with envelope stuffing. Employees who receive payroll cards can access their money at certain ATM machines or at some retail chains, but they are charged relatively small fees by MarketView or the retailer to do so, Barrows indicated. She said BOTH management initially was concerned about a system charging employees fees to access wages but found through a survey that many were paying more to cash checks at liquor stores and check-cashing businesses.

Companies should not rush the transition to paperless payroll, however, Barrows warned, as the "resistance" to change expressed by some workers can best be overcome by "talking to all employees one on one."