The “5 W’s” of Payroll

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Payroll may not be the most glamorous function in an organization, but it is certainly one of the most critical. To better understand how this process takes place at a sampling of 179 Northeast Ohio organizations, we turn to the results of the 2013 ERC Payroll Practices Survey, which are summarized in the “5 W’s” below.

Who is processing payroll?

If you are in Human Resources (HR) or Accounting at your organization, there is a good chance that you or your departmental colleagues have some role to play in processing payroll. In fact at several organizations, payroll administration is an interdepartmental task shared by HR and Accounting or some other similar financial type department.

What are they using to do so?

The total number of payroll providers increased to 37 for 2013, up from 25 unique providers in 2010 when the survey was last administered. ADP is still clearly the most common provider cited (39%), but there appears to be a bit of dispersion in providers to a wider variety of local, smaller sized providers. Custom in-house payroll systems are still fairly unusual, at a consistent 3% of respondents in both the 2010 and 2013 surveys.

When do employees get paid?

Similar to the 2010 results when the survey was last administered, most employers pay on a bi-weekly schedule for both exempt & non-exempt employees. The second most common frequency is weekly for non-exempt employees only (17%).

Where can employees deposit their paychecks and view their paystubs?

Over half of employers now require employees to use direct deposit (a 16% increase since 2010), but paper checks are still an option at many organizations. Despite being a relatively common option, only 4% of employers require the use of paper checks as part of their payroll process. About 14% of the respondents indicate that they even provide payroll debit cards to their employees, with an even smaller 2% of these respondents requiring their use.

Paper pay stubs still have a slight edge over electronic pay stubs, but there is a clear movement towards using electronic stubs since 2010. Manufacturing organizations and smaller organizations with 200 or fewer employees tend to use exclusively paper paystubs more often than the larger, non-manufacturing organizations in the sample.

Why payroll?

To keep your organization running of course! Although money is not always the primary motivator for employees, chances are if your organization stopped paying its employees, not very many of them would want to show up to get the job done!