Moving to Electronic Paystubs

HOW
WE
S O LV E D
Moving to Electronic Paystubs
FOR AMERICAN GREETINGS, WITH A WORKFORCE OF 40,000, COMMUNICATION WAS
THE KEY TO ACHIEVING A SUCCESSFUL OUTSOURCING SOLUTION. BY MARK HOPTON
W
hen American Greetings decided to investigate a new way to
cut payroll costs, we implemented a benchmark study. We
learned that 90% of our employees were already using direct deposit and we could
save money if we automated the paystub delivery
process. This meant that we would reduce the printing
and distribution costs associated with the paper notification process.
Initially, we thought about developing an in-house
solution, but we quickly realized that we had limited
Information Technology (IT) resources to maintain
and upgrade a system that would meet all of our employees’ needs. So we decided to look for a vendor that
could manage the entire process for us.
FINDING THE RIGHT FIT
Mark Hopton, manager of
Corporate Payroll Services
for Cleveland, Ohio-based
American Greetings
Corporation, can be
reached at 216-252-7300
or Mark.Hopton@
amgreetings.com.
When we began searching for an outsource service
provider, we realized we had some specific needs. We
lacked demographic data for all of our employees. The
American Greetings workforce of 40,000 includes
28,000 part-time employees across the country. We
didn’t actually know who had ready access to the
Internet and who had access to a telephone only. So our
chosen vendor had to provide both Web and IVR
(interactive voice response) access to payroll confirmations as well as faxing capabilities for securing printed copies.
We also realized that we needed a vendor that kept
abreast of all state laws and maintained compliance with
all changes regarding notification requirements. Plus,
we wanted a vendor that offered customer-service support for all employees, including those who speak
Spanish. Finally, we wanted a vendor that regularly
upgrades its solution.
After reviewing several options, we chose to implement ePayroll Services, a product of TALX
Corporation, a St. Louis-based business-process outsource service provider. Using the Web, telephone,
and kiosks in all of the company locations, employees
who participate in our direct-deposit program can
review current and previous pay statements at any
time. In addition, they can use the system to update personal information and make changes to W-2 and W-4
R E P R I N T E D F R O M H R O TO D AY
deductions, all of which are floated into the American
Greetings system.
G E T T I N G S TA R T E D
Simply put: communicate, communicate, communicate. We found this to be the single most important element in our ongoing success. First, we began by
educating our senior officers about how electronic
paystubs work and the cost-saving benefits they would
provide our company. We knew that having their support was critical to our success.
Next, we tested the product with representatives
from each of our employee segments—executives, manufacturing, sales, and part-time staff. We wanted to
find out what they liked, what they didn’t like, and what
they thought needed to be adapted for their population.
We were pleased to find that 99% of the test participants liked the solution. We took all of the participants’ suggestions into consideration and worked with
TALX to customize a solution that maintained the userfriendly look and feel of the company’s Intranet site.
Next, we met with department heads to discuss how
they could introduce the new service to their employees. We provided communications tools, including frequently asked questions and answers, and in-depth
information about the benefits of the service. We also
helped department heads trouble-shoot situations when
they met resistance.
Finally, it was time to communicate with the employees and roll out the service. We anticipated some resistance and culture shock. However, we were delighted
that our employees quickly embraced change.
R O L L I N G O U T T H E S E RV I C E
Six weeks before implementation, we started alerting
our employees to the upcoming changes using every
medium possible. We included notices with their directdeposit paystubs and paychecks. We wrote stories that
appeared in our in-house sales newsletter and benefits
newsletter as well as on our Intranet site.
We also sent a personalized letter to each employee
prior to the rollout. The letter explained what we were
doing, why we were doing it, and how the organization
and employees would benefit from electronic paystubs.
And to accommodate any unforeseen problems, the
NOVEMBER 2002
service was phased in for all employees over
a three-month period, allowing time to service problems and maintain a smooth transition. To date, we continue to inform our
employees about the program’s impact.
At the start, we anticipated a 10% resistance; however, we received complaints from
less than one percent. The two biggest concerns we heard were missing the feel of a
piece of paper and the security of the system.
After explaining the depth of security and
the limitations of misplacing a piece of paper,
employees quickly saw that the benefits of
change far outweighed their concerns.
PAY C A R D S F O R T H E F U T U R E
For American Greetings, outsourcing electronic paystubs has made sense. We’ve
increased the number of employees electing direct deposit for their payroll. And the
round-the-clock access to retrieving a
paystub over the Web or telephone eliminates the time spent tracking down a misplaced piece of paper.
Next, American Greetings is considering expanding the electronic-paystub solution to offer employees the option of
receiving their payroll via a paycard. This is
especially attractive for employees who do
not have a bank account for direct deposit.
The paycard works just like a debit card
except that the paycard service provider
maintains the employee’s account balance.
This new service will eliminate the cost for
processing checks. Employees will have the
option to receive their paycheck via direct
deposit/electronic paystub notifications or as
a paycard.
The most important thing we learned
from our experience of implementing electronic paystubs is to have an in-depth communications plan that will reach every
employee before, during, and after implementation. Don’t stop communicating until
automated paystubs become commonplace.
Don’t let the anticipated culture shock prevent you from moving forward. We reduced
our operating costs in the payroll department and redistributed our team’s time so
they can focus on other strategies that will
continue to streamline our operation.
Electronic paystubs have made a difference
for the entire company. HRO
NOVEMBER 2002