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Mosaic Insights

What is Contingency Payroll?

What is Contingency Payroll:

  • Contingency payroll is a term used to describe backup payroll processing support typically used in emergent situations. At Mosaic, we offer contingency payroll services to UltiPro clients. Clients who seek contingency payroll services typically fall in one of two categories:
    • Event Preparedness: Clients will seek out contingency payroll service as a proactive support model to mitigate risks associated with unplanned events such as a natural disaster or unexpected staffing changes, which may affect their ability to complete their payroll seamlessly.
    • Short Term Backup: Clients who have a short term need for someone to manage their payroll, often referred to as short term staff augmentation. A short term need like this could be brought on by many different business situations, for example, planned leaves of absences or merger and acquisition activities including divestitures. 

How would contingency payroll work within my company?

  • Payroll Shadowing:
    • The first step is to shadow how your company processes payroll. The shadowing should take place from the beginning of the process (after your employee’s time has been approved) and should end with the creation of a GL file. Payroll shadowing can be conducted on site at a client’s offices or virtually leveraging video conference technology and screen sharing.  
  • Incorporate Best Practice & Efficiencies:
    • During the shadowing process, your contingency payroll provider should learn your organization’s current way of processing payroll while looking for ways to incorporate best practices and efficiencies through automation. 
  • Standard Operating Procedure (SOPs) & Payroll Processing Checklist
    • The output from the payroll shadowing is a comprehensive operating procedure which details your organization’s payroll processing from start to finish in narrative form. The SOPs are leveraged to process your organization’s payroll during regularly scheduled shadowing’s or when an emergent need is enacted. The SOP’s are reviewed and updated as changes in your organization’s process occurs.
      • For example, for Mosaic Contingency Payroll clients, the Mosaic team will perform a minimum of four payroll shadows or independent processing. During the scheduled shadows, the team follows the client’s SOPs, ensuring any edits or updates are made. Scheduled shadowing’s are critical to the success of Contingent Payroll Service because they ensure the team remains current on the organization’s payroll and the SOPs remain accurate. Mosaic clients often take advantage of the quarter scheduled independent processing for their in-house payroll team to schedule time off, complete training, or use their time for other projects.
    • In addition to the SOPs a comprehensive payroll checklist is created specific to the steps, tasks or processes which must be completed to ensure a payroll process is completed accurately and consistently.  

Why should I consider contingency payroll?

  • Peace of mind: knowing that your company is covered at the drop of a hat, regardless of the situation. With contingency payroll services you know there is a safety net and your most essential employee needs will be met.
  • Payroll Best Practice and Process Improvement: our UltiPro subject matter experts leverage best practice and industry standards to make recommendations about your current way of processing and incorporate them into your future payroll processing.
  • Documented Payroll Process: following your current state shadowing, best practice and process improvements are incorporated resulting in the output of your organization’s documented payroll process. This ensures your organization’s needs are met, your payroll operations are streamlined and during periods of scheduled or emergent situations your end to end payroll process can be picked up and processed virtually.

Taking the benefits of contingency payroll one step further, some clients consider completely outsourcing their payroll processes. This outsourced payroll offering is also known as Managed Payroll. There are many benefits to managed payroll and can include:

  • Peace of mind: Contingency payroll ensures you are covered in case of an emergency but by completely outsourcing your payroll you ensure experts will manage your process and it will be done correctly, every time
  • Strategic focus: Managed payroll also removes the day to day tactical duties off your team and allows them to focus on strategic business initiatives
  • Compliance: With managed payroll you don’t have to worry about new/updated rules and regulations for compliance, payroll law changes frequently, but your managed payroll team will ensure your payroll is compliant and up to date
  • Best practices: The payroll experts managing your process will implement best practice and continued process improvements 
  • Avoiding mistakes: With managed payroll you can count on experts to follow your processes consistently
  • Enhanced security and reduced fraud: Managed payroll ensures segregation of duties which removes the risk associated manual manipulation after time files have been approved
  • Staffing changes: After any unexpected team changes, or a reduction in force, you may not want to backfill a position, outsourcing may be the way to go
Posted by Cherie Barnier at 4:00 PM

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