Transcript for "Modernizing Payroll - Innovative Solutions for Today's Challenges": Hello, everyone, and welcome to Modernizing Payroll, Innovative Solutions for Today's Challenges. Thank you so much for joining us today. Alright. So let's go ahead and get started. We've got lots to cover today, and I would love to introduce our speakers. And we have Stephanie Obrycki, who is the director of customer experience. And we also have Jillian Cullinane, who is a senior director of CX project services. Welcome, and thank you for making time today. This session is consultative, not a product demo. Our goal is to help you protect accuracy, reduce exceptions, and return time to HR and finance by choosing a payroll operating model that truly fits your environment. We'll look at what's driving strain, the three profiles we see most often, and a practical decision lens for internal build, hybrid copilot, or managed execution. If you're a payroll administrator, I want you to hear this upfront. This is about elevating your role, not replacing it. And for CHROs and CFOs, you'll leave with a straightforward way to quantify the time, risk, and continuity benefits so you can make a confident decision. The nature of work has changed rapidly in the past few years. Complexity is at an all time high, capacity is strained, and HR is caught in the middle. If companies want to succeed in 2026, they need to tackle their capacity challenges head on. And even if you're using the best technology, this may not matter if you don't have the capacity to use it to its full potential. So why does HR's capacity challenge matter? It matters because 91 of workers say they're satisfied with their job when their company is effective at addressing workplace needs. 91% are engaged. 85% report being deeply committed to their organization, and only eighteen percent feel burned out according to the 2026 SHRM workplace report. So instilling confidence to employees that their needs will be addressed is critical to success. It's no secret that work and personal life intersect more than ever before. And with so many different generations represented in the workforce, their needs compete and vary. How do you appease all the expectations? Finally, speaking of capacity, only 17% of HR teams plan to add headcount this year. This means the capacity problem is only going to grow as complexity increases. So let's talk about what's driving the strain. So across industries, most payroll strain maps to one of three profiles. First, resource trained teams where exceptions and off cycles consume ten to twenty hours a week, and even leaders are stepping in to keep payroll moving. Second, multistate employers where jurisdictional differences raise risk as your footprint grows. Third, high turnover or seasonal teams running weekly payroll. Volume and pace make first paycheck accuracy and handoffs the make or break moments. So as we continue, I want you to listen for which profile sounds most like your world. Okay. So the pattern that we hear most often is simple. Exceptions take over, manual checks, off cycle runs, last minute corrections. They stack up and they consume hours that were earmarked for strategic work. Payroll weeks become unpredictable. Important projects slip up. If your week is defined by exceptions, know that you are not alone. Many teams report spending ten to twenty hours or more each week on off cycles, adjustments, and late fixes. That time comes directly out of your strategic initiatives, analytics, engagement projects, and manager enablement. In some organizations, even senior leaders find themselves jumping in to keep payroll on track, and we know that that's rarely sustainable. These themes come up again and again across teams who describe payroll as working but fragile, especially when the variables change. If that sounds familiar, the good news is there are well understood levers to reduce those exceptions and bring back predictability. And the fix doesn't have to be heroics. It can be operating design, automating common path end to end so that way routine runs are clean, designed for exceptions on purpose with clear cutoffs and payrolls and escalation routes. So that way your edge cases gonna get the right attention at the right moment. That combination is gonna reduce reruns and give HR and finance time back. So let's take a look at our second challenge here. Expansion is a great thing. We all want our businesses to grow until payroll has to absorb it. And so as organizations are hiring more and more across The United States, especially with the rise of remote work, the complexity can compound quickly. Every state and even cities bring their own tax accounts, filing schedules, and documentation requirements. And the variation isn't just tax. We have wage and hour laws and leave laws that change by state, sometimes by city, minimum wage updates, overtime thresholds, meal and rest rules, predictive scheduling, paid family and medical leave, state disability, auto IRA retirement mandates, the list goes on and on. So you add in garnishments and different agency notice processes, and our administrative load is climbing higher and higher with every new location. Multistate taxation adds another layer. Resident versus work state withholding. Local taxes, anyone here in New York City, Philly, Ohio, reciprocity agreements, rules that just don't line up with where people live and work. And if you don't have a unified approach, the result is misregistrations, later incorrect filings, and an uneven employee experience. The model that works best is to standardize how payroll operates while we can honor state specific rules. And, practically, that means a central governance layer, calendars, approvals, controls, state level execution rules that handle tax rates and leave programs and local taxes, and the filing cadence. Okay. Let's look at our third challenge here. Okay. What about our our weekly payroll and seasonal hiring waves? Those can put real pressure on the handoffs between onboarding time and payroll. So when you have hundreds of new hires that start quickly, small cracks in the system become really big pressure points. So first paycheck accuracy is especially critical. We all know that. And getting it wrong erodes trust faster than almost anything else with employees. In environments with tips, differentials, or complex time policies, manual reconciliation increases and reruns become more likely unless you have a model that's designed to absorb volume without sacrificing accuracy. So if your organization hires in waves or runs weekly payroll, you've likely felt these surge impacts. The handoffs between onboarding and timekeeping, they have to be and payroll have to be tight, or the exceptions are going to start to multiply. And teams that stabilize, they successfully do two things. They design clean automated handoffs for common paths, and they build an exception first mindset for edge cases, like those shift premiums or tips or last minute changes so those cases get the right attention at the right moment. The payoff is straightforward. Fewer reruns, a great first paycheck experience, which is gonna build trust for your new hires, and take pressure off HR and finance when volume peaks. Alright. So we've talked enough about our pressures and our challenges, those exceptions that are taking over the week, complexity that's rising with every new jurisdiction, and our weekly seasonal surges that compress timeline. So let's take a step back here and look at what a resilient payroll operation actually requires and talk about how do you choose a model that that fits with your reality. So my intent here isn't to suggest that anyone has done anything wrong. Payroll is a complex deadline driven operation. We see strong teams doing heroic work every week to pull off this extremely important function. My question is whether your structure gives your teams enough coverage and capacity to make accuracy and perfection predictable without the heroics. So as we walk through the ideal structure and decision lens, listen for where your current model might be fragile. Okay? Listen for think about those single person dependencies, your gaps in document bandwidth that can evaporate during those busier, more chaotic weeks. And if you hear yourself in this, it's simply a signal to explore added support, to think about how you might strengthen your internal build or bring in a copilot or consider managed execution so your team keeps control and gains predictability. Okay? So let's take a look at what good looks like, make it a little bit more concrete here. Okay. What good looks like in everyday operations. So in resilient environments, payroll is organized around a few core responsibilities. We've gotta have someone who's accountable for governance and compliance oversight, someone who's gonna lean into the complexity, our garnishments, our special runs, our commissions, reconciling the GL, and one or if we're realistic, sometimes more people focus on the high volume rhythm of hires, terms, updates, and employee questions. And then just as important as all of of those people is really that connective tissue. So our documented processes are clean handoffs and our true coverage plans. That's what keeps the operation from hinging on any single person and makes accuracy feel predictable. Again, not reliant on heroics. So there's a few simp signals that can help you gauge the strength of your operation. So let's think through some of these things. Can a backup run the cycle flawlessly when the primary person is out? Are payrolls and onboarding to time to pay handoffs documented and visible, or might they be in some people's heads and tucked away as tribal knowledge? Do pre and post journals land on time with minimal late corrections at close? Do weekly or seasonal surges consistently pull time away from planned projects? When those signals are healthy, the payoff is obvious. Cleaner cycles, steadier closes, fewer after hours escalations. It's a dream. Right? When they're not, a lot of teams find that adding coverage and named expertise, again, either internally or through a governed partnership, can stabilize the rhythm without having to change who sets policy or who approves pay. The goal is a structure that makes your work sustainable, gives you the ability to preserve control, and returns time for you to work on the priorities and strategic projects that you care about. Okay? So with that picture of good in mind, let's think about how do we make a decision between reinforcing your current build, adding a copilot, or shifting some execution. Okay. We're gonna do a quick quiz. So take out your phones. You can take just real quick notes or your pen and paper. We're gonna give this a go. Okay? So for each of these areas, we're gonna gauge your confidence and come up with a little risk score. So you're gonna give yourself a zero if when I read one of these three statements, you feel really confident. You're gonna give yourself a one in your risk score if you feel a little mixed, a little shaky, and you're gonna give yourself a two if you feel pretty fragile in that area. K? So we're gonna walk through this together. Are we ready? Alright. Okay. So three questions. So first, how confident are you that if you experience a miss in your world, penalties, audit, burden, reputation, or frontline morale, that you can recover or potentially avoid those misses entirely. Right? So we're gonna give ourselves a zero if we're super confident, a one if we're feeling a little shaky, a two if it feels like we're skating on thin ice. Alright. Our second question, how confident are you that you have the capability and capacity for payroll year round? So not just the know how, but truly the bandwidth to stay stable through the changes and surges that happen for you throughout the year. K? So zero risk if we feel super confident. We're gonna give ourselves a one. If we're feeling a little shaky, a little mixed, We're gonna give ourselves a two. Again, if we feel fragile, we're skating on thin ice. Alright. Last question to give ourselves a little bit of a risk score. How confident are you that you can that your current model can absorb seasonality? New jurisdictions, new entities without disruption. So, again, we've got a zero if we're feeling super confident. We've got a one if we're feeling a little iffy, and then a two if we're feeling like that would be tough, really tough for skating on thin ice. Okay. So add up our score across those three questions. If your total is three or more, it might be time to adjust your model. Okay? So if you're in that bucket, no need to fear. Right? I would just carve out some time with your team and talk through what's the average weekly hours you're spending on off cycles, manual checks and, like, corrections. What are some of the projects that might be slipping during payroll weeks, and and what's the downstream impact of that? Where might you have filings or first paycheck accuracy that's not quite predictable? If you start to look at the patterns here, that's gonna help you understand which operating model to potentially move into and give you a very straightforward case for adding that additional capacity or governance support. Okay? If you're seeing some of those signals surfacing in your world and you your risk score is a little tough there, again, now might be a good time for that operating review. Alright. So let's take one more look at those operating models. Okay? And it's important to know that any of these three operating models can be right for you. It's just all about the fit and the timing in your organization. So the first one that we see at the top here, internal management. This is best for organizations that feel they have stable capacity, strong backups, predictable volume. It's going to give you maximum control. It's gonna allow you to develop deep institutional knowledge. And if your risk score was low through the exercise we just did, if your coverage is documented, if your exception hours are sitting under five hours a week, this is probably the right model for you. The middle bucket there is where you might consider introducing a copilot. So this would be you running payroll internally regularly, but looking at how you can bring in expert capacity when you encounter some of those peaks or complex efforts. So maybe seasonal readiness, maybe some accelerated enablement, onboarding, periodic optimization reviews for your team, some of those tricky filings or an audit. Okay? You're gonna keep approvals and the policy, but your copilot can help you absorb some of the volume or bring in some extra expertise during those moments that matter. So, again, if your risk score was a little bit in the middle there, that could be a signal that this might be a good option. Or if your exception hours spike seasonally, if your first paycheck accuracy dips when you when you get hit with a high volume of hires, if new jurisdictions throw you for a loop, again, that copilot might be a good thing to to consider. And for managed execution here, we're actually gonna dive a clip. We're gonna dive a little bit further into this as this one might be a little bit new to you. And for that, I'm gonna go ahead and turn it back over to Stephanie to take us through what that managed execution model might look like. Thanks, Jillian. We've walked through the operating models and decision triggers that usually guide fit. For many teams, the signals are clear. Exception hours are high, filings are getting more complex with growth and coverage hinges on one or two people. When those realities show up, a governed partnership for execution is one way to create stability quickly. Managed execution is designed to be collaborative. Approvals and policy remain yours. What changes is who carries the repeatable deadline driven run work under a predictable calendar. And the aim is simple. Fewer exceptions, cleaner closes, and continuity that you can rely on, especially during PTO, vacancies, seasonal surges, or new entity launches. Rather than promises, I'll show you what the model looks like day to day, how responsibilities are divided, and how teams typically get started without disruption. If the mechanics resonate and the outcomes align with your priorities, you'll have a clear path to evaluate fit. Let's start with the practical economics and resilience of this approach, then move into roles and the day to day experience. I can't move this slide. When organizations try to build fully in house at scale, the math adds up quickly. A 2,000 employee footprint typically requires six to eight specialized payroll staff plus your HCM investment, compliance training, and documented backup for business continuity. All in, market data suggests total annual costs often reach $500,000 or more depending on footprint and pay frequency. Your costs may vary by market and scope, but the pattern is consistent. A managed model changes the equation. First, you instantly tap a team of payroll specialists without the overhead, no hiring cycles, no ramp time, and no single point dependency if someone leaves. Second, filings and payment obligations are handled under governed controls. Legislative updates are applied for you. That reduces penalty exposure and the midnight, did we miss a deadline moment? Third, capacity flexes with your business, peaks, vacancies, new jurisdictions, so you're not perpetually over or understaffed. Fourth, HR and finance reclaim time plan for planned initiatives while employees experience timely accurate pay with responsive support. And lastly, technology is part of the package, so you stay current without surprise upgrade costs or extra projects to keep the platform aligned with regulation. Put together, the managed payroll tends to deliver resilience, compliance, and efficiency, often at a lower or comparable total cost to building internally, especially when you factor in continuity and avoided risk. The bigger win is predictability, a calendar everyone trusts and fewer exceptions consuming double digit hours each week. To make this more tangible, here's how responsibilities break down and what the partnership feels like day to day. Okay. Clarity reduces anxiety. In a managed execution model, your team keeps the levers that define your operation, policy approvals, and final sign off. You provide accurate employee and wage data, submit approved time, and review pre and post payroll journals. The specialist team maintains payroll data, runs regular and off cycle payrolls, processes bonuses and corrections, delivers net pay, file and pays taxes, and aligns your general ledger. Governance anchors the partnership. A published payroll calendar, legislative updates applied on your behalf, and reporting aligned to finance and audit so close is smoother and audits move faster. What this feels like day to day is a predictable cadence, cutoffs, approvals, journals, and funding timelines that you can plan around, named experts who learn your environment and anticipate seasonal spikes or jurisdiction nuances, fewer escalations, off cycle and manual checks drop, first paycheck accuracy improves, weekly exception hours fall, coverage without the drama, PTO or vacancies don't jeopardize the run, Cross training and documentation live within the pod. To help teams get started without disruption, implementations typically begin with a short discovery to map pay frequencies, jurisdictions, and exception patterns, then a focus kickoff to stand up the governed calendar and reporting. The outcome we're aiming for is simple, predictable cycles, fewer exceptions, and leadership time redirected to planned work. If that's the kind of stability your signal suggests you need, the next step is a brief operating model review to confirm fit, quantify time returned, and risk reduced, outline roles, effort, and timeliness tailored to your environment. As you consider your path, remember, there isn't a single right answer. There's the model that best matches your capacity, risk profile, and growth plans. Some teams will strengthen their internal build with better cross training and backups. Others will keep day to day internal and add copilot during peaks or complex events. And for many, moving the repeatable run work into a governed partnership is what restores predictability while approvals and policy remain with you. If you're curious whether the partnership approach fits your environment, the next step is simple. A short conversation with a Paycor advisor to explore your signals, exception load, jurisdiction, complexity, and continuity needs, and discuss what a copilot or managed model would look like. It's an exploratory discussion, not a commitment. The goal is clarity. Is now the right time? What would change? And how the how governance and transparency are preserved? For payroll leaders, this gives you the language and structure to socialize internally, calendars, handoffs, and coverage that make weeks more predictable. For executives, it's a practical way to assess fit and understand the scope, how we might be able to help you ensure consistent controls and employee experience. If that would be helpful, use the link to reach out and we'll follow-up to schedule time. We'll keep it focused, answer your questions, and help you decide the path that best protects accuracy, reduces exceptions, and returns time to the priorities that matter most. And thank you for your time today.