HR Technology: Pay as You Go

New mobile payroll solutions let employers manage payroll from anywhere.

By Jennifer Taylor Arnold Nov 1, 2013

When Jesse Lavender started his video and Internet production company, he was a sole proprietor assisted by a handful of contractors who were hired as needed. But when his Atlanta-based firm, Lavender Digital Media, grew to a staff of five full-time salaried employees in just one year, he knew he had to find a payroll solution.

He did not have the resources to hire a staff person to handle payroll, but it was difficult for him to do this task himself because his work required him to be on the road frequently. "I’m in my office half the time, out half the time," Lavender says. The idea of spending more time in the office to take care of payroll didn’t hold much appeal.

Fortunately, his payroll provider had just introduced a mobile app, which he was able to download to his smartphone. Now, "I can do everything from my phone," Lavender says. "It allows somebody like me, who doesn’t have someone on staff, to do [payroll] when I’m out filming."

Mobile Use Grows

Lavender is not alone in his desire to take care of payroll quickly and easily with maximum flexibility. "Business leaders of today are fast-paced," says Jesse Burgess, president and CEO of Smyrna, Ga.-based Payroll Center Inc., which created Onpay, the payroll solution Lavender uses. "A mobile solution fits their needs and their world. They can access it from a laptop, a mobile phone—it meets them where they are," Burgess says. "The primary goal is to allow a business owner to process payroll start to finish without having to be in the office."

According to the results of AT&T’s 2013 Small Business Technology Poll, use of smartphones for small-business operations has more than doubled in the past five years, with 42 percent of respondents reporting use in 2008 and 85 percent doing so this year. In addition, more than two-thirds of businesses are using tablets to access business-related technology.

Respondents to the poll, which surveyed 1,000 businesses with fewer than 100 employees each, reported that they use mobile apps to save time, increase productivity and reduce costs. Employers using mobile payroll applications say the tools provide all three of these benefits and more.

Jeff Phillips, vice president of HP Investments Inc., a mortgage firm based in Rohnert Park, Calif., is responsible for payroll for the 10-employee company. Performing the task used to add to his stress level. "It was a whole ordeal," he says. "Before, everyone had to call in their hours, and I had to be at my desk on their schedule." Although Phillips used a sophisticated Web-based payroll system, it didn’t offer the flexibility he needed. A reminder would come up on his calendar, but if he couldn’t take immediate action, the reminder would go away and he would forget about it.

Since switching to his payroll company’s mobile application, Phillips can handle payroll from anywhere using his smartphone. "I’ve done [payroll] on the golf course," he says. "I’ve done it sailing. It’s superconvenient." Phillips, who uses a mobile app available through the Run Powered by ADP small-business solution, says he can now "run payroll in less than 10 minutes. I didn’t have to hire someone to do that job."

Small-Business Solutions

As Lavender’s and Phillips’ experiences suggest, mobile payroll apps are particularly appealing to small businesses without a lot of staff support.

Michael Plonski, senior vice president of product development for ADP Small Business Services, says Run Powered by ADP can handle at least up to a few hundred employees. But he notes that 50 or fewer employees is "the sweet spot."

As companies grow, they become more likely to hire someone to handle payroll and related tasks, and the appeal of a mobile payroll application diminishes.

Several types of functionality fall under the umbrella definition of "mobile payroll," so HR professionals in the market for a solution must be clear about their needs.

Stand-alone apps—those that are not part of a larger Web-based payroll system—are the most basic. These solutions work more like time and attendance systems, allowing employees to clock in and out from their personal smartphones and allowing employers to review hours and import data into other business software tools like QuickBooks.

Park Avenue Catering Co. in Cotati, Calif., uses a stand-alone mobile app called TimeClock to compile payroll for its more than 225 offsite hourly employees. Park Avenue equipped each site supervisor, or "captain," with an iPod loaded with the TimeClock app, which was developed by Corvallis, Ore.-based firm Scavatec.

"We spend less time trying to determine hours for people, because the staff clocks in themselves on the iPod, rather than relying on the captain" to remember everybody’s hours, says Park Avenue manager Tani Hooper.

Victorio Chavarria, TimeClock’s developer, says Park Avenue is representative of his app’s users. "Businesses in which the worksite changes stand to benefit the most," he says. "Many of our customers, for example, are in the construction, landscaping and catering businesses."

More-sophisticated apps like Onpay and Run Powered by ADP are extensions of a full-function cloud-based payroll system and allow mobile access to a limited set of frequently used tasks. They provide the same features and benefits of modern software-as-a-service (SAAS) cloud-based payroll systems, such as communicating with financial institutions; tracking federal, state and local taxes; and reporting on employee benefits accounts.

All mobile payroll apps allow the user to review and approve a payroll run from a mobile device. Beyond that, mobile functionality varies from app to app, regardless of whether it’s a stand-alone or full-function product. For example, an app may provide different levels of access to different user groups, allowing accounting staff to view payroll reports but restricting payroll approval to an administrator. Or it may permit employees to view their current pay period and year-to-date pay figures and direct deposit statements. Some mobile payroll apps work in real time, while others use batch processing.

Evolving Features

The amount and type of functionality employers want on their mobile devices are changing quickly, as hardware offerings expand and users get more comfortable with mobile technology. When ADP was preparing the Run mobile app for launch in 2010, the company conducted extensive research. It asked clients what functionality they would want from a smartphone if they were on the go. Clients said they wanted to input payroll, view a few reports, look at payroll preview, click submit and be done. So, "That’s exactly how we built it," says Siobhain Towell, vice president of product management for ADP Small Business Services.

There’s also the issue of design and usability: Trying to provide too much functionality on a smartphone makes the app confusing and hard to read. The emergence of tablets introduced another option, one that provides more screen space without tying the user to his or her desk. As a result, vendors are adapting their products’ functionality.

The Onpay mobile app allows Lavender to review and approve payroll, make adjustments as needed, and add new employees. It even warns him when an employee is approaching the paid-time-off limit. When Lavender returns to the office and logs in to the full website, all of the tasks he performed through the mobile app are displayed. His employees can use the app, as well; by downloading it to their personal smartphones, workers can check their benefits balances and view their direct deposit notices.

Run Powered by ADP offers several levels of mobile and cloud-based functionality depending on the package, or "bundle," the employer chooses. Basic payroll functions are included in all packages; higher-priced packages include additional services like access to an HR best-practices library and a "document vault" service that provides secure cloud-based storage of important documents.

User Access

When choosing a mobile app, consider who will use it and what kind of device they will access it on. Smartphones aren’t the only mobile devices; all portable, Web-enabled devices, such as tablets, laptops and some MP3 players, also fall under that category. Some vendors offer one app for smartphones and another for tablets; others focus on smartphone access only and direct tablet users to the full website.

"A small-business owner might use his phone when he’s standing in line somewhere, and then later in the afternoon log in from his laptop or tablet," Towell says. "You want [the devices] to all work in sync." Run Powered by ADP offers a free app for mobile use as part of its larger solution, and users can access the full cloud-based system from a tablet through the Internet.

Before investing in a solution, find out exactly what the target user group is using—don’t assume. At Park Avenue, Hooper found that a significant portion of the workforce did not own smartphones. That led to the decision to place company-owned iPods at each worksite.

Also consider the devices’ operating systems. Most large vendors’ mobile solutions are compatible with both Apple’s iOS (which fuels iPhone, iPod and iPad devices) and the Android OS, but stand-alone apps available for download may work with only one system.

Convenience and Cost

For employers already using a cloud-based payroll solution, the related mobile app is usually available at no extra charge. Most SAAS payroll solutions cost a flat monthly fee of roughly $40 for about 50 employees, with additional charges per employee as staff size increases. Some providers charge per pay run or check.

Users can download stand-alone apps from a device’s app store. Some apps are free; others cost 99 cents to $8.99 per download.

But not all apps are created equal. "Particularly in this space, it can be hard to assess maturity," Chavarria says. "Anyone who’s downloaded a mobile app knows that there’s a lot of junk out there. Take your time. Make a list of the capabilities that are important to you. Try a few of them out."

Whether stand-alone apps or part of a larger cloud-based system, these mobile solutions can generally be deployed quickly and easily. "Download an app, register it to an account, and start using it," Chavarria says. "Most are pretty user-friendly."

On the Horizon

With the rapid pace of change in technology, expect to see continued innovation and expansion of mobile capabilities. One possibility is location logging for mobile timekeeping systems, which would allow employers to see where their employees are physically located when they’re clocking in and out. Experts also predict increased integration in the future between payroll solutions and other HR technology, such as performance management, time and attendance, and HR information systems.

For now, employers like Lavender are happy with the flexibility and efficiency today’s mobile apps provide because they allow leaders to concentrate on expanding their businesses.

"It’s helped me not think about the whole payroll thing," Lavender says. "Payroll is the last thing I really want to do."

Jennifer Taylor Arnold is a freelance writer based in Baltimore.

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