HCM and Payroll Buyer’s Guide

Mapping the right HR and payroll solution to your business outcomes.

Guide

2 HCM and Payroll Buyer’s Guide

Table of Contents

Introduction 3

Getting Started 4 Define Business Drivers 4

Identify Business Requirements 4

Consider System Options 5

Guide to Evaluating Vendors 8 Business Scenarios to Consider 8

Deployment Considerations 10

Making the Business Case for Change 11

Conclusion 11 Why Make the Change Now? 11

HR and Payroll Capabilities Checklist 12

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Introduction. In a rapidly changing world, becoming the ultimate destination workplace is more critical than ever. Given the changes in the way we work, how workplaces and workforces are organized, and the relationship between workers and AI technology, organizations have a rare opportunity to rethink how a people data platform that elevates HR and payroll can help them master the future of work.

What does the right technology provider look like for your business today? What role does AI play? How about a few months or years from now? How will the right AI platform help you elevate your people and payroll? With so many organizations being stuck with outdated human capital management (HCM) and payroll technology, where do you begin? Informed by hundreds of forward-looking Workday customers, this guide is designed to help you identify your business drivers, refine your HCM and payroll solution selection criteria, and make the business case for change.

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Getting started. Define business drivers. Embarking on the journey to identify a new AI platform for HR and payroll can be both overwhelming and exciting. But before jumping in, it is important to first define the business drivers and understand how technology can support your business initiatives. To do this—and to avoid missing critical criteria—it’s crucial to spend time rigorously defining and validating the business challenges your HR and payroll systems should help resolve.

Start by understanding your desired state. Three steps will help you do this:

1 Define your goal and desired outcome:

• Map out where your organization wants to be in six months to a year

• Evaluate how changes might support future business plans across HR, payroll, and workforce management

2 Simplify the way you work that must also be addressed across the organization:

• Consider simplifying your technology footprint to reduce your administrative support burden while maintaining compliance

• Reduce manual processes and unify cross-functional processes for consistency and a frictionless workflow

• Identify specific areas where the organization can benefit from data-driven workforce management decisions and tracking of global labor costs

• Identify specific areas where the organization can benefit from contextual insight and credible data-driven workforce management decisions, gaining efficiencies and reducing costs

3 Map out your organization’s objectives and consider both internal and external factors, such as:

• Adapting to changing market conditions

• Gaining visibility into the health of the business

• Exploring new markets or lines of business

• Assessing external factors or competitive pressures

Identify business requirements. Now that your business outcomes are defined, it’s time to dig deeper into your business requirements so you can set your project up for success.

Define the project scope: Determine the operational or technical challenges you need to address within your project scope, including potential external and internal constraints that could hinder the success of the project.

Assemble a cross-functional team: Include people from HR, payroll, finance, operations, and IT to not only get a complete picture of the problem but to also find ways to solve it together.

Determine your project goals, objectives, and ideal outcomes: Pinpoint your business strategy, what you’d like to achieve, and where you’d like to be not only when the project is complete but also in the years to come.

Prioritize your business outcomes: Focus on your top three outcomes and identify areas you want to avoid.

There are also a number of questions to ask internally. See our Persona Questions and Use Case Scenarios below to help you prepare.

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Consider system options. Once you’ve defined your goals, priorities, and challenges, work with IT to understand what type of technology would benefit the business. To compare each vendor’s ability to meet your HR, payroll, and workforce management requirements, consider how your organization currently operates as well as how those processes may evolve. How does the ability to continuously plan aid in business operations today and into the future? Can you seamlessly execute on those plans across the organization while analyzing business outcomes to make operational adjustments? It’s important to understand the technology options based on how you hope to operate in the future and how your decisions potentially impact your business and your people.

There are a variety of technology solutions available for evaluation. Whether you consider an AI platform offering a single cloud solution for HCM/HR and payroll or engage with service bureaus, many solutions look similar on the surface. As you dig deeper, you will uncover unique approaches to data, cross-functional processes, analytics, services, support, and deployment. Learn more about your options below.

Consider these four factors to help determine which vendors to evaluate: Strategy: Identify vendors that will give your leaders and managers more visibility into all

corners of the business (people, finance, operations) and enable a more thoughtful view of the organization, providing real-time and contextual insight for data-driven decision-making.

AI philosophy: Ensure privacy and data protection, act with integrity when leveraging AI to realize significant productivity gains, empower teams to make smarter decisions, and continuously optimize entire business functions.

Operations: Ensure that your future system alleviates administrative burdens and dependency on tools such as Microsoft Excel®, shortens processing time, and introduces automation while reducing friction in core processing (for example, hire to pay).

Technology: Consider consolidating multiple systems into one, simplifying integrations, and leveraging a seamless update process that minimizes downtime. Choose tools and technologies that will help reduce the burden on IT.

Strategy AI Philosophy

OperationsTechnology

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Key consideration: understand each vendor’s approach to data and analytics and the impact to solving your organization’s business challenges.

Service Bureaus/Payroll ProvidersWorkday

Approach

One AI platform for HR, payroll, and finance, with dedicated account-level support while allowing in-house control

Data

• One source for data across HR, payroll, and analytics embedded in the AI platform

• Complete view of workforce head count, including contingent workers and contractors

• Worker attributes such as position, job profile, and skills

• Built-in security and data protection

• AI is designed to elevate human skills

• Industry-leading responsible AI that helps boost AI adoption and safeguard sensitive data with complete transparency and control

• Support for ongoing governance and compliance

• Global worker profile, including flexible control of worker attributes depending on country and territory

Core focus on outsourced payroll services and support enabled by inflexible software, which often includes dependencies on third parties

• Data is siloed and requires reconciliation across HR, payroll, and finance

• Limited or lack of control and transparency of data across HCM and payroll systems

• Undefined or no application of AI

• Analytics is a separate system requiring integration

• Limited access to timely payroll data for auditing and reporting

• Limited visibility into global head count, overtime, and associated labor costs

• Singular workflows limited to approvals and notifications and without any collaboration capability

• Separate processes often required for areas of the business such as recruiting, HR, payroll, talent, and more

• User interface often requires multiple security roles to ensure access, potentially resulting in an inconsistent user experience

• Limited number of security roles to use across the business

• Application-focused task initiation and management

• Possibly requires multiple point solution products connected to payroll

• Possibly relies on vendor for services engagement to make changes or apply

Cross-Functional Processes

• Intuitive, easy-to-change workflows, notifications, and approvals

• Responsible AI-driven workflows

• Consistent navigation leveraging all security roles in a single user experience

• Compliance-driven, with native gross-to-net payroll calculation engine for more than 60 countries

• Transparency, visibility, and control of the HR pay inputs and payroll workflows

• Unlimited, tight security that only allows people to see what they are supposed to see

• Ability to initiate tasks and take action from anywhere in the system

• Transparent rollout of compliance-related updates to all customers to keep pace with evolving regulatory requirements

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Service Bureaus/Payroll ProvidersWorkday

Analytics and Insights

• Single data source for native reporting, including payroll

• Built for HR and payroll dashboards with standard reports and easy-to-use report writer for business users

• Drill down to transaction and metadata in HCM and payroll based on real-time data

• Promote contextual, data-driven insights into labor cost analysis and inefficient HCM and payroll workflows

• Empower employees to have an understanding of their financial well-being

• Manage audits and anomaly detection based on AI

• Bring in third-party operational data to analyze in context of other HCM data

• Share report definitions and workflows with a customer community

Services and Support

• Flexibility to choose payroll services and global payroll approach

• Adjust your service-level needs to meet changing business requirements

• Global support 24/7/365

• Support backed by performance and response-time SLAs

• Team of experts continuously monitoring compliance-related regulatory changes with updates rolled out through the cloud

• Global customer community with every customer on the same version of the software for more effective collaboration

• Separate data reporting hub

• Static data in reporting and analytics

• Lack of point-in-time or trending reports and analytics

• Inability to drill into reports by different dimensions to deepen insights

• Inability to initiate actions within reports lack of understanding of employee’s pay and financial well-being

• Services engagement often required for complex reports and system changes

• Payroll services imposed by provider with often attached hidden cost

• Potential reliance on the vendor to make changes

• Different levels of support provided at an additional cost

• No performance SLAs unless individually negotiated

• Notable exclusions from availability SLAs

• Limited global support structure for meeting localization requirements

• Initial go-live with a focus on payroll and time and limited HR focus

• Limited number of workflows out of the box

• Limited integrations, dashboards, and reports during initial deployment

• Accelerated deployment offerings with limited features at go-live

• Customers on varying schedules to receive updates, enhancements, and innovations

Deployment

• Flexible, simplified, fixed-fee approach

• Out-of-the-box business processes, policies, reports, and dashboards

• Unlimited roles available at go-live

• Customers live in 16 to 26 weeks

• 60 days of hyper-care after go-live to ensure success

• Seamless update process

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Guide to evaluating vendors. Business scenarios to consider. As you test-drive products and discuss solutions, consider how best to explore the different systems through customized demos. Before your first meeting, prepare a set of scenarios you wish to see and functionality you wish to evaluate as part of live product demos. Consider hands-on events to test-drive key HR and payroll scenarios as part of follow-up conversations for your business users.

Key consideration. Prepare a current situation analysis. In your vendor demo, identify outcome-driven scenarios that impact your cross-functional teams in HR and finance and across your organization.

Demo Questions Critical Capabilities How You Benefit

Collaborative Plan-to-Hire Process:

How does the solution help with continuous planning and expedited hiring for key business roles with the right skills, including internal, external, and contingent workers?

Workforce planning with connections to job requisitions, skills, a pipeline of internal and external candidates, and the ability to track contingent worker spend and status.

Accelerate the plan-to-hire process with the flexibility to build internal talent with defined skills, hire externally, or borrow contingent workers.

Ensuring Day-One Readiness:

How can we streamline administrative tasks during key transitions from hiring to onboarding for all types of workers, including remote and contingent?

Seamless automation with built-in AI workflows to simplify the recruitment-to-hire process, engaging key internal stakeholders to ensure a successful new-hire experience.

Improve time-to-hire, productivity, employee engagement, and retention while fulfilling key business initiatives and skill sets.

Seamless HR, Pay, and Finance:

How can we streamline and automate HR, payroll, and workforce management to improve data accuracy? How can we reduce manual tasks related to aggregating and reconciling data to avoid manual paperwork and audits while helping to maintain compliance and reduce risk?

Connect HR data changes that impact compensation, benefits, time tracking, absence management, payroll, and cost allocations, including preview of gross-to-net results and imports from third-party systems.

Improve productivity and accuracy while helping maintain compliance.

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Demo Questions Critical Capabilities How You Benefit

Consumer-Driven Experience:

How can we address our need to provide a personalized and simple experience that addresses flexible work environments?

Gain multichannel access with a personalized user experience that highlights critical actions around HR, time, and payroll; promotes growth opportunities; and recommends actions.

Increase worker productivity and self-sufficiency through a multichannel, personalized experience within their most commonly used workspaces.

Promote Worker Mobility and Growth:

How can we empower workers with personal growth and skills development opportunities while promoting work-life balance?

Leverage machine learning to provide workers with visibility into stretch projects, gigs, and jobs they can take to grow their skills and advance their careers.

Improve retention and engagement while proactively building a pipeline for future talent based on skills demands.

Actionable Insights for Decision-Making:

What is the data source for reporting purposes? What types of reports and analytics are available to gauge retention and compliance issues? Can you enable gap analysis to assess current head count versus future skills requirements to support strategic business initiatives? How does analytics provide both predictive and prescriptive capabilities for leaders and managers to empower rapid decision-making?

Blend external data sets to establish a data hub that maintains role-based security, run sophisticated analysis with augmented analytics applications, and identify top opportunities and risks with dynamic visual representations and clear explanations.

Save time and resources with system consolidation to ensure data is secure and up-to-date, establishing one source of truth focusing on strategic work to analyze HCM and payroll data to raise insights to decision-makers so that faster decisions can be made in areas such as labor costing, strategic workforce plans, and compliance, which elevates human potential throughout the organization.

Diversity, Equity, and Inclusion:

How can we leverage technology to improve diversity and build an inclusive culture to drive positive change?

Native reporting and analytics to monitor and measure efforts in hiring, talent development, recognition, rewards, and employee experience.

Ensure diverse representation while valuing inclusion, belonging, and equity.

See checklist for business users to evaluate functional requirements for vendor demonstrations.

https://emt.gartnerweb.com/ngw/globalassets/en/human-resources/documents/trends/hr-top-priorities-ebook-2024.pdf

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Deployment considerations. To get the value and results you want, it’s important to get detailed information on the vendor’s deployment approach and methodology, how to engage in each step, and what to expect once your solution is live. Consider the following:

Deployment approach and methodology: Choose a vendor that can get you up and running in a predictable time frame with minimal risk. Look for a proven methodology that includes:

• Feature-rich, fixed-scope packages based on common deployments

• A view into what your data will look like in production

• A flexible and simplified experience throughout

• Resources to get you ready for go-live and beyond

• Stakeholders that are involved in your entire evaluation journey

Ensuring a successful deployment: Select a solution that delivers a smooth deployment, fast time to value, early mitigation of integration issues, and the support you need to leverage the capabilities of your new software. Make sure it offers:

• Consistent deployment across projects and products

• Collective expertise from prior deployments

• Early identification and mitigation of potential issues and risks

• Guidance and options throughout the project

• A single point of contact during the deployment

• Testing support to ensure integrations are complete and successful end to end before go-live

Clarity about total cost: If a vendor is clear about pricing up front, you’ll have the insight you need to assess how to invest in their solution. Many vendors charge additional fees after you’ve already signed on. A solution that appears less expensive initially could cost more over time. Make sure you aren’t caught off guard by:

• Costs outside of subscription and licensing

• Reporting fees for changes and custom reports

• Fees for extra services and consultations

Deployment management: No matter who manages the deployment, a vendor should be able to make deployment partner and services recommendations and stay engaged to ensure your success. Ecosystems and professional services teams can vary widely. It’s important to find ones with:

• Global consultants in the regions where you do business

• Tight alignment with internal teams to troubleshoot issues and escalate challenges

• Regularly trained and certified service partners and consultants to manage upgrades and new products

• Expertise in your industry

• Guidance to help you set up and train your internal team

• The experience to get you up and running quickly and effectively

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Services and support to ensure customer success: Choosing a vendor with a solution that can grow with and support your business is critical. To ensure you choose a vendor that offers a consistently excellent customer experience from the beginning of the sales cycle through deployment and production, ask if they provide:

• Service plans: Look for a range of services that can be consumed easily on demand, addressing different production stages and your teams’ learning and engagement styles.

• Customer success managers: Make sure you have access to an advocate dedicated to helping you navigate available resources to help you meet your current and future business goals.

• Training and education: The right training and education will help your teams get the most out of the system.

• Customer enablement: One-on-one and one-to-many consulting services can help your teams use and administer more effectively and adopt the right features and functionality to support your objectives.

• Collaboration with peers: The ability to connect with experts or other customers to share ideas, ask questions, and learn best practices will not only deepen your knowledge but also help maximize your investment.

• Support: Get timely resolutions to unexpected issues that may arise.

• Change management: Look for programs, plans, and resources to guide, equip, and support end users in successfully adopting the solution.

When you invest time and effort in finding the right technology provider and deployment partner, you’re setting the foundation for a smooth deployment and long-term success.

Making the business case for change. Now that you have completed your evaluation process, it’s time to secure approval and financial support from leadership.

1 Make your recommendation: Create an overview of your recommendation with key challenges, benefits, pros and cons, and a clear analysis of the risk of doing nothing. Include feedback from the evaluation process from market- and industry-specific customer references. Make sure to outline the initial cost of deployment, contract length and pricing, internal cost, cost/ benefit analysis, and estimated return on investment.

2 Review the transition process: Prepare for additional questions that may arise around implementation, transition strategy, and risk mitigation. Request resources for the implementation and transition teams. Take note of other internal projects that could affect the schedules, cost, or scope of the implementation.

3 Review the evaluation process: Highlight the steps you took in your vendor evaluation and selection process, including the business challenges that helped you determine your requirements and the vendors that you considered.

Conclusion. Why make the change now? In today’s environment, organizations can no longer afford to rely on outdated, disjointed systems as they strive to launch new business models, redeploy workers, and support workers’ shifting expectations. With the right AI platform for HR and payroll in place, you can gain the real-time insight you need to stay agile and elevate human potential in a rapidly changing world.

We’ve provided a solution checklist below to help you make sense of how Workday capabilities work together to deliver the business strategies and outcomes your organization will need now and in the future.

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HR and payroll capabilities checklist. To help business users evaluate solutions, it will be important to share a checklist of critical capabilities and why they matter as part of your evaluation process.

One source for HR, payroll, and operations data. A unified data core.

All applications should be based on a single source for data, including the ability to bring in third-party data. Transactions made in one area should be immediately reflected in other areas with no need for data reconciliation.

Responsible AI. Reduce manual effort by applying responsible AI to anticipate, orchestrate,

and optimize workflows, and which is designed to elevate humans.

One version. All customers should be on the same version of the system at all times to

increase community collaboration and sharing of best practices.

Employee experience. Universal device access.

All applications should natively support iOS and Android devices to take advantage of familiar activities and gestures. For other devices, a responsive HTML design should be provided.

Personalized experience. Applications should provide personalized recommendations for content,

tasks, and activities that are specific to the individual user. These recommendations can be based on the user’s usage history, the histories of similar users, and time-bound events.

Conversational AI assistant. A single natural language digital assistant (chatbot) should be provided as

part of the service.

Connection to natural workspaces. As part of the experience, users should be able to engage with the system

from where they spend a majority of their day. Users should be able to complete simple, common tasks without leaving their natural workspace to open a separate application.

Core human capital management. Single source for data across all HR functions.

Gain critical HR capabilities including compensation, benefits, head count planning, and more.

Flexible organizational management. Manage organizational structures to meet unique business requirements,

and adapt with drag-and-drop organizational modeling and mass actions.

Seamless onboarding experience for all. Engage with a dynamic prehire experience and onboarding process

that connects internal teams to help ensure day-one readiness.

Support belonging and diversity. Go beyond tracking and reporting diversity data to nurturing an inclusive

culture with insights that empower you to measure everything from hiring and promotions to your people’s sense of belonging—so you can see where you stand and then take action.

Local and global payroll. One platform for HR, payroll, and finance.

Optimize workflows across HR, local payroll, global payroll, finance, and analytics.

Adaptable frameworks designed for payroll and compliance. Run payroll your way to deliver on changes and evolving regulations without

compromising accuracy and compliance with an adaptable framework for payroll and compliance to perform simple and complex payroll calculations accurately, on time, and in compliance with local legislations.

AI-enabled experiences. Empower employees to understand their pay and unlock the strategic potential

of your payroll talent with simple, efficient experiences that use AI to make HR, workforce, and pay information intuitive for workers, and supercharge productivity so payroll professionals can focus on their strategic role.

Contextual insights. Be a data-driven business partner that informs workforce strategy with

complete, accurate data about pay with reporting and analytics in the same system as HR and payroll, using the most complete, trusted source of data possible—providing real-time insights about workforce costs, payroll, tax, and compliance to inform faster, better decisions.

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Total rewards (compensation and benefits). AI-powered intelligence.

Demonstrate the value of total rewards programs and their impact on business results with AI-powered insights and industry benchmarks to drive better benefits and compensation decisions.

Infrastructure and connectivity. Quickly adapt to emerging trends, leverage technology, and explore new

approaches to total rewards including an expanded wellness offering to boost employee well-being.

Personalization at scale. Create a culture of appreciation and recognition, fostering a sense of

belonging, appreciation, and purpose. Understand how their people feel about compensation and wellness offerings in real time through a survey solution.

Workforce management. A unified and secure system.

Streamline operations, gain valuable insights, and empower your people with a single system for HR, labor optimization, time, pay, and scheduling that gives managers better visibility and accuracy, controls labor costs, drives technology adoption, and eliminates complex integrations.

Worker-first design. Connect workers to what matters most: their schedule, timesheet, time off,

and payslip through a secure mobile app; empower frontline workers with schedule flexibility and control to set schedule preferences, swap shifts, pick up open shifts, and more; and reduce complexity for critical and timely tasks on mobile by giving workers multiple ways to check-in and out.

Visibility and insight. Give managers instant access to secure, data-driven insights to help drive

workforce decisions, optimize team performance, and boost worker productivity.

Talent optimization and performance management. Empower people-first strategies.

Deliver a unified source of truth for people and talent data, ensuring decisions align with business goals and greater agility in responding to workforce trends and change.

Unlock workforce potential. Have clear insights into employee skills and potential and empower

employees to take ownership of their career and personalized growth paths, activate managers as coaches, and catalyze leadership development.

Drive talent fluidity and agility. Create an agile workforce capable of adapting to change and reskill,

ensuring long-term competitiveness and sustainable success through proactive workforce planning and innovation.

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Recruiting and talent acquisition. Manage hiring volume and hiring at scale.

Streamline your workflow and operate at a global scale with configurable and automated workflows, a seamless connection to compensation, and the ability to edit and process offers and employee agreements en masse.

Engage and nurture candidates. Bring together internal and external talent, as well as active and passive

candidates, keeping them engaged and nurtured with a tailored, personalized job application process.

Support equitable hiring. Leverage masked candidate screening and diversity pipeline analytics

that help you reduce unconscious bias and drive the equitable hiring of diverse talent.

Empower hiring team collaboration. Communicate in real time about candidate status by connecting your hiring

managers, recruiters, interviewers, and those making referrals in an effective team process. Self-service tools and the ability for teams to work in their natural workspaces drive true collaboration.

Strategically manage the talent lifecycle. Combine recruiting and human capital management with job requisition

creation, management, and fulfillment in a single system. Increase productivity by streamlining the entire onboarding process—from background verification and offer management to hiring and first-day orientation—all within your core system of record.

Learning. Provide a personalized, contextual learning experience.

Simply and intuitively surface content and recommendations while providing workers with the relevant information and training they need. Embed learning contextually throughout a worker’s lifecycle, meeting the learner where they are, whether it be in onboarding, upskilling, or in other moments that matter.

Develop a culture of continuous learning. Integrate learning that ties to skills, people data, gigs, performance, and

career goals, and deliver a continuous and personalized experience that meets the changing needs of both your business and your people.

Unlock learning insights that drive effectiveness and agility. Measure the value and demonstrate the impact of learning with dashboards

and reports that combine live data across your organization. Analytics enables you to identify gaps and opportunities where you can use learning to increase results and pivot quickly.

Engage with external learners. Empower your organization with the ability to connect learning beyond your

internal workforce to vendors, contractors, partners, and more through an inclusive, collaborative, secure ecosystem.

Workforce planning. Flexible head count and cost planning.

Plan your workforce with flexible, multidimensional models that map to hiring, transfers, and retention plans, and collaborate with finance and business partners from a common source of data and role-based dashboards.

Analyze impact of workforce needs, costs, and compensation drivers. Perform what-if labor analysis across compensation pools and business

units to see the cost impact instantly and better understand current talent capacity and inform plans to build, buy, or borrow talent as needed.

Drive operations to maximize workforce performance. Optimize org structure and team skills mix to meet demand. Evaluate impact

of one-time events, such as restructures or mergers and acquisitions.

Make the right strategic workforce decisions and plans. Map plans to strategic initiatives, including new job families, skillsets, and

geographies, and see the impact upstream and downstream to create the optimal plan mapped to strategic initiatives and goals.

Analytics. Data centralization.

Leverage data from any source directly in the flow of work for better decisions and plans, and create a high-volume, unified, trustworthy data foundation for HR.

Data preparation and analysis. Empower HR with fast, efficient methods to create analysis-ready data,

perform analysis, and share insights.

Data democratization and adoption. Empower individuals across the enterprise to take action on rich,

multisource insights while ensuring appropriate data security to make more strategic, effective decisions.

Augmented and prescriptive analytics. Highlight anomalies and trends with operational data analysis powered by

machine learning and proactively identify key areas for improvement.

Customer community and feedback. Contribute and adopt best practices shared by peers.

A strong community of users should be available to network, share, and adopt best practices, with all customers using the same version.

Recommend and vote for new features. Vendors should be able to provide a proven track record of soliciting

input on new features, engaging with customers, and delivering customer-submitted requests in every major update.

Visit workday.com/workforce for more information.

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