CASE STUDY Payroll Outsourcing Services: An FPA Success Story With Hitachi Astemo
The use of payroll outsourcing services is a strategic decision for many companies in order to increase efficiency and employee satisfaction. In today’s dynamic business environment, companies are constantly looking for ways to optimise their processes.
At Hitachi, FPA has led a remarkable transformation in this area. Since 1 January 2008, we have been responsible for the accurate payroll accounting of four subsidiaries of the renowned Japanese conglomerate. This is a success story that illustrates not only the challenges of payroll and payroll processes, but also the positive impact that outsourcing your payroll can have.
The Starting Point:
Dissatisfaction With The Existing System
In the autumn of 2022, there were discrepancies with the existing payroll process in the various HR departments of four Hitachi branches in Germany. Employees were dissatisfied as changes to the current payroll process were not being implemented as expected and the error rate increased significantly, especially when new employees were hired. This was creating challenges because, while many employees were unaware of the internal problems, there was a significant amount of pressure on the HR departments, which was reducing the motivation within the team.
Management recognised that an immediate solution was required. It was a quick and collaborative decision to use payroll outsourcing services. The requirements for the new service provider were clear: it should not only handle the payroll in Germany, but also ensure that the individual needs of the 350 employees were adequately taken into account.
The Selection Process:
In Search Of The Right Partner
The search for suitable payroll outsourcing services was a thorough and comprehensive process, as the negative aspects of outsourced payroll services are well known. Several payroll service providers were considered, and Hitachi subsidiaries conducted numerous interviews to assess the capabilities and experience of potential providers. The following criteria were given particular emphasis:
- Experience and expertise: The service provider needed to have extensive payroll experience, particularly in servicing German organisations of a similar size and structure.
- Flexibility and adaptability: The ability to meet individual requirements and provide bespoke solutions was key.
- Technological expertise: A modern, reliable data processing and backup system was essential to ensure the quality of the German payroll.
- Customer focus: The service provider needed to have a clear focus on employee satisfaction and proactive communication strategies.
After an informative initial meeting with FPA, the decision was quickly made. We impressed them with our extensive expertise and ability to meet the specific requirements of Hitachi’s subsidiaries.
The Transition Process: From Planning To Implementation
Once the decision to go with FPA was made, the transition process began. In just two months, the entire payroll had to be reorganised, which required precise planning and execution. The process consisted of several steps:
1. Data Analysis And Migration
One of the first tasks was to analyse the existing data. It was established that the quality of the data from the historical accounts did not meet the requirements for error-free accounting. This finding was crucial as it formed the basis for all further steps.
FPA carried out a comprehensive data migration to its DATEV Lodas system. This included the adjustment and correction of discrepancies from 2022. This process ensured that only correct and complete data was transferred to the new system.
2. System Integration
The integration of the various systems was another critical step. FPA worked closely with the IT departments of the Hitachi subsidiaries to ensure that all relevant systems communicated smoothly with each other. This close co-operation was crucial to ensure a seamless transition.
3. Training Of Employees
An often overlooked but extremely important aspect of the outsourcing process is staff training. FPA organised training sessions to ensure that employees at all Hitachi subsidiaries were familiar with the new system and had all the necessary information. This training helped to increase employee confidence in the new process and reduce uncertainty.
4. Feedback And Adjustments
Following the introduction of the new system, the FPA sought continuous feedback from employees. This feedback was used to further optimise the process and make adjustments. This iterative approach ensured that the specific needs of employees were always at the forefront.
Taking Responsibility: Accurate Payroll Accounting
Since 1 January 2023, FPA has had full responsibility for payroll accounting for the entire workforce of around 350 employees. Each payroll requires special attention, as individual allowances such as Sunday, public holiday and shift bonuses as well as other benefits are carefully taken into account.
1. individual Customisations
As a specialist in payroll outsourcing services, we focus on taking into account the individual payroll requirements of each employee, including
- On-call allowances: These are given to employees who need to be available outside of regular working hours.
- Housing allowances: To help with the cost of living, employees who live in expensive areas can receive additional financial support.
- Company pension scheme: An important component of staff retention, providing additional security for employees.
By carefully considering these individual factors, the FPA has significantly increased employee satisfaction at Hitachi.
2. Transparent Communication
Another important aspect of payroll is transparent communication. FPA ensures that all employees have access to their pay slips at all times and are supported if they have any questions or concerns. This openness helps to strengthen employees’ trust in the process.
3. Error Reduction And Quality Control
The introduction of FPA’s payroll service has not only significantly reduced the number of payroll errors, but has also improved the overall quality of the payroll process. Through regular quality checks and the implementation of best practices, FPA has been able to ensure that payrolls are always prepared correctly and on time.
Achievements At A Glance
The collaboration between Hitachi and the FPA has achieved significant results in a short time:
- Increased employee satisfaction: The positive feedback from employees is reflected in a significantly higher level of satisfaction with the payroll process.
- Minimising errors: The number of payroll errors has been significantly reduced, leading to greater efficiency and a better working atmosphere.
- Professionalisation of processes: By implementing new systems and processes, FPA was able to take payroll to a new level.
Outlook For The Future:
A Sustainable Partnership
FPA is proud to be a trusted partner of Hitachi and its subsidiaries. The positive development and increasing satisfaction of its employees encourages us in our mission to continue to contribute to our customers’ business success.
Payroll outsourcing is not just about efficiency, it is also about employee satisfaction. At a time when companies are competing for the best talent, it is vital that employees can rely on a smooth and fair payroll process.
FPA will continue to work to optimise processes and provide innovative solutions to meet the changing demands of the modern workplace. We look forward to continuing to work with Hitachi and other organisations to stay at the forefront of payroll and achieve sustainable success.
Conclusion: The Benefits Of Using Payroll Outsourcing Services
In summary, there are many benefits to using payroll outsourcing services. FPA has impressively demonstrated this at Hitachi. From data migration and staff training to ongoing quality control, every step was taken with the aim of increasing efficiency and employee satisfaction.
By outsourcing payroll to an experienced payroll service provider, companies can focus on their core competencies while ensuring that their employees are paid fairly and transparently. The success Hitachi has achieved by working with FPA is a strong argument for outsourcing in this area. In an ever-changing business world, it is vital to remain flexible and efficient – and outsourcing your payroll enables you to do just that.