City and County of Denver Realizes Millions in Labor Cost Savings with Kronos Solution
The City and County of Denver is home to approximately 600,000 residents and includes Denver International Airport, the nation’s fourth-busiest airport. Nearly 13,000 employees keep government departments operating, from municipal offices to the airport to numerous event and recreation facilities.
With a manual paper-based payroll system, accurately processing payroll for employees at 51 agencies was a major headache. Employees completed paper timesheets and three-part leave slips that often took weeks to reach the agency’s timekeeper, who manually entered data into PeopleSoft. The payroll department had no access to the source documents for verification and was unsure if pay rules were applied consistently and accurately. Without timely workforce information, employees and their supervisors did not have accurate leave balances, making it difficult for supervisors to know if an employee had available time off.
Taxpayer approval of a new consolidated Department of Finance was a catalyst for centralizing all payroll functions into one division. To accomplish this, the City and County of Denver needed a system that would meet the complex needs of its many agencies, as well as enforce career service rules, comply with FLSA, and ensure accurate employee leave balances.
‘Unique business needs’ met, significant benefits delivered
An analysis of solutions quickly showed the Kronos® Workforce Central® suite would best meet the organization’s needs and integrate easily with PeopleSoft, and with TeleStaff™ in the future. “I knew we had a lot of flexibility within Kronos that could meet the needs of our various businesses,” says Linda Misegadis, director of citywide payroll and administration services. “With 19 different industries with unique business needs, we needed a system that didn’t require a developer every time we had a business requirement change or new pay rule or career service rule.”
The City and County of Denver has seen impressive results with its Kronos solution: millions of dollars in annual labor cost savings, increased productivity and efficiencies with its automated payroll system, and improved compliance with accurate and consistent application of pay rules and policies.
Efficiencies reduce FTEs and save millions in labor costs
All employees use the Kronos solution, except uniformed staff in the police, fire, and sheriff’s departments. A solution is being developed with Kronos that will meet the needs of the uniformed staff in the police, fire, and sheriff’s departments. Most employees clock in at their desktops, while field workers use the Workforce TeleTime application to log in and out. The automated time and attendance solution has brought new efficiencies to payroll processing. The City and County of Denver reduced payroll staff from 80 to 35, with impacted employees moving to open, unfilled positions or choosing to retire. The reduction of 45 full-time equivalents has resulted in $1.5 million in yearly labor cost savings.
Looking ahead, the organization sees further savings. “We anticipate an ROI of $5.2 million over the next five years related to our Kronos implementation,” claims Misegadis, “and an additional savings of $1.1 million per year in cost avoidance.” This ROI reflects an additional reduction in full-time equivalents, as continuing with the prior system would have required hiring additional staff to manually process payroll when new employees were added, and cost avoidance savings from choosing Kronos over another solution.
Payroll and FLSA compliance issues resolved
Prior to implementing its Kronos solution, the organization faced challenging issues with payroll accuracy and FLSA compliance. Overtime was not calculated but was reported on leave slips, allowing employees to be paid for overtime not worked and for supervisors to not record all employee time. When an employee left the organization, city auditors required the employee’s agency to submit a year’s worth of leave slips. If the agency was unable to produce slips to verify leave time taken, the employee had to reimburse the city. With the manual system, tracking flexible work schedules under FLSA was also inconsistent.
“Kronos resolved all these issues for us and has helped with compliance,” says Misegadis. Employees now enjoy immediate access to their payroll information and leave balances, and supervisors like seeing verification of leave time they have approved, leading to an increase in employee and supervisor satisfaction. Evidence of the marked improvement includes the organization earning the 2009 American Payroll Association’s Prism Award for excellence.
With greater access to timely workforce data, managers are now more proactive in managing their budgets. “Payroll can be controlled when you’re checking your budget and seeing things in real time, instead of waiting until year end and discovering you don’t have enough budget,” explains Misegadis. The Kronos solution is also helpful in tracking employee furlough days and cost savings generated.
Additional modules to increase ROI
To further extend its ROI, the City and County of Denver has plans to roll out additional Kronos modules. The Workforce Scheduler solution will be used to create and track the critical schedules of employees at Denver International Airport and other city agencies with complex scheduling requirements, with the call-out function ensuring required coverage of all shifts.
Using the Workforce Activities solution to automatically track grant and project activities will save thousands of journal entries every month, notes Misegadis. The solution will help accurately track use of grant funds and a project’s labor costs to provide a true total cost of ownership.
“Then Workforce Analytics™ will tie everything together,” she adds. “Management will be able to present strategic business plans related to workforce management, and they will have the tools to see if they need to increase FTEs.”
Noting that government will be held to the same standards as the private sector, Misegadis says that “considering that labor is our county’s largest operational expense, the Kronos system is instrumental in helping us be accountable and transparent with both our taxpayers and employees.”
Project benefits
“We anticipate an ROI of $5.2 million over the next five years related to our Kronos implementation and an additional savings of $1.1 million per year incost avoidance.” Linda Misegadis, Director, Citywide Payroll and Administration Services
- Automated time and attendance leads to payroll efficiencies that deliver millions in labor cost savings
- Consistent application of pay rules and policies mitigates compliance risk
- Improved workforce management tools expand visibility and ROI
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