Thriving banking and financial organizations have the daunting task of balancing growth with risk management. Ensuring transactions at all levels – with customers, employees, vendors, government bodies, and other stakeholders – are carried out in a predictable, courteous, lawful, and compliant manner is a challenge in regular day-to-day banking operations but especially in times of growth.
Human resources outsourcing (HRO) is a viable option for proactively managing people, process, and financial risks. Experienced HRO vendors can improve employee engagement and retention, provide process predictability and compliance, and forecast expenditures objectively through reporting and analytics. The challenge is to find a trustworthy, results-oriented HRO partner
to assist. HGS has delivered front and back office processes, including payroll, in the banking and financial services industry (BFSI) for decades and not only has the expertise and scope to manage compensation projects at hand but also to shed light on further opportunities for process improvement. HGS leads HRO initiatives in India and the Middle East/North Africa (MENA) and has
a wealth of local knowledge to build on.
One of HGS’ clients in the United Arab Emirates (UAE) – a government-owned, full-service
bank that offers retail, corporate, commercial, investment, and private banking; wealth and cash management; corporate and project finance; and property management services from 48 branches – has seen continuous profitable growth through numerous awards, branch openings, lines of business, technological innovations, etc. for the past several years. With that growth comes
increasing HR pressures, and the client now internationally has 4500 employees on the bank payroll and 1700 resources through outsource/staffing agencies. Employing this sizable workforce requires careful risk management to stay within budgetary, profitability, attrition, and compliance targets. The client has turned to HRO to help manage the risk associated with payroll by lending
greater predictability, accuracy, objectivity, and proof of compliance.
To operate more efficiently, proactively manage variables and unknowns, and enable the bank’s HR team to devote time to more strategic activities (e.g., talent and performance management and workforce planning), the bank needed to streamline and optimize their HR and payroll processes – in particular:
Payroll processing for the outsourced staff:
Payroll for outsourced staff was managed by Finance, while HR managed payroll for direct staff. To promote consistency, provide a comprehensive view of the payroll function, understand the required cash flow, and ensure seamless, equitable, timely payroll processing for all staff, the bank needed to streamline and automate payroll activities.
Design and implement an incentive structure for the bank’s sales team:
As one of the largest banks of the UAE, the client has diverse, active sales teams deployed on targeted incentives and commission. However, there was no clear, standardized structure for calculating incentives. The lack of a standard methodology meant that the HR and Finance teams were confined to trivial, transactional activities to process pay, and overall productivity consequently decreased. To gain real-time visibility into compensation reporting and accurate incentive allocations, the Finance team needed support in collecting accurate data from the agencies and respective sales departments.
HGS, due to its expertise in handling large headcounts in the banking space, was engaged to process payroll for outsourced staff, improve the sales incentive program, and mitigate risks. Once engaged, HGS deployed payroll and accounting experts to the client’s headquarters in Abu Dhabi. After an organized hand-off, HGS assumed the role of the client’s payroll department by completing data entry and uploads, auditing submissions, and processing new hires, employee changes, garnishments, incentives, etc.
HGS’ structured, professional interactions with various departments and nine agencies yielded a level of understanding and quantity of data that allowed process harmonization, which included standardizing input elements and data points, as well as streamlining HR policies and offer letters. The HGS staff processes payroll based on the client’s pre-approved guidelines and handles exceptions according to clearly defined escalation procedures. In the UAE, every employee (outsourced or not) is entitled to certain healthcare insurance, vacation, and travel fare benefits; in their calculations and reviews, HGS ensures that staffing vendors adhere to these laws.
HGS experts developed, tested, and deployed a detailed sales incentives and commission process across all sales teams. HGS leveraged insights from its other HRO contracts to offer sales compensation options for the bank to consider. The bank selected the most suitable option, and the HGS team now lends impartiality and credibility to ongoing commissions and incentives calculations.
HGS brings highly customized payroll automation and reporting software to the bank engagement. HGS tailored reports for the bank’s enterprise resource planning system (ERP) to aid in workforce management. HGS payroll specialists also provide complex management information systems (MIS) reports for the sales incentive disbursement process. When salary/pay scales, job descriptions, and organization charts are updated, HGS makes adjustments to the software, reports, and procedures to help the client stay on track.
Since payroll is a time-critical activity, the client performs monthly checks for compliance assurance. Client and vendor also meet regularly to discuss continuous improvement opportunities and outcomes. HGS’ involvement has precipitated consolidation; stronger governance and workflows; increased visibility; and operational effectiveness in the incentive and claim reimbursement process. HGS reduces the client’s risk by:
- Proactively managing and reconciling staffing agency payments.
- Providing structured data that yields increased monthly payout predictability, especially for the highly variable incentives and commissions.
- Maintaining employee satisfaction and attrition levels through accurate, timely monthly compensation.
Since 2008, HGS has served as the payroll partner for the bank’s contract workforce. Metrics for payroll and compensation always revolve around accuracy and timeliness, and HGS continues to exceed expectations. HGS provides constant, all-encompassing support, thereby ensuring the levels of personnel retention and engagement that are critical to meeting sales and growth targets. For example, HGS:
- Coordinates with nine staffing agencies and numerous business line managers on HR’s behalf to achieve an accuracy rate of 100% in payroll processing for 1700 outsourced employees.
- Regularly achieves 99% quality scores in relation to disbursement of sales commissions, which has had positive impacts on attrition and overall sales results.
- Ensures 100% compliance on local legal regulations, which is critical for any financial institution but especially for one owned by the government.
- Reduced the payroll cycle by 65% (6 days to 2 days per month) while enabling the bank’s HR and finance team to focus on more strategic initiatives.
- Saved 35% in payroll specialist labor costs, factoring the number of employees and agencies as well as the compensation, benefits, visa costs to bring additional payroll specialists on board.
Since engaging HGS, the bank has increased in size and scope by approximately 10% without increasing HGS’ payroll resources. With mobile banking and the more global nature of transactions, technology is becoming increasingly important. The HGS-client relationship is thriving and evolving, and the client is considering HGS’ HR analytics solution to provide greater insights. The client organization continues to grow and change, and HGS flexes and adapts to ensure efficiency and manage risk while the bank works to stay competitive.