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Tips and Tricks for Tracking Labor Costs in the Public Sector

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Today, GovLoop is hosting its Second Annual State and Local Government Innovators Virtual Summit, an all-day, virtual event with six different online trainings, networking opportunities and resources to help state and local govies do their job better. You can register here and be sure to read the other recaps here.

State and local governments need to identify, predict, and manage opportunities for cost savings and productivity gains — all while improving the quality of their products and services. But how can they achieve productivity gains, and stay within budget, when they lack business intelligence related to their workforce?

One way is working to gain real-time visibility into workforce issues and effectively planning future workforce needs to control labor costs. How to best do this, and how to address Fair Labor Standards Act (FLSA) compliance risks, were the topic of one of the sessions, Tips and Tricks for Tracking Labor Costs in the Public Sector, at GovLoop’s recent virtual training summit.

Panelists included Janet Wempler, State Timekeeping System Administrator, State of Ohio, and Donald Pagel, VP, Public Sector Professional Services, Kronos, a global workforce management solutions company. You can watch the on-demand sessions here.

Both Wempler and Pagel noted that there’s a lot of pressure on state and local governments to preserve budget dollars while ensuring the continuity of services for constituents. With the largest portion of state and local government operational budgets being workforce expenditures, this is a logical place to start looking for efficiencies.

But labor costs, laws and productivity in the workforce are complex. It can be difficult to accurately track employee work and leave time, or understand and conform to labor laws like the Fair Labor Standards Act especially when done on paper or spreadsheets.

One solution? Automation. Automating your labor efforts can help reduce costs, improve efficiencies, increase productivity, and make your government more transparent.

Wempler spoke in detail about what best practices the state of Ohio used in order to execute on their workforce management solutions and automation. The state of Ohio, Wempler said, was looking for a timekeeping solution “that identifies product features that will enable our current processes, policies and bargaining unit agreements consistently across the State.”

According to her and her experience in timekeeping in Ohio, there are four main components one must follow and execute on to make sure workforce management is successful and that you are finding the right timekeeping and workforce assessment solution:

1. Define the System Foundations: This means reviewing the foundational elements and set a baseline for ongoing review of your system.

2. Analyze Your Current Process. This means coming up with a sample process, reviewing that process against your existing process, identifying the major differences and the areas for improvement.

3. Map the Solution. Here, you want to identify product features to improve your process; review your detailed policies; define configurable elements of the product; then playback the new process and ID any gaps.

4. Discuss Access and Integration. You’ll want to talk about the solution suite integration and touch points as well as importing and exporting and user access to the system.

Wempler also said that focusing on standardization, accountability, consistency, audit trail, and streamlined integration are important in any workforce management tool you’re considering implementing.

“Standardization is critical when government employees are submitting labor data in different ways (paper v. electronically),” she noted. “And consistency is absolutely critical when you’re creating pay rules for employees. Audit trails are also important for managers when building authorization processes for time-off requests.”

Next, Don Pagel of Krono spoke about understanding compliance risk when it comes to tracking labor in the public sector.

Without the right workforce management tools, you don’t have the information or visibility to foresee that your organization could be at risk for unnecessary litigation and subsequent financial challenges, Pagel pointed out. He shared some sobering statistics that backed up that claim:

  • An estimated 70 percent of employers are out of compliance with FLSA, according to the DOL.
  • $1.4 billion in back wages has been recovered since 2001 by the Department of Labor’s (DOL) Wage and Hour Division on behalf of more than two million employees.
  • More than $252 million was paid out in 2008 for the 10 largest class action wage and hour settlements.
  • The DOL Wage and Hour Division received an 18% increase in budget for fiscal 2010.

By automating labor costs, your government will reduce the cost of operating the workplace, improve efficiencies within your government, increase productivity through better tracking, and make your government more transparent — as well as save you from any FSLA compliance issues you may not be aware of that could harm your department. Diving into the complex area of labor costs is a wise choice for any government managing a tight budget.

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