Rice County Ditches ADP, Taps Paycom for Payroll Services

For nearly a decade, Rice County employees have relied on two separate software systems -- and plenty of manual work behind the scenes -- to process payroll, track benefits and hire new employees.

County officials say that system has become increasingly difficult to manage.

"It was really pieced together 10 years ago for what we needed 10 years ago," Human Resources Director Kari Viskocil told commissioners during a July 7 presentation. "Just with the changes, and again contracts, nuances to schedules, it has become so broken that that's why everything has turned into a manual piece, and we're tracking things via spreadsheets."

Following that discussion, the Rice County Board approved a new human resources information and payroll system during its July 14 meeting, authorizing the county to transition from ADP and NeoGov to Paycom.

Rice County has used ADP for employee payroll, benefits and timekeeping since 2016, while NeoGov has handled job postings and applicant tracking. According to county staff, payroll, tax and benefits reporting have become increasingly complex due to changing state and federal requirements, updates to union contracts and department-specific reporting needs.

During the July 7 meeting, Viskocil introduced Caroline McCrady, executive sales representative for Paycom, who presented the company's human resources information and payroll system and answered commissioners' questions about its capabilities, implementation and cost.

McCrady said the Human Resources Department evaluated ADP's capabilities before researching other software systems used by Minnesota counties, including UKG, Workday and Paycom.

"We have had to fully vet ADP's capabilities to meet all needs and requirements of Rice County," she said. "If we were to move forward with ADP, we would incur a significant increase in cost to those services to get the program where we needed to be."

After comparing costs, staff time and functionality, the department recommended Paycom because it combines payroll, benefits, timekeeping and applicant tracking into one system.

McCrady said Paycom has expanded its presence across Minnesota, partnering with multiple counties over the past year.

"In the last year, we've actually partnered with seven counties across the state of Minnesota, and I think we're up to 10 county partnerships today," she said.

McCrady said the company's goal is to help counties reduce administrative work while allowing human resources staff to focus on employees rather than paperwork.

"We're looking to create sustainable infrastructure without adding FTE and free up HR time for transactional tasks to transformational changes," she said.

Assistant Administrator Sandy Malecha described the county's current HR system as fragmented.

"We are using kind of a hodgepodge of a couple different systems to take care of all of our HR needs," she said.

Viskocil said one example is the hiring process.

"Our applicant tracking is done through NeoGov, and so when we hire new employees, we are manually entering all of that information into ADP -- that leaves room for error," she said.

County staff estimated payroll processing currently requires nearly 36 hours each week across three employees, while another 27 hours are spent reconciling employee benefits. Much of that work involves manually calculating retroactive pay adjustments, benefit changes and other payroll tasks.

Officials said the new system would automate many of those functions while giving employees access to mobile tools for payroll, benefits, timecards and tax documents.

McCrady told commissioners the county currently spends just under $99,000 annually on ADP and NeoGov.

"Overall adding that together, that's where we got the cash positive project of about $26,000 annually," she said, referring to projected efficiency gains and staff time savings.

The proposed agreement includes a three-year contract costing approximately $150,000 annually, plus a one-time implementation fee of $16,000. McCrady said annual increases would be capped after the initial contract period.

Implementation would begin immediately if approved, with the goal of launching the new system by Oct. 1.

"We'll actually come on site with you and process that first payroll," McCrady said. "If we need to come on site (to) process the second payroll with you, then that's something that we provide resources for."

Viskocil said expanding ADP to provide comparable functionality would cost approximately $219,000 annually, making Paycom the more cost-effective option.

One question that came up during the meeting is whether the added efficiency would lead to staffing reductions.

"The goal isn't to lose any FTEs once we transition to the new system," Viskocil said. "The goal would be to focus in on the development of our staff."

Viskocil added that when looking at turnover in Rice County within the first two years of employment, it's a pretty high percentage -- close to 10%.

"What we can do in HR to help ensure employees are trained," she said. "We have a lot of supervisors that go into positions from employee roles, and so what does that transition look like? How can we help develop them to be successful in their roles?"

Chief Financial Officer Peggy Schaak said the proposal is viewed as an investment in both efficiency and accuracy.

"Whenever we're doing manual processes, manual calculations, there's so much room for error," she said. "If you have a system that has rules set up, it can validate against those rules, it can validate against the union contracts. You're going to be paying employees much more accurately."

Following the July 7 presentation, commissioners unanimously approved the Paycom agreement during their July 14 meeting, allowing county staff to begin implementation with a target launch date of Oct. 1.