Ecount News
Stein Mart Delivers Pay 100% Electronically to 17,000 Employees
Payroll Manager's Report
In years gone by, events beyond Stein Mart's control interfered with its ability to get paychecks into the hands of its 17,000 employees. One year it was air traffic congestion due to 9/11; another year a snowstorm hit Louisville and crippled FedEx's hub there; then there were the frequent hurricanes in Florida, where the store is headquartered.
Yet, when Katrina, Rita, Wilma, et al. hit the Gulf Coast this year, affecting nearly 20 of its stores-four were closed in New Orleans, one each in Biloxi and Hattiesburg, Mississippi, and one in Mobile, Alabama-the department/specialty off-price retailer was more than ready: Just four months before Katrina hit, Stein Mart had successfully implemented a payroll program to deliver employee wages by paycards.
D. Hunt Hawkins, senior vice president, human resources, told PMR: "The drive toward paycards was propelled by a desire to find a fail-safe way to deliver payroll." But there was still another hurdle to leap: With employees in nearly 260 stores spread over 30 states, Stein Mart also needed a solution that would be compliant with all state wage and hour laws.
Enter the Ecount 100% Payroll Solution (corp.ecount.com; 877-ECOUNT-1), which, in addition to providing 100% compliance with applicable wage and hour laws, yields a 100% paperless result. "We did not want to be part paper and part paperless," says Hawkins. With this transition to paycards, Stein Mart expects to enjoy cost savings of $80,000 to $100,000 annually.
A profile of Stein Mart's payroll operations. Stein Mart employs 17,000 workers; approximately 14,000 are FTEs and 2,500 are exempt employees. The payroll department includes a payroll manager and three payroll associates. (Note: After the successful implementation of paycards, one of these payroll associates moved to the compensation and benefits side.)
The company has four payroll cycles:
- Weekly paid (nonexempt) in its stores
- Weekly paid (nonexempt) in its corporate offices
- Semi-monthly paid (exempt)
- Monthly paid (exempt)
Prior to Ecount, payroll was processed entirely in-house. Subsequently, the company has outsourced several functions including garnishment. For timekeeping the company uses Kronos, and for payroll processing, Infinium, after which files are uploaded to Ecount.
The paycard vendor selection process. Fortuitously, while Stein Mart was considering its options to deliver payroll come hail or high water, Ecount approached them. Other well-known industry vendors completed RFPs, as well. Three were invited to make a presentation to Hawkins, the payroll manager, and the compensation and benefits manager.
According to Hawkins, the final decision was based on Ecount's ability to be 100% compliant with the laws in states where it paid employees. Plus, the Ecount solution resulted in a 100% paperless environment - no more paper, toners, or printers. "The decision was made on April 2005 [to implement paycards] and on July 1, 2005, we were live with paycards."
The Ecount 100% Payroll Solution provides electronic pay destinations for all employees who do not have bank accounts or would like an additional account. This enables Stein Mart to electronically deposit funds to 100% of its employee base, while providing the requisite access to funds for employees through the Ecount Paycard, which is a reloadable, prepaid Visa® card that comes with Visa's "zero liability" protection. The paycards also can be used to make purchases at Visa locations and to withdraw cash at any Plus® ATM.
"One of our key issues was making sure our employees had immediate access to their pay, whether they are scheduled to work on payday or not, or even in the event of a natural disaster which impacts the store where they receive their checks." Getting employees to accept pay electronically. Prior to paycards, only 40% of Stein Mart's employees were on direct deposit. Now all pay is delivered 100% electronically: either by paycards or direct deposit. According to Hawkins, the paycard solution was one of the largest pay/benefits programs implemented at Stein Mart "and the execution and adoption has been very smooth. Employee resistance was zero." He attributes this to the great communications job done by Personal Communications Incorporated (PCI), an Atlanta-based company that provides personalized communications support to companies in return for the opportunity to provide voluntary benefits to the organization's associate population.
"We worked closely with PCI to script the message we wanted communicated to our associates," says Hawkins. "They used a multimedia presentation stored on a laptop computer to deliver this message to as many of our associates in a one-on-one environment as possible." Over an eight- to 10-week period, PCI successfully reached more than 75% of Stein Mart's workforce. PCI representatives went to each store where they spent two to four days meeting individually with as many associates as were available. In most cases, this resulted in 30 to 50 individual meetings and presentations per store.
The program was called Payroll Choices 2005. Options were explained to the associates, and authorization forms were distributed and collected by PCI. "[They were] a tremendous help in getting associates' buy in," Hawkins said. The PCI representative would first spend 20 to 25 minutes showing associates the prepared multimedia message and then field any questions. Hawkins is among a number of Stein Mart employees who receive their pay through paycard and direct deposit. "I wanted the experience of knowing what our associates were experiencing with paycards."
Delivering pay stubs electronically too. Additionally, the Ecount 100% Payroll Solution provides electronic pay stub delivery to the entire employee base, eliminating any need for paper stubs. Here's how Hawkins says that works: Associates may access their pay stubs through the Ecount Web site. From there they can view, print, or save an electronic copy of each paystub. Generally, the stub is available the night before the payroll is due to the associate.
Associates may also access their pay stub information via an intelligent voice recognition system. They call a toll-free number and may receive information detailing their pay stub or can request that the system fax them a copy. Ecount eStubs provide all relevant payment information, including base and additional wage amounts, tax and personal deductions, and other company information. Employees can access past statements or replace lost statements.
Tangible and intangible benefits accrue with 100% electronic delivery of pay and paystubs. Hawkins told PMR: "We have reduced our processing expense by approximately $80,000 to $100,000 per year by not having to purchase check stock or toner, or to lease and maintain the three high speed printers used previously to print deposit advice and checks.
"We were also able to redeploy one fulltime associate from payroll to benefits and have reduced the time required for working the escheatment and reconciliation files." Plus: Since going to paycards, Hawkins says the company's weekly UPS bill has decreased because the pouches no longer include associates check packets.
"The primary benefit [of paycards] is the comfort in knowing that all of our associates receive their pay on time every payday. No more delays caused by weather, terrorism, or other factors beyond our control." He observes that several organizations with operations in the areas ravaged by Rita and Katrina had and continue to face difficulty in paying their associates. "Fortunately, we did not have that worry. We were freed up to focus our attention on other concerns our associates had in the wake of those storms."
Hawkins admits to "some initial trepidation" about implementing the paycard solution, but "it went through very smoothly and we have not had any serious calls or complaints. We are confident that we can get payroll to employees come hail or high water."