Campus payroll errors can translate to big bucks … but automation can help

USD reportedly saved more than $700,000 in overtime payments.

Collecting and entering employee payroll information is a famously complex task in higher education. College payroll calculations are even more complicated—and fraught with error—when they’re done by hand.

And as colleges have faced lean budgets in recent years, officials have been focused on avoiding employee overpayment while campus departments are asked to cut back.

The University of San Diego (USD), a private campus with about 3,800 employees, reportedly saved about $1.5 million last year after campus administrators moved from a manual payroll system to an automated approach that removed human error from the process.

Automating payroll gave the university a more accurate reading of how much overtime employees were working, according to an independent analysis described in a report published by Kronos, a Massachusetts-based workforce management solutions company hired by USD.

USD saw its payroll error rates drop by 93 percent after automating the process, saving more than $700,000 in annual overtime payouts. USD employees, according to the Kronos report, “often overestimated the amount of overtime they worked.”

“I would say that the recession has done a lot to heighten sensitivity about this issue,” said Christine Carmichael, Kronos’s industry marketing director for the public sector.

Wasting money on payroll errors—especially when those mistakes are discovered by local newspapers—could cause PR damage for campuses during tough economic times. Colleges and universities “become hyper-press-sensitive” about overpayments to employees during down economies, Carmichael said.

Leaving payroll management to campus employees also could result in lawsuits if mistakes are made, Carmichael said. Campus workers who aren’t compensated for their overtime work could take the matter to court—another potential PR blow to colleges.