Workday typically follows a semi-annual release schedule, with updates rolling out approximately twice a year. The spring update was released on the first weekend of March. The release introduced new features, enhancements, and fixes to the Workday platform to improve user experience, functionality, and overall performance.

These updates are important for Workday customers as they ensure that their systems remain up to date with the latest features and improvements, helping them to stay competitive and efficient in their operations. In this article, we specifically review the new Payroll and Compensation updates introduced by the Workday 2024 R1.

Payroll

Prior Period Tax Adjustments

Prior Period Tax Adjustment Calculator to reduce manual effort. PPTA is accessible through the related action icon of an original completed pay result.

• Select Prior Period Tax Adjustment > Run

PPTA Calculator streamlines the process for retro tax authority adjustments. If multiple pay results need to be adjusted, always start with the earliest completed period first.

PPTA can be used anytime users are retroactively adding, changing, or deleting the following for an employee:

• Primary home or work state
• Tax elections for work or home city
• Local other authority
• County local taxes
• Home school district
• Domicile state

The new Prior Period Tax Adjustment (PPTA) calculator will help to calculate tax and wage differences effortlessly due to retro tax authority changes in completed periods. This provides greater efficiency when adjustment for wages or taxes is needed due to retroactive tax authority changes.

Payroll Insights

Real-time smart tool for reviewing payroll results. It has multi-faceted filtering capabilities:

• Once a pay calculation has been run, the Payroll Insights report will pull predictive pay data.
• Allows easier review of historical payroll results to identify what are true abnormalities and what is not.
• Feedback can then be provided on predicted results to improve accuracy over time.

New Tasks:

• Maintain Payroll Insights Configurations
• Maintain Payroll Insights Custom Tags

New Reports:

• Payroll Insights Results Report
• Historical Payroll Insights Results Report

Payroll Insights provides a real-time prediction and evaluation tool to analyze payroll results based on historical payroll result patterns. This feature helps to reduce the amount of time and effort spent manually reviewing and identifying payroll exceptions.

Payroll Third-Party Payments

Generate and Settle Payments for Deduction Recipients of IWO and Court Orders. Workday can now process payments for IWO and Court Orders:

• When a pay calc is run, Workday generates a payable item for the deduction recipient’s line result.
• A new tab is produced on the pay result “Payroll Third-Party Payments.”
• After payroll is completed, the payable will be available to pull into Settlement Run using the new filter “Payroll Third-Party Payments.”
• Payments can be processed electronically via integration or through the print check feature.

Utilizing the normal payroll processing and settlement methods, Workday can now identify, process, and produce payments to deduction recipients. Previously, customers were required to handle these payments manually outside of the payroll process or rely on third-party vendors to complete them. Customers can now produce these payments internally with Check Printing or utilize their existing bank integrations. This feature is a time and cost-saver for clients currently managing the maintenance of their IWOs.  

Compensation

Workday Docs for Compensation Statement Layouts. With Workday Docs, users can now create a custom Compensation Review Statement layout within Workday:

• Workday Docs for Layouts is a visual editing tool for designing, creating, and previewing document layouts for use with custom advanced reports in Workday.
• Users can insert data fields and even apply condition rules to any piece of the layout.

As one of the more highly anticipated updates, users can now completely customize the compensation review statements without the need for any outside reporting tools.  Once created, users will be able to make updates to the compensation review statements more easily year over year.

Total Rewards Statement Redesign

Design for Increased Customization. Redesigned Layout:

• Users can now configure section groups that will display on the statement as cards. 
• Each section group can include lists, tables, and calculated values.
• Users can arrange the cards on the statement in any order they like.

The updated design of Total Rewards Statements will allow users to customize how they show employees their compensation. This will allow employees to understand their compensation more easily and how it is broken into different components.

Percent-Based Calculated Plans

Manage Complex Percent-Based Compensation Plans. Target Percentage or Ceiling Amount:

• Manage complex percent-based compensation plans to configure and report on a target percentage and a ceiling amount for amount-based calculated plans and process them in Payroll.

Calculated plans can now be included in salary-dependent Primary Compensation basis calculations for workers managed by Basis Total. New display text for Calculated Plans with ceiling calculations or percentage calculations.

Dynamic Plan Type Display

Dynamic Compensation Transactions. Propose Compensation Change:

• Workday 2024R1 makes it easier to assign employees compensation during the Propose Compensation Change process by displaying only the relevant plan types for the employee.

By only seeing what is relevant to a specific employee when processing a Change Job or staffing transaction, the processor can decrease manual error while condensing what it sees and maximizing efficiency.

Grid Profiles for Compensation Review

Grid Configuration Profiles. Grid Profiles & Conditional Calculations:

• There is increased flexibility of grid configurations in compensation reviews. Users can now configure multiple grid configurations for the same compensation review process.

Flexibility within the Compensation Review Grid Configuration allows Planners to view fields that are more relevant to the participants in the process.

Conclusion 

The Workday release will have a major impact on your current Workday environment, and new features will enable better user adoption for your team. It is critical that your team thoroughly researches and tests the new updates in your Preview environment.

Getting the most out of these features will require a thorough understanding of what you are trying to get out of Workday and how Workday will work within your organization. With FinServ, you have a trusted advisor with experience in both Workday and the industry to help you make informed decisions about what functionality to leverage, ensuring that you make the most out of your Workday investment. FinServ has advised both Workday HCM and Financial clients through Major Semiannual releases. In addition to release consultations, FinServ Consulting offers operational assessments and Workday implementations. FinServ has experienced HR and Finance consultants who have worked with clients on vendor selections and implementations of various HR and Finance platforms. 

Large healthcare companies can have hundreds of business locations and thousands of departments across these offices, housing thousands more employees. Large occupancy and physician compensation costs must be carefully budgeted and tracked for strategic planning; however, the FP&A data collection process for these line items can be particularly onerous, often using outdated systems and Excel manipulations.

The implementation of business intelligence tools with existing Enterprise Resource Planning (ERP) systems makes data collection more efficient and timelier, leading to improved reporting and decision-making.

Implementing Business Intelligence Tools

FinServ’s client, a large and rapidly growing healthcare organization, recently implemented a SAAS Facilities Management software for more efficient space utilization and planning to enable the client to track moves/adds and changes to departmental space at every location. Prior to the implementation, the departmental space usage was tracked in an Excel file, so the data quickly became stale as departments changed locations or moved from one floor in a building to another. Since occupancy costs are budgeted and allocated to each department based on square footage, the stale square footage numbers became meaningless with respect to budgeting and allocating actual occupancy costs to the respective departments.

The project was a significant undertaking. Floor plans for hundreds of locations had to be obtained and converted from PDF to CAD format, and the space on each floor required confirmation from the respective clinical managers in each department. The successful implementation allowed the company to update moves/adds/changes to the real estate portfolio on a timely basis, providing efficient data collection and reporting on departmental occupancy costs in the FP&A process. This allowed management to make more timely decisions on the use of space. The software also enables the organization to manage its vacant space and incorporate that information for the planning and budgeting for new providers.  Combining this information with operational statistics such as patient volumes allows management to forecast profitability by location and make decisions to expand or close locations based on that profitability. The company can now decide on the quality of staff at specific locations using clinical data on patient volumes and satisfaction to make staffing and compensation decisions.

Overhauling the Compensation Process

Our client’s physician compensation process was similarly complicated and outdated. The methodology of compensating physicians is also constantly changing. At one point, physicians were compensated on the P&L they generated, which forced physicians to spend time managing their costs, such as the number of clinical staff they required to support them. Physician compensation, or “Phy Comp” was also tracked and calculated in Excel, which was unsustainable for a rapidly growing company.

The implementation of Business Intelligence tools with the company ERP systems gave the company the transparency to work relative value units (“wRVU”), which are standard units of measurement used to establish values for health care procedures or codable direct patient care experiences. The transparency of this data enabled the company to move to a production-based compensation plan for physicians, which allows physicians to spend less time managing their costs and more time dedicated to patient care.

The company is also moving towards value-based-pay incentives as more data around the patient care experience has become available in the ERP systems. The company has also undertaken a project implementing a compensation system to automate salary and bonus calculations, documenting processes and controls for IPO readiness. All these project improvements will streamline the FP&A processes with respect to Phy Comp.

Forward-thinking healthcare companies are also adopting the Financial Services model of offshoring support functions of their ERP systems to low-cost locations like India. These cost-effective managed services offer excellent support to resolve issues through the client support ticketing process quickly.

Technological improvements to ERP systems result in improved transparency of clinical data from billing systems. This allows for a more granular process in using detailed data for financial analytics and forecasting and can significantly impact financial results when utilized effectively by management.

Conclusion

FinServ Consulting, LLC has technical expertise with respect to systems, data collection, and US GAAP accounting to add value to healthcare companies, including the FP&A and ERP domains. Our team is well-positioned to help ensure the success of your next project. If you would like a full picture of FinServ’s methodologies or capabilities in running a project for your healthcare organization, please contact FinServ Consulting at info@finservconsulting.com or call 646-603-3799.