A Practical Guide to Carve-outs: Time & Attendance (part 1 of 2)

When separating two companies during a carve-out, it is essential to focus on any system or process changes that will impact your employees.  Most employees would agree that payroll changes are the most important – they want to make sure they get paid; however, time and attendance (T&A) follows right on payroll’s heels. The two systems are tightly linked because the T&A system is generally integrated with the payroll system – the hours earned by employees via the T&A system will flow into payroll in order to pay the employees. The T&A activities are often ingrained in employees’ everyday routines and the implementation of a new system can be disruptive if incorrectly handled. This post will detail the important T&A steps to remember during a carve out, including system selection, future state processes, implementation and rollout.

The first part of this two-part blog will cover Strategy (Select System & Identify Stakeholders) and Understand (One-Time Data Needs). 

Select System & Identify Stakeholders

The first major steps of the T&A implementation are to select a service provider, identify the business stakeholders, and choose a core team to support the implementation process. Depending on business fit/requirements, consider using the same T&A provider as the parent company – this can ease the transition process. Functional requirements to consider during selection include time clocking methods required, the need for an employee portal, and timecard approval processes. Spend time up front looking at opportunities for process improvement rather than simply mimicking the systems/processes that the parent company had in place. Correcting any issues will be more difficult the longer you wait.

Understand One Time Data Needs

Typically, the new company will simply adopt the existing policies and procedures from the existing parent company, then spend the next year tailoring the policies to the needs of the newly formed business. So, it’s important to gather all of the data you will need throughout the life of the implementation from the existing parent company upfront – this information includes the clocking methods, employee locations, rules (overtime, paid time off (PTO), and premium time), schedules (lunch, time, and holiday), and time approval procedures. The parent company will also need to provide the PTO accrual balances and, in some cases, produce a file of the employee’s clocked hours to import into the payroll system until the new T&A system is up and running. Depending on the parent company’s systems, these two tasks can be tricky – so be sure to have a plan for how to obtain these things before you start the implementation.

Stay tuned for part 2 of 2 – Implementation and Rollout!

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