At The Crossroads Of Time
Charlie Regan Jr., president of Gorrie-Regan And Associates, Inc., says customers are asking for more from time and attendance VARs these days. That's why he says adding payroll processing services to his company's offerings is "as natural as a duck in water."
Charlie Regan Jr., the 35-year-old president of Gorrie-Regan And Associates, Inc. (GRA) (Birmingham, AL), is a no-frills, cut-to-the-chase kind of guy. Whether talking about his love of all things motorized ("I'm an equal opportunity motor head") or his company's ratio of software support personnel to customers ("You'll never have to call '1-800-hold'"), he tells it like it is. And when it comes to his knowledge of time and attendance equipment, he can really tell it like it is. After all, his family's time clock company was founded in 1959 and he's been working there (in some manner) since he was 16. As a result of this upbringing, Regan claims, without arrogance, he knows "most people in the United States worth knowing in the time and attendance business and the parking and access business" (see sidebar on page 54). He simply states that through a lifetime of travels and networking with industry associates, he has come in contact with many of the players in the marketplace. In fact, he doesn't even refer to them as competitors; he calls them friends. Despite this level of camaraderie, in 1998 many of GRA's nationwide "friends" thought the company's new payroll processing direction was crazy.
Combine Payroll Processing With Time And Attendance
With 11,000 customers, 48 employees, and 43 years of experience, GRA is well-known in the time and attendance industry. So, when Regan announced in 1998 that the company was going to start offering payroll processing services, many in the industry were skeptical. "To us, adding payroll services to our time and attendance offerings was as natural as a duck in water," he said. "But, to many people in the industry, payroll processing was like a vampire, and they were holding up their crucifix to it. They were screaming, 'what do time and attendance VARs know about payroll processing?'" However, GRA's customers - and probably many of the company's competitors' customers - were screaming the opposite. GRA just chose to do something about the screaming.
In most cases, the person dealing with GRA for a time and attendance system is also in charge of payroll. Many of these customers have contracts with national payroll processing companies such as ADP (Automatic Data Processing, Inc.), Paychex, and Ceridian. As Regan puts it, these customers "view payroll and time and attendance through the same lens." Thus, over the years, GRA had many encounters where a customer would angrily wag a finger asking why the company couldn't provide payroll services, too. In other words, customers wanted a one-stop shop. After asking many of GRA's customers what they were paying for payroll processing, Regan determined this was another service GRA could offer.
"The time and attendance industry is at a crossroads right now," Regan said. "Customers are asking you to do more, like payroll processing. And we have bet the farm on this trend."
Build A Payroll Department By Adding Servers, Staff, And Gray Hairs
However, GRA's skeptics did have a point: What did this time and attendance company know about performing payroll processing? To solve this problem, Regan knew he would either have to buy an existing payroll processing service bureau or start one from scratch. The latter choice was the path his company had always taken in the past when adding new products/services. So, it only seemed natural to pursue this option.
His first step was to find and hire the right people. "We know how vital it is to place the right personnel on our team. So, we started with CPPs (certified payroll professionals) who are nationally known and well-established in American Payroll Association (APA) circles." There are nine employees that make up the department. Next, Regan made what he termed a "significant investment in Dell servers" dedicated to payroll data. "We now have servers (which are all being used) out the ying-yang," he quipped.
Customers send payroll data to GRA via methods which require manual data entry (e.g. phone, fax, e-mail) or that dump data directly into GRA's payroll software. The method of data entry depends upon the type of time and attendance solution being used (see sidebar on this page). Electronic data comes directly from interfaces with a customer's time and attendance system. GRA performs all of the software integration and hardware installation work needed for all of its time and attendance systems.
"Don't get me wrong, adding payroll processing has been tough; it has given me gray hairs! After all, this is one of the most profound changes this industry has ever seen, but I say bring it on."
You Already Have The Customers You Need
According to Regan, if GRA signs up 10% of its existing customers, the company will be Alabama's largest payroll provider (in terms of number of customers). However, despite presently providing payroll services in 37 states, only approximately 100 of GRA's customers use this service. In fact, Regan hasn't even informed many of his customers that this service is available. Why? "My analogy for not actively spreading the word is this: what is the dog going to do if he finally catches the car?" he explained. "In our case, what happens if all of our customers called at once?" That's why Regan is gradually introducing this service. His plan is to resell this service to other VARs who can then offer it to their existing customers. "These are the same friends that watched us jump into the payroll business and thought we were crazy. Now, they're calling us 'visionaries'," he laughed. "It's amazing how we're not seen as idiots anymore."
Can A VAR Become A Benefits Administrator?
With four years of payroll processing experience under his company's belt, Regan is thinking about adding more services to GRA's repertoire. Namely, he wants it to become a total benefits provider, offering payroll-related products such as workers' compensation/health insurance and pension plans. As usual, when asked about the complexities involved with adding such services, Regan isn't shy in admitting this would be a big step. Yet, he's adamant that adding these benefit products would be a natural fit in his quest of creating a one-stop shop. "I know saying you want to focus on selling or creating a total solution sounds hokey, but that really is our ultimate vision for this company," he replied. "Outsourcing is more than a trend; it's becoming a way of life." But in the time and attendance industry, by adding new services such as payroll processing and benefits administration, a VAR or integrator is truly swimming upstream. The question is, are you ready to dive in?