Ghost Employees Hiding in Plain Sight Discovered on TeamNest

Background

Our client is a leading player in the Transport and Logistics sector based in India and a prominent name in the Payment Services industry. They employ a large and diverse blue-collar workforce across India, using a host of sub-contracted vendors. 

This workforce is critical for the company's day-to-day business operations, focused on relocation, data storage, warehousing, facility management, and cloud services. 

Thus, Onboarding, Payroll Processing, and Offboarding are essential in efficiently managing this workforce.

Pain Points

Originally, the company relied on each vendor to provide the details (data) of the workers employed ie. Attendance, New Joiners, Exiting Staff. With these inputs, the payroll was processed offline, by each vendor, using Excel worksheets. 

Had the workforce and vendors been minimal, the Finance team could have managed it accurately offline. However, our client uses the services of 15 vendors, each of whom employs thousands of workers based on the requirements of various business lines and locations. 

Given the scale of operations, the offline, vendor-based approach was chaotic and inefficient. And raised several red flags to the Finance Team for action and resolution.

Solution

The CFO sought a common platform for Vendor Management to streamline Payroll Processing and Invoice Processing, which is when they engaged our services.

They migrated some crucial processes - Attendance, Leave Applications, and Payroll Processing - for their subcontracted workforce onto TeamNest’s cloud platform. 

• As part of the solution, the client was interested in implementing an employee validation process that verifies the mobile number and email id of every onboarded employee. 
• The client also required the TeamNest Attendance module integrated with their current Biometric Network, along with an option that allowed the use of the Mobile Punch system to geolocate employees.  
• Another piece the client needed was a feature-rich Invoicing platform that auto-generates vendor bills by extracting Attendance and Payroll data.

TeamNest was able to successfully provide and seamlessly integrate all the above requirements.

Results

After the account went live on TeamNest, within a short period, the client noticed some glaring exceptions. 

Revelation of Ghost Employees

The Attendance of several employees was not traceable. Due to lack of data and unverified details (mobile number/email id), the vendor bills could not be generated on TeamNest. When the Finance team checked these exceptions, they realized that in the past, payments had been made to these unverified employees. 

Further investigation revealed that vendors had falsified records by adding fictitious data to employee lists submitted to our client for billing. This fraud went undetected while the payroll was offline, with a wage record being created and supported by fabricated time sheets and other records.

TeamNest helped migrate the processes online with automated validations that assisted the Finance team carry out Forensic Accounting revealing ghost employees who had no room to hide. The deception was detected before the trail went cold.

This resulted in a 7%-8% savings on the client’s annual billing of Rs.100 crore, which was significant. 

What began as a company initiative to centralize Workforce Management evolved into a startling revelation of ghost/phantom employees hiding in plain sight. 

Assessment of Workforce Productivity

Another important aspect of this exercise was the tracking on the TeamNest dashboard of the Workforce Productivity. Since the client's Biometric System was synced with the TeamNest Attendance module, data on Punch-in and Punch-out with geolocation, Hours worked, Absenteeism, etc. was easily generated and the exceptions were highlighted. 

These metrics helped the client assess productivity and question vendors on reduced working hours of certain departments. And also keep tabs on excess hours billed.

Impact

Several issues arose when processes like Attendance Tracking, Leave Management, and Payroll Management were unified on the TeamNest platform.

• TeamNest helped increase operational efficiency with precise and timely Payroll Processing
• It also enabled greater control and visibility of Vendor Management
• Adopting HR digitization with TeamNest helped boost Workforce Management efficiencies for the client

Next Steps

The client is convinced of TeamNest’s value addition to their Workforce Management and wants to invest in implementing our Expense module for their 20,000+ employees. 

This step will ensure all out-of-pocket expenses are integrated and all vendor charges are centrally logged with appropriate supporting documentation and audit trails before payouts.