Icebreaker reduces costs by outsourcing payroll

As the New Zealand brand that pioneered outdoor merino wool apparel, Icebreaker has been evolving to become a multi-channel integrated business with 19 company-branded retail stores, over 4000 wholesale customers, direct eCommerce and over 400 employees worldwide.

Icebreaker's sales have tripled in the last six years with sales projected to exceed $200m in 2014, with 80 percent of these sales now in Europe and North America. The company is committed to a business model that doesn’t put profits ahead of the environment and is seeking to double sales within the next five years through global expansion across all channels.

The Challenge

About four years ago, Icebreaker was set up to operate as eight relatively independent country- based teams supported by a small global head office in Wellington, NZ and a design and online hub in Portland, Oregon, USA. The company was starting to contemplate regionalisation to gain operational efficiencies and enable greater investment in its direct-to consumer channels. The primary focus for the small Wellington-based global human resources team was a single minded one - to align and systemise paper-based and resource intensive human resources processes across the global network and create a platform for growth.

As an important part of this objective, they began to consider how best to outsource the processing of their New Zealand payrolls to reduce the error rates and costs. Their in-house small business payroll system solution was outdated with limited reporting. They wanted to leverage the benefits of online employee and manager self-service, including online leave management.

The Solution

Icebreaker chose to partner with Datacom and signed up to a managed service for their three fortnightly NZ payrolls, including two salary based payrolls and an hourly rate retail payroll. With a smooth transition to the Easipay solution and a positive response from the team, it was a straight forward and logical decision to bring their Australian payroll processing from a competitor to Datacom when Datacom expanded their EasiPay payroll offering a year or two on to cover all states in Australia.

This decision was also well timed with Icebreaker’s decision to regionalise finance for their New Zealand and Australian markets. The responsibility for coordinating the Australian payroll which had previously sat with the Australian Finance Manager was easily integrated into the responsibilities of the existing Global HR Payroll & Systems Coordinator located in Wellington.

This was definitely a case of the right timing; Datacom Payroll had a team of developers that were rapidly building the Australian legislative requirements into the existing DataPay and EasiPay products.

Icebreaker agreed to work with the timeline of Datacom Payroll and were one of five clients involved in the pilot phase of the project, which went live in July 2013.

Icebreaker has a dedicated Datacom consultant available to solve any issues that may come up for the global HR and Finance teams. Their employees and managers across both New Zealand and Australia are using the self-service portal to maintain their payroll information, manage their leave requests and share pay-slips and payment summaries. Part-timers are also submitting their hours through the system.

 

“It’s great dealing with a local company that can provide cost-effective payroll services for both our New Zealand and Australian teams in an easy-to-use system. Our managers, with people in both countries, also really appreciate having only one system to learn and I’m particularly grateful for our consultant’s dedication to helping us navigate the complexities of both the New Zealand and Australian payroll environments.”

Emma Ludvigsen – Global Head of HR Service, Icebreaker

Results

With the decision to outsource its payrolls to Datacom, Icebreaker are now benefiting from the single point of contact and the same software solution for both their New Zealand and Australian payrolls and managers working across both geographies are grateful for only having to learn and use one type of system.

They also report the following positive outcomes:

Better control of payroll with one person now spending about 10% of their week coordinating both the New Zealand and Australian payrolls

Cost saving as a result of the reduced workload for both the human resource and finance teams and online leave request approval process

Reduced error rates as a result of the file upload functionality as well as access to payroll expertise

Happier employees as they can now access their payroll information through the self-service portal at their own convenience (including payslips and leave balances)

Technologies delivered

Outsourced EasiPay payroll with employee and manager self-service

The Partnership

Datacom’s consultant worked closely with the Icebreaker team to understand the complex requirements that Icebreaker needed to comply with for retail staff, and to ensure the DataPay system was set up correctly to pay their team in accordance with the Australian Retail Award requirements.

Datacom’s relationship with Icebreaker was strengthened by the process of working together to achieve the desired goal – a centralised, pragmatic and hassle-free payroll solution.