Payroll is one of the most common business functions outsourced today. The complexity of this function and the added fact that it must be legally accurate in terms of calculations make it a resource-intensive business function to manage in-house. Now in this post-pandemic world, with borders diminishing virtually and remote working almost becoming a standard for most open positions, compliance and administrative operations have become even more complex and challenging to manage.
Source: Google Trends
This is why we saw an all-time high search volume for the keyword “payroll outsourcing” on Google during the pandemic. This unfortunate global event forced businesses to cut costs and survive by looking for other alternatives in every direction, not just payroll. As a result, today, smart businesses have a tried and tested method at their disposal that they know works – outsourcing.
In this blog, we will look at the different caveats of payroll outsourcing services and give you, the managers and business owners, tips on how to look for the right thing at the right place before you make any concrete decisions.
- DECISION: The first step to start your research journey is to self-audit your business. The most important reason for you to do this is to get a clear understanding of which business functions you can run in-house vs. which are the ones that need to be outsourced. Each function must be carefully assessed in order to come to a conclusion. If your list contains payroll as a business function that needs to be outsourced, you may dive deeper by deciding which of the following payroll sub-functions you want to keep and which ones need outsourcing.
- Payments processing
- Payroll taxation
- Data storage & security
- Employee accessibility portal development and maintenance
- Compliance management
- Legal support
Find a payroll outsourcing provider that offers expertise in all these payroll functions, even if you might not want to avail all the services initially. In our experience, most businesses that start with a few services end up outsourcing all their payroll sub-functions to us.
Also Read: 4 Future Trends in Payroll Technology and Outsourcing That Your Business Needs to Lookout For
- EXECUTIVE SUPPORT: There’s a common saying in the world of investing, “Things that have never happened before, happen all the time.” The Fukushima Daiichi Nuclear Power Plant in Japan was built by some of the brightest engineers on the planet in the late 1960s. They studied the strongest ever earthquakes recorded by humans and built the plant to withstand the peak of the strongest one ever recorded. But when the unforeseen 9.1Mw earthquake hit the Pacific on 11th March 2011, the reactor crumbled within a few minutes. In other words, one must always be prepared for that one unforeseen event that surprises even the smartest and most experienced players in the industry.
When it comes to choosing a payroll partner, it is vital you choose one with the best customer support, more preferably the one which provides executive support. The simple reason is, anything can go wrong at any time – servers may go down at the worst times, online portals may stop responding, data might get misplaced or misrepresented, or deductions may be calculated incorrectly. All of such events affect your employees adversely, which is exactly why you, as a business owner or manager, must have a direct, open line between you and your payroll partner to get these unforeseen situations under control as soon as possible.
- ACCESSIBILITY: While some of the payroll providers you may choose might have good clientele and may get the job done correctly if their interface is below par, then having accomplished everything does not matter. Imagine a large dam at the top of a mountain that has the capacity to store hundreds of millions of liters of water all year round. At the foot of that mountain, there are several small towns and settlements that are suffering from a drought. If there is no mechanism in place to direct that water safely and efficiently to these towns and settlements on a regular basis, the water at the top is virtually useless. Similarly, if there is no safe, efficient, and well-designed interface between you and your partner, the whole operation falls apart.
While in the scouting stage, ask multiple payroll providers to give a detailed demo of how data can be accessed and managed by your employees and management on their systems and portals. It must be easy to use and must give maximum control to the user because the more your employees can self-manage their data in the portal, the fewer CRUD requests HR will receive – a good way to minimize the workload for your human resource team.
- FURTHER ENHANCEMENTS: Speaking of human resources, you must always be on the lookout for further enhancements – golden opportunities to minimize overhead costs without negatively affecting your existing workforce. Once you settle down on that one payroll service provider that ticks all the right boxes, you must quickly identify what other related professional services they might offer. For example, some payroll processing providers like Exela HR Solutions offer their expertise in areas of recruitment, corporate training, compensation and benefits, HRBP services, etc. A full suite of HR services offered by a single, reliable provider opens up multiple opportunities for your business to offload resource-intensive workload, which frees up existing resources that can be utilized to scale the business up significantly.
“Do what you do best, outsource the rest”
CONCLUSION: Not every business needs payroll outsourcing services. Businesses that are comfortable with payroll specialists operating in-house who are getting the job done year-in-year-out may not need outsourcing. However, businesses that are struggling or businesses that are new startups should absolutely consider outsourcing as a great way to leverage manpower towards achieving higher targets quickly and efficiently. Now that you know the main factors to look out for before choosing your payroll partner, you will be well-informed in the discussions you have with your potential payroll partners.
Exela HR Solutions is a world leader in offering end-to-end HR outsourcing services, right from recruitment and global payroll processing to HRBP services and L&D corporate training. We serve clients who are active in multiple industries across the globe. Exela serves a growing roster of more than 4,000 customers throughout 50 countries, including over 60% of the Fortune® 100. With foundational technologies spanning information management, workflow automation, and integrated communications, Exela’s software and services include multi-industry department solution suites addressing finance & accounting, human capital management, and legal management, as well as industry-specific solutions for banking, healthcare, insurance, and public sectors.
Speak with us today if you need help with payroll or any other HR-related function of your business.
Sources: google.com | en.wikipedia.org | reddit.com | groupmgmt.com | businesspartnermagazine.com
DISCLAIMER: The information on this site is for general information purposes only and is not intended to serve as legal advice. Laws governing the subject matter may change quickly, and Exela cannot guarantee that all the information on this site is current or correct. Should you have specific legal questions about any of the information on this site, you should consult with a licensed attorney in your area.