These days, HR and payroll professionals are facing major challenges that affect payroll administration. Increased globalization, fierce competition, slow economic growth, the potential for automation, and an experienced yet aging workforce are a few. To ensure accurate and secure payroll management today and into the future, you should ask yourself three key questions:
- Where can my company find the right skills and resources to manage the payroll needs of our business at the same high level of quality we have now?
- How can we ensure that regulatory frameworks and requirements are correctly addressed, regardless of time and location?
- What efficiencies can we gain – and how – by automating part of our payroll administration with a payroll outsourcing provider?
Outsourcing creates opportunities to meet the challenges of the future
Thanks to a new, more complex environment, business requirements are shifting. Payroll professionals are expected to have extensive expertise and the ability to act quickly. Managing payroll administration professionally and flawlessly is a demanding job, for sure. Different statutory and regulatory payroll requirements, together with the interpretations of collective agreements and local agreements, require experience and specialist knowledge that needs to remain fresh.
Outsourcing your payroll administration to a trusted partner can provide significant benefits, both in the form of lower overall cost and a more efficient business that delivers better quality. Today, other factors also weigh in heavily in the decision, including planned retirements, lack of internal expertise, or the need to better control staff costs.
Select a partner with a long-term mindset and deliver quality based on your organization’s own needs
One of the main factors behind successful outsourcing is choosing the right payroll outsourcing provider. When you choose a long-term partner for payroll services, it is crucial to ensure that the provider can prove its ability to understand your business. Also important is the provider’s ability to develop and renew its own business for the long term.
The objective of outsourcing is to hand over routine processes that are not part of your company’s core business to an external partner who specializes in professionally managing and developing certain types of services. A partner who uses its expertise and established procedures to meet customer requirements for a cost-effective, customer-oriented service.
Some of the main benefits of payroll outsourcing are:
- The work is done systematically over time, irrespective of who does it.
- Tasks are performed by specialized teams.
- The tasks are highly automated.
- Payroll slips and documents are easily delivered online.
- The customer contact drives the collaboration.
A good payroll outsourcing provider also proactively assumes responsibility for adapting its services to meet new requirements that arise within your organization or as a result of changes in the business environment, changes in legislation and regulations, or the development of new administrative payroll processes or digital solutions.
6 measures of the quality of your payroll service provider
As you start to consider procuring payroll services, you have every good reason to make a thorough assessment of potential suppliers. You should consider both how they ensure the quality of their deliverables and what procedures they have in place for ongoing improvement measures.
When it comes to payroll processes, the most important quality requirement is that the salaries or wages are correct and that they are paid on time. For this to be possible, cost savings should not be your single most important decision factor. Instead, focus on buying a good service of adequate quality that meets your company’s needs, one that can scale and adapt to changes in your business. The signs of a substandard service are easy to recognize: repeated errors and mistakes that need to be corrected. Almost without exception, these are the kinds of mistakes that will increase your company’s costs.
Here are some important quality criteria you should consider when selecting a payroll service provider:
- The service is available without interruption and in real time.
- The service provider is professional and possesses a high level of expertise.
- The deliverables show a high, uniform quality and are error free.
- Consider cost effectiveness in terms of the total cost.
- The systems are easy to use and reliable, and customer service levels are high.
- Salary payments are made without interruptions in service, even under exceptional circumstances.
- The provider offers flexible, scalable solutions that easily adapt to changes, such as changes in headcount.
Another way to make sure that your partner will live up to your quality requirements is to find out whether the company complies with any quality standards. One example is the ISAE, an international certification standard for service organizations. The ISAE requires, for instance, that a partner has detailed documentation of processes, interfaces, and risks. The standard also requires descriptions of control points and IT systems and how these are linked to the processes. From a customer perspective, the main advantage of this certification is that functions are clearly described along with responsibilities in various situations.
Successful cooperation is a shared responsibility
The hallmark of successful outsourcing procurement is, of course, its foundation in a detailed and carefully developed game plan and related procedures. To achieve successful cooperation, it is essential to hold regular meetings and have open channels of communication between supplier and customer. This makes it easier for both parties to agree on a common overview in real time and keep each other updated when changes occur.
The prerequisite for a successful partnership is a high level of expertise in your outsourcing partner, and your own ability to ensure that you receive the correct output at the right time, every time.
You and your outsourcing partner share a common responsibility to foster cooperation while ensuring that you both comply with your contractual obligations, such as delivery levels. This can be done by using different quality and business KPIs. Finally, another prerequisite for a successful partnership is anchoring the outsourcing decision with company management, who should have a firm understanding of what it entails and fully support the payroll outsourcing provider with the necessary support.