HR Grapevine
HR Grapevine | Executive Grapevine International Ltd

Sourcing new payroll solutions

In line with a global trend, the number of organisations outsourcing their payroll services is increasing year-on-year...
Sourcing new payroll solutions
 

Sourcing new payroll solutions



In line with a global trend, the number of organisations outsourcing their payroll services is increasing year-on-year and, dispelling a commonly held notion that outsourced payroll only suits organisations with a certain number of employees, a recent study showed a consistent outsourced percentage across all ranges of total employee numbers. So, if workforce size is not always a determining factor, what might influence an organisation to outsource its payroll?

 

Lack of knowledge

Companies opting to use payroll services often do so because of concerns about their internal payroll knowledge and capability; a desire to be compliant and an intention to mitigate the associated risks. UK payroll is complex and internal teams require an in-depth understanding of the payroll landscape they inhabit. Knowledge comes at a cost, in terms of both training and lost time and employees must maintain currency.

Risk mitigation

Single-point sensitivity is a concern for many organisations that would struggle if they lost the knowledge held by one or two key staff to turnover, retirement or significant illness. Many organisations also seek to segregate payroll duties to help mitigate the potential for fraudulent activity.

 

Compliance

Knowing you can configure your payroll system to accommodate awards or agreements is one thing, but you must also be certain that your payroll practitioner can actually do it. Organisations not using compliant payroll technology risk breaching regulations and suffering both financial penalties and reputational damage.

Weighing the options

When investigating outsourcing as an option, businesses must consider both the gains and potential risks involved. Managing a payroll in-house requires investment in payroll expertise, payroll technology and training. It requires dedicated resources that are a salary and on-cost to the business. The potential for single-point sensitivity, where the business relies on one or two individuals for their expertise, must also not be overlooked. In contrast, an internal payroll team can act more quickly than an external one that is servicing numerous different clients. They can be more responsive to immediate requirements and are able to generate data insights that inform business strategy. Insight generation has the capacity to add significant value to the payroll function and organisation.

Payroll outsourcing is a viable option for many organisations, big and small. When deciding on outsourcing, consider elements such as cost, your appetite for risk, and your desire to extract insights from payroll data. Most importantly, consider whether the potential vendor can ensure they have proven data security measures, flexible options for client involvement and a capacity to give you unfettered access to your own data. After all, you may have outsourced payroll processing, but not your responsibility.

 

Contact Frontier Software on 0845 370 3210,
email [email protected] or
visit our website at www.frontiersoftware.com

 

In line with a global trend, the number of organisations outsourcing their payroll services is increasing year-on-year and, dispelling a commonly held notion that outsourced payroll only suits organisations with a certain number of employees, a recent study showed a consistent outsourced percentage across all ranges of total employee numbers. So, if workforce size is not always a determining factor, what might influence an organisation to outsource its payroll? Here are just a few points to consider:

Lack of knowledge

Companies opting to use payroll services often do so because of concerns about their internal payroll knowledge and capability; a desire to be compliant and an intention to mitigate the associated risks. UK payroll is complex and internal teams require an in-depth understanding of the payroll landscape they inhabit. Knowledge comes at a cost, in terms of both training and lost time and employees must maintain currency.

Risk mitigation

Single-point sensitivity is a concern for many organisations that would struggle if they lost the knowledge held by one or two key staff to turnover, retirement or significant illness. Many organisations also seek to segregate payroll duties to help mitigate the potential for fraudulent activity.

 

 

Compliance

Knowing you can configure your payroll system to accommodate awards or agreements is one thing, but you must also be certain that your payroll practitioner can actually do it. Organisations not using compliant payroll technology risk breaching regulations and suffering both financial penalties and reputational damage.

Weighing the options

When investigating outsourcing as an option, businesses must consider both the gains and potential risks involved. Managing a payroll in-house requires investment in payroll expertise, payroll technology and training. It requires dedicated resources that are a salary and on-cost to the business. The potential for single-point sensitivity, where the business relies on one or two individuals for their expertise, must also not be overlooked. In contrast, an internal payroll team can act more quickly than an external one that is servicing numerous different clients. They can be more responsive to immediate requirements and are able to generate data insights that inform business strategy. Insight generation has the capacity to add significant value to the payroll function and organisation.

Payroll outsourcing is a viable option for many organisations, big and small. When deciding on outsourcing, consider elements such as cost, your appetite for risk, and your desire to extract insights from payroll data. Most importantly, consider whether the potential vendor can ensure they have proven data security measures, flexible options for client involvement and a capacity to give you unfettered access to your own data. After all, you may have outsourced payroll processing, but not your responsibility.

 


More from this issue
Event
Are you ready for the people revolution?

Are you ready for the people revolution?

HR Grapevine
HR Grapevine | Executive Grapevine International Ltd
Perspective of HR
Which companies have the most forward-thinking office space?

Which companies have the most forward-thinking office space?

HR Grapevine
HR Grapevine | Executive Grapevine International Ltd
Star Interview
Diversity in Silicon Valley: 'It's not just a poster'

Diversity in Silicon Valley: 'It's not just a poster'

HR Grapevine
HR Grapevine | Executive Grapevine International Ltd