There are many reasons that companies may seek to outsource payroll processes. From helping companies control costs to improving accuracy and compliance, payroll outsourcing has a host of benefits that companies are looking to take advantage of. Still, as you evaluate payroll outsource companies, there are a few things to keep in mind. The most important thing to consider is whether you’re looking for low cost or value in your provider. If you are going with the low-cost leader, there is a reason for it, but you should seek to assess if they’re meeting your organization’s needs. Let’s dive into some of the characteristics of the best outsource payroll companies and how they can deliver value to your organization.
Payroll is one of the largest expenses most companies face, and the process becomes more complex and error-prone as a company increases its headcount. Because of this, 70% of companies cite cost control as one of the primary reasons they’ve sought to outsource. However, companies that look beyond the price tag can realize greater benefits to their organization. For example, 24% of small businesses that choose to outsource say that it creates greater efficiencies, while other companies say that partnering with outsource payroll companies saves them time and provides greater peace of mind.
Beyond these qualities, outsourcing payroll offers numerous benefits. These include:
- Scalability: By outsourcing payroll processes, companies can scale more easily and efficiently. As an organization’s headcount increases or decreases, the level of service provided by the outsourcing partner can be modified accordingly. As a result, companies can be more flexible in their HR department.
- Compliance: Payroll outsource companies must remain up-to-date with applicable laws and regulations as they evolve. Plus, with extensive experience managing compliance-related tasks, an outsourcing partner can easily ensure you remain compliant as well.
- Expertise: Often, it can be cost-prohibitive to hire highly skilled HR specialists. When outsourcing payroll to a third party, this cost is greatly reduced. An outsourcing partner can have the extensive experience your organization needs, but at a fraction of the cost.
In addition to the points above, payroll outsourcing can take much of the administrative burden off of HR staff. For some businesses, payroll can take up to 21 days every year, and many find the process frustrating and confusing. A significant advantage of outsourcing is that a third party handles the complexities of payroll processing, leaving companies with more time to focus on their core competencies and make strategic business decisions. And without the confusion of payroll, companies can feel more confident they are compliant in all aspects of the payroll process.
Assessing Outsourcing Providers
If you’re looking for the best outsource payroll companies, the definition may change depending on what your organization is looking for. However, to ensure you’re getting the most value from your payroll provider, you’ll want to carefully take a look at their processes and capabilities. Here are a few key points to consider when trying to differentiate between a low-cost partner and one that delivers real value:
- Customization: To provide the most value to your organization, your payroll outsourcing provider should be able to customize their service to your exact needs. Payroll outsourcing is not one-size-fits-all, so you’ll want a partner that will work with you to ensure your needs are met, and your employees are provided with a good experience.
- Location: Sometimes, low-cost payroll providers may utilize offshore resources to complete the necessary work for your organization. While they may tell you your point of contact is located within the US, since the work is being completed in faraway locations, this can introduce delays, communication bottlenecks, and other challenges. Plus, offshoring can introduce inaccuracies due to language barriers and unfamiliarity with local payroll laws. Working with outsource payroll companies that utilizes domestic resources provides companies and their employees with a better experience and support.
- Type of Employees: The type of employees that a payroll outsourcer employs can say a lot about the level of experience and support they can deliver. For a company using primarily contractors, these individuals are likely brought on for shorter engagements, like implementation, but are eventually let go when they’re no longer needed. For outsourcers that employ traditional employees, they should provide ongoing support for the best experience.
- Best Practices: A strong payroll partner will continuously develop and refine the industry best practices they utilize to deliver services to their clients. An inexperienced partner will likely not have developed their own best practices as they’re still learning the industry, which can limit the value they’re able to deliver.
- Proactive: Payroll providers should strive to be proactive on their client’s behalf. By working with a client to mitigate risk
Taking a careful look at how payroll outsourcers deliver their services can help you understand if they’re providing the value you need. If they fall short of your expectations, they’re likely not amongst the best payroll outsource companies.
Deciding To Outsource Payroll
If you’ve decided to outsource payroll services to a third party, the most strategic decision is to go with a provider that can provide the maximum amount of value while also helping you control payroll and other related costs. For companies with 75 to 6,000 employees, this can be a pivotal decision for the organization’s HR processes. By identifying the values you seek in a payroll provider and the level of service you need, you can more effectively compare providers to find the one that best fits your HR department.
Fortunately, Corban OneSource has the expertise and commitment to service needed to ensure your payroll is done the right way. Our experience spans more than two decades, allowing us to develop the knowledge and practices needed to help you stay compliant with the latest payroll regulations, eliminate errors, and control payroll costs. To learn more about how our US-based payroll team can help you eliminate errors, reduce redundancies, and strategically allocate resources, contact us today.