Engaging a payroll provider can be an exciting yet challenging task for business leaders and the HR department. There are numerous benefits associated with engaging a payroll provider.
Why engage a payroll provider?
For most organisations, engaging a payroll provider means freeing up valuable time for your HR professionals to focus on driving and implementing strategic initiatives. At the same time, it ensures accuracy and efficiency when it comes to processing payroll.
Hence, it is important to find a vendor that is able to benefit your HR needs instead of wasting your time. This starts with asking the right questions and requesting the right services from your payroll vendor.
What are the critical questions to ask payroll providers?
There is no one-solution-that-fits-all when outsourcing your payroll. Each organisation has varying business and HR needs. It is imperative to ensure that your payroll provider is able to tailor their solutions and services to meet your HR needs.
Here are some of the questions to keep at the top of your mind when sourcing for a payroll provider:
1. What type of payroll services do you provide?
Most payroll providers offer a variety of services beyond the basic payroll processing, such as salary disbursement and tax services. Have a list of payroll services that your organisation needs and use it to narrow down the vendors that are able to meet your checklist.
Some payroll providers may be able to bundle certain services together or knock off less critical services based on their understanding of your business requirements and industry, helping you to save on unnecessary costs and tailoring their services to meet your payroll needs.
2. What is the setup process?
Transitioning to a new payroll platform should be seamless and easy. You will want to be able to integrate all your employees’ data into the new platform without any discrepancies or disruption to daily operations. Find a vendor that is able to provide you with clear steps on how to integrate your payroll on the legacy software to the new platform. Having a user-friendly payroll platform is the solution to freeing up valuable time.
3. How user-friendly is the platform?
Given that the main point of leveraging a payroll platform is to drive operational efficiency, it should ideally be user-friendly. Ask for a demo of the service if possible. Is it intuitive for staff without any IT background? If the platform is too technical, you may end up spending more time using it than if you were to process payroll manually. The payroll platform should be user-friendly enough such that your HR staff are able to manage the data without extensive training.
4. What additional features do you offer over your competitors?
Some payroll providers are able to offer you additional add-ons or services that make them stand apart from others. Are there any unique features or services that they can offer which no other vendors can? Are they able to offer you extra perks to help you save time in running your payroll?
5. How secure is your platform?
Given that the payroll platform is meant to process payroll and essentially store confidential employee information and payroll data, data security should be a huge concern when it comes to selecting your payroll provider. The payroll provider that you go with must be able to protect and safeguard the confidentiality of your data.
You will want to know where and how data is stored. Check with them if they have encountered any data breaches before and what is their mitigation strategy in the event of a data breach. Make sure that your payroll vendor understands the ramifications of any data violation.
6. Can the payroll platform be integrated with other HR systems?
As you reap the time savings from engaging a payroll provider, you may also want to know what other benefits they may offer. Can the payroll platform be integrated with other HR systems such as accounting or leave management? Do they offer performance management tools to enable managers and HR staff to work efficiently?
As your payroll needs are likely to grow in tandem with your business and staff growth, select a vendor that is able to integrate with your other internal systems. This saves you time from having to manually enter or reconcile payroll with your other HR systems each time you need to upgrade your payroll platform.
7. What are your customer service levels?
Ongoing customer service is a crucial aspect for any payroll provider. You will definitely want to know how easy it is to get assistance should you encounter any issues with your payroll platform. Is their customer service available 24/7 or are they limited to certain working hours? Do they have an FAQ page? Are there representatives online? Will there be on-site help provided? Robust and accessible customer service should be on the top of your “must-haves” when deciding on your payroll vendor.
8. What is your pricing structure?
Do not get caught by hidden costs when engaging a payroll provider. Many payroll providers may offer cost-effective solutions upfront but slap you with hefty add-ons or recurring charges the minute you engage their service. Clarify with the payroll provider on any potential costs before engaging them.
At the same time, have a proper exit strategy. There are times whereby organisations fall into the trap of paying more than when they are getting due to an unfair agreement with a payroll provider. Negotiate with your payroll provider on an exit strategy or termination process and ensure that the terms and conditions are clearly spelled out in the contract. This helps to minimise any potential misunderstanding should you decide to take back payroll in-house one day.