There are many reasons companies decide to outsource payroll: saving time, saving money, focusing on core competencies, and ensuring compliance with multinational regulations, taxes, and employment laws, just to name a few. Whatever the reasons behind the decision, successful payroll outsourcing arrangements have one thing in common: manager involvement. Even when the work itself is outsourced, the process isn’t completely hands-off. Managers provide an essential link between employees and the outsourcing provider.
Communication and change management
The role of the manager starts as soon as the decision to outsource payroll has been announced. It’s critical for the manager to keep employees informed about things like why the decision was made, when the change will be implemented, what (if anything) they’ll need to do differently, and what to do if there’s a problem with their pay. In addition, the manager can serve as a sounding board to answer employees’ questions and ease their concerns.
Managers also have an important role to play in employee advocacy, both between employees and internal decision-makers and between employees and the outsourced provider. You’re the one who knows your employees as people with names and faces, not just random ID numbers. You’re the one who understands the effect a mistake or delay in getting paid will have on their families. That’s why you’re the logical person to speak and advocate for them both during the initial transition and any time there’s a problem.
Employment laws vary by country, but be aware that, even if you outsource payroll, you may still be accountable when it comes to compliance and other legal issues – saying, “I don’t handle that anymore,” might not be enough to absolve you of responsibility. It’s imperative to stay involved in the process so that you can spot problems while they’re still small enough to correct.
One of the primary reasons so many companies outsource payroll functions is because of the challenge of keeping up with the myriad of laws and regulations involved when operating in the Asia-Pacific region. Reputable payroll outsourcing providers have processes in place to keep up with changes in the law as well as automated systems that apply the right laws to the right employees. However, you’re the one with on-the-ground experience in both your company and your country. You live and work there, which means you’re in an ideal position to spot those situations where how things work in theory doesn’t quite match how they work in real life. You also know your employees and can explain situations that might not be easily understood from objective data alone. For instance, if you’re in a country that has different leave policies for teenagers than for adults, you might need to explain that a particular employee had a birthday while on leave, so that the provider can determine the proper way to track it. Your on-the-ground experience can provide a valuable backup to your payroll provider’s technical expertise.
Outsourcing payroll is a great option for many companies, but it has to be executed correctly. Even the very best providers can’t succeed without help from inside the company, so just handing things off and never looking back isn’t an option. As a manager, you’re in the best position to do that. It’s up to you to advocate for your employees, put names and faces to their payroll information, and clear up misunderstandings. That’s what a manager’s role is all about, and outsourcing payroll doesn’t change that.