by Ian Dowd, Marketing Director Ireland, NGA Human Resources
We know that outsourcing your payroll to a leading provider is a safe thing to do, after all payroll outsourcing has been around since the 1980’s. Outsourcing is growing worldwide and Gartner predicts that globally Outsourcing your Payroll will grow by at least 15% by 2019.
Many organisations have already found this as an area they cannot ignore and have outsourced all or part of their Payroll function. However some business and HR leaders have reservations around payroll outsourcing. In our experience, here are the five most common concerns:
1. Will we lose the control of our Payroll?
Payroll Outsourcing means that you are involved every month in order to approve the payroll. There is a distinct difference between the management and control of payroll – when you outsource your payroll it is managed by a third party so you benefit from their expertise but retain complete control.
2. Is Payroll Outsourcing reliable?
If you select a third party with deep knowledge and experience in this area it is certainly reliable. Dedicated payroll processing suppliers do this every week of every month of every year for some of the biggest companies in the UK. There should be strict controls in place to ensure the payroll runs are done efficiently and effectively every time meaning you would struggle to get a better service in-house.
3. Will my data be secure?
Many Financial Directors fear that if the data is held outside the company then it will be less secure. If you select a supplier who invests heavily in infrastructure and security controls, in reality your employee data will be even more secure. The majority of small/mid-size businesses will have little or no back up or disaster recovery in place should their payroll system break down.
4. Is it more expensive?
It’s actually more cost effective to outsource Payroll in most cases. People don’t realise the true cost of payroll processing and tend to look only at the salary costs of the people running the payroll in isolation when there are a whole range of additional ancillary costs which organisations rarely take into account. These include the IT hardware and software required to process and run the payroll; the IT department who are required to keep the software and hardware up-to-date; the costs of your payroll stationery requirements – payslips, envelopes, paper for reports and printer consumables which all cost money. Above all it’s the time you save in outsourcing your payroll – time that could be better spent elsewhere.
5. Isn’t it just a hassle to change?
You might be happy doing the payroll run at the minute but what happens if your payroll system fails or if your payroll manager goes off sick, or on holiday? In addition, by not having to worry about the dreaded monthly payroll run you and your team can focus on other aspects of your business which could be more important and more productive.
Tax authorities are increasingly seeing the payroll function as their tax collection agency and transferring an ever greater burden onto employers through new and tighter legislation. By outsourcing your payroll you can avoid dealing with government agencies and you don’t need to worry about keeping up with changes in payroll legislation and statutory requirements.
You would be surprised how quickly you can get up and running. Ensure you choose a reputable Payroll Outsourcing supplier who can prove they have invested heavily in a tried and tested implementation process. They should work closely with you at every stage during the transition including a mandatory parallel run with your existing system before go-live.
Outsourcing your payroll really needn’t be as daunting as it may initially seem. Look carefully for a supplier with the experience to help you choose the solution which is right for you and will be able to help you build a business case which best suits your organisational requirements. With the right expertise you can save a lot of time and money.
About NGA Human Resources
NGA Human Resources is a global leader in helping organisations transform their business-critical HR operations to deliver more effective and efficient people-critical services. We help our clients become better employers through smarter, more streamlined business processes — to save money, manage employee life cycles, and support globally connected, agile organisations. This is how NGA makes HR work.
What sets us apart is The NGA Advantage. It’s a combination of deep HR experience and insight, advanced technology platforms and applications, and a global portfolio of flexible service delivery options.
Founded in 1969, NGA has over 44 years of experience in the IT industry. As a recognised global HR services leader, we have offices in 35 countries on five continents, supporting customers in more than 100 countries.