Outsourcing payroll

Neil Lagden, Head of Bond Payroll Services

The business of paying people used to be a relatively straightforward process. But over the past 20 years or so, an almost continuing raft of legislative changes and shifting business requirements have made calculating payroll anything but straightforward.

Simultaneously, demand for increased labour market flexibility has seen a growing dependency on job-sharing, part-time and temporary working and a corresponding change in working time patterns. The way that people are rewarded has become more creative with increased emphasis on flexible benefits.

All of this activity places additional pressure on the payroll function and the required technology. In-house payroll teams need to ensure that the service they are buying matches the requirements of the department, business and legislators, but that it is also sufficiently adaptable to react to any future changes as the industry and market develops.

Upgrading payroll systems is a major undertaking and cannot be underestimated. Before committing to what will likely be a complex implementation project therefore, it makes sense to consider the alternatives, which could even involve taking payroll out of house.

Are you in or out?

Set against the increasing tide of increased rules and regulation, outsourcing payroll can seem an extremely attractive proposition. Using a reputable and established provider means clients are guaranteed a reliable and accurate service and have access to advanced levels of payroll expertise ‘on tap’, reducing administration and shifting the burden of compliance.

A fully-blown outsourced arrangement removes the worry and costs associated with keeping up-to-date with new technologies, as outsourcers are able to invest in the latest sophisticated technological infrastructure. They will also be geared up and sufficiently agile to modify their processes to reflect market conditions.

There are several different types and levels of outsourcing – indeed, a fully blown solution might be right for one company, but for someone else a hybrid between an in-house system and outsourced solution will be best. Outsourcers must be chosen primarily on flexibility and a willingness to work through the options to tailor the service delivery to meet the client’s needs.

Establishing a fruitful working relationship requires an ability to foster and maintain a spirit of trust and not to be overly prescriptive when it comes to specifying requirements. In this way, the client can be certain of receiving the precise service required, and be left to concentrate on its core business. In the meantime, the outsourcing partner can take charge of all the changes that will inevitably occur as the workplace continues to evolve.

 

 

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