How to tell whether or not to outsource your payroll

Payroll sits in a strange place within the company – it is a repetitive, often thankless process that has to be endured, but without it, the workforce would riot and raise any number of complaints if it is so much as 24 hours delayed. After all in many cases, if they don’t get paid, nor does the landlord or the water board.

• Your company is a small business that simply lacks the requisite resources (personnel, facilities, legal knowledge and experience, or even time) to get embroiled in payroll. Alternatively, you might work for a small company that is growing rapidly and therefore requires a scaleable payroll solution that is easier to find by working with an outsourcing provider. In either of these scenarios, taking the time required to find, recruit and acclimatise new staff is rarely a realistic option.
• The one person responsible for payroll in your company is leaving soon or has left suddenly – outsourcing, even if it is only a temporary measure, is always a valid option, giving you a relatively stress-free period in which to find and recruit a suitable replacement.
• Processing the payroll and supporting systems internally is not proving economical, whether that is financially or in terms of efficiency. Indeed, freeing up staff time to concentrate on key business goals whilst professionals run supporting business processes, thereby mitigating risk, is often cited as a key driver when outsourcing.
• The peaks and troughs often associated with payroll cannot justify employing even part-time staff. 

• Your company has complex internal payroll processes, meaning that in-house control of the payroll function is critical to the business. Indeed, in this scenario the company may have a strict overall non-outsourcing policy.
• The requisite specialist skills already exist within the organisation and those employees have the time and ‘bandwidth’ to manage the company’s payroll – allowing employee queries to be dealt with efficiently in-house.
• You have not been able to find a suitable payroll outsourcing provider to suit your requirements. Comprehensive functionality is a given in the industry now – however, the outsourcers you have seen so far may have failed to demonstrate their ability to fully integrate with your processes and therefore meet your expectations.
• You are concerned that some outsourcing providers inadvertently limit your access to management information due to a lack of transparency. If you are unable to retrieve information that is important for processes beyond payroll then this suggests a tone of secrecy and will often sour an outsourcing relationship.