Outsourcing payroll is about gaining, not losing, control

5 February 2021 - Reading time: 4 Minutes

Services

There’s usually an element of trepidation when we relinquish control of something for the first time, even if we know the benefits outweigh any potential risks. We feel it professionally, as well as in our daily lives.

When it comes to outsourcing payroll, people often feel nervous. They see the advantages but that feeling of losing control can bring a sense of anxiety.

It’s understandable. Employee pay can become very emotive, very quickly, if mistakes are made.

But are these fears justified? And, are you really losing control when you outsource payroll?

Outsourcing payroll is about gaining, not losing, control

Partner, not supplier

The concern many organisations have is that by outsourcing their payroll, they’ll no longer have visibility over this business-critical function.

If that’s the case, however, then something has gone terribly wrong. An outsourcing partnership should be completely transparent. This should be relationship built on open and honest communication – one that goes way beyond a traditional buyer-supplier arrangement.

There will always be one or more people within the business working with their provider towards a common goal. It should never be a case of handing over the keys and walking away.

It may be a little glib to suggest that the payroll partner becomes an extension of your HR or finance team, but that’s how it should feel.

Developing a stronger understanding

In order to continuously provide the best advice and service, the payroll partner will need to completely immerse themselves in the specific needs of their client’s business.

If they are doing their job properly, they should challenge the customer’s previous ways of doing things and constantly suggest ways to make improvements.

A true partnership is a two-way street, however. So that ability to challenge works both ways. When the business wants to know why their provider wants to make changes, they should expect a thorough explanation.

This enables them to benefit from the insight their partner can offer. They can access that expertise and see how processes can be enhanced in order to enable greater efficiency and accuracy – something that’s not always possible with an in-house team.

This also gives the business control. They will understand what actions are being taken, and why – but can still request that changes are made when required. So, while the business may no longer be carrying out the payroll activities themselves, they will continue to direct them.

moving to managed

Continuous oversight

The client and the partner will also agree a governance model, that works for both parties, covering a service level agreement (SLA) with specific KPIs.

To ensure everything is managed smoothly and that the partnership remains healthy, this governance should include regular reviews.

This is an opportunity to check the specifics, such as accuracy and timelines, and to ensure that the SLA is being met – for example, are support tickets being responded to within the right timeframe?

This oversight ensures that when companies outsource their payroll function, they retain control and the power to hold someone accountable.

An evolving relationship

These regular reviews should be viewed as more than just a checklist, tick box exercise, however. They are an opportunity to hear feedback and ensure that the partnership remains aligned.

Businesses rarely remain static. Where a strong partnership exists, you will be able review whether the current payroll service is suitable for the changing needs of the business. This means that the responsibilities and requirements of the outsourced partnership can, and often do, evolve.

Of course, with an outsourcing partner, service levels can be scaled up or down as and when required. In this respect, businesses gain more control over their payroll function than they would have if they were required to invest time and resources to restructure their own internal team.

Despite any initial concerns, a much greater level of control is possible when outsourcing, as long as special attention is paid to the relationship between the service provider and the point of contact within the business. If that relationship remains strong, trusting and transparent, there should never be any fears around losing that control.

 

Want to learn more about what happens when you outsource your payroll?

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