If you’re looking for a payroll services provider, then you’ve probably already made the big decision to outsource your payroll to a trusted third party. To help you take the plunge, we’ve pulled together a handy guide to help you, as payroll and HR affect all areas of your business. Whatever type of managed payroll services model you opt for, it’s important you choose the best payroll services provider for your budget. Be clear what your company objectives are short and long term and draw up a rigorous checklist to ask vendors. The right payroll services provider will be your business partner for the foreseeable future, so the clearer you are on what you want and where you’re heading, the easier implementation and adoption will be – and the better their technology can support your strategic growth.
What is a payroll service provider?
A payroll service provider is an external company used by businesses when they don’t want the stress and expense of running an in-house payroll. The external company, depending on what form of managed payroll services they are offering, will calculate staff pay, make all necessary deductions, help keep you compliant with the latest regulations and send filings to the relevant authorities.
One of the options is fully managed payroll services. This is when a company hands over complete control of their payroll to the external provider. Depending on the size of the company, the complexity of their business and specific requirements, as well as industry sector, full-service payroll providers could deliver a complete suite of payroll and HR management solutions.
Can a payroll service provider help you achieve your objectives?
What do you want to accomplish as a business? Perhaps you need better visibility of your payroll and HR data. Or you dream of a more coherent, streamlined payroll services operation that’s accurate and on time. Maybe, if you’re a multinational, you need global payroll services to provide one system of record so you can deep dive into workforce data analysis and pivot your strategy accordingly. The clearer you can be for your vision and how technology can help you achieve it, the more effectively you can plan for implementation and adoption.
Factor in your unique needs
Decide what your organisation really needs from a payroll provider, and that will govern the model you choose. Maybe you need Managed Services where an expert provider like ADP runs your payroll accurately and on time, calculates your taxes and deductions and issues payslips? If you’re a global business or have workers with varying levels of pay preferences and human capital management (HCM) needs, then you could choose between Managed Services or the fully outsourced model, called Payroll Comprehensive Outsourcing Services. Full outsourcing is where in addition to taking care of every aspect of payroll, the vendor supports your employees with all of their payroll needs using a dedicated helpline. The right vendor will also help your business keep compliant, by staying on top of all regional and national guidelines. The key question here is to assess culturally how much or little control your teams are happy to hand over. Which is why doing your due diligence on vendors is a must.
Prioritise the security and privacy of employee data
Post GDPR and COVID-19, assuring security and privacy of your staff data is vital to your business success. The vendor you choose must also see it as one of their highest priorities. Ask them how your company’s data will be stored, transferred and backed up. Check what their fraud and business resilience policies are – and read the small print. Security breaches are increasing, particularly phishing attacks (from 72 per cent to 83 per cent from 2017 to 2021). According to the Cyber Security Breaches Survey 2021, among 39 per cent of businesses reporting breaches or attacks, one in five (21 per cent) lose money, data or other assets. The average (mean) cost of all the cyber security breaches businesses have suffered in the past 12 months is estimated to be £8,460.
Ensure a robust implementation model
We’ll take for granted that your chosen vendor will have the core functionality you’re looking for. Next on your checklist for an outsourced payroll provider is a successful implementation record, and evidence of a plan to get your payroll up and running quickly and efficiently. Do they provide support to your staff to ensure everything runs smoothly? Do they possess an effective change management strategy? And in your organisation, is there an executive sponsor, as well as a network of ambassadors to help ‘sell in’ the new technology?
Start planning early for adoption
Not everyone in your business will welcome change, which is why you need to plan for it. Start preparing early, as not just your people, but your systems and data must be ready. Getting stakeholder buy-in to purchase the solution is crucial in the initial stages. Use change management, transparent communication and training to ease the transition for all levels of employees. Your chosen vendor must have experience of this crucial adoption phase.
Choose the right service plan
Your new payroll and HR solution will only be as good as the support model behind it. Ensure the level of ongoing customer support is enough for your needs. The right provider will offer scalable protection which flexes up and down to suit your budget and changing requirements. Make sure you scrutinise the service contract and ask questions if anything is unclear. Does your plan include a dedicated service team with deep payroll and compliance expertise? Will you have access to strategic advisors, and does the vendor have a client network you can access to share best practices?
Use data for competitive advantage
Whether you need to improve your staff scheduling, or offer competitive compensation packages to attract top talent, data analytics are increasingly important for businesses. Add to your checklist a vendor who can help evaluate your data analytics requirements and apply insights to support your growth. Ask whether you’ll have a centralised data set and be able to configure analytics to customise your insights. Also vital are access to industry-wide data for benchmarking and predictive analysis to help with forecasting.
Evaluate the vendor’s history and future focus
At enterprise level, think about partnering with an established vendor whose technology and service model will support your changing requirements. At the very least, your payroll services provider will value and be invested in innovation - constantly seeking solutions to meet upcoming business challenges.
Look to evolve your people strategy
The whole point of automating and integrating your payroll and HR systems is not to continue with ‘business as usual’, but to streamline operations, improve efficiency, boost staff engagement and highlight areas for cost reduction. Check that your new payroll services provider will support staff through every step of the employee life cycle. The right solution can provide tools and the strategy to help your payroll and HR teams to maximise performance, enhance recruitment and provide visibility for spend across the entire business.
Not ‘just’ payroll
The COVID-19 pandemic has exposed how vulnerable a patchwork of payroll and HR systems can be in the face of often overnight change. Recent research shows that as a result of the pandemic, 66 per cent of decision makers turned their focus to cost optimisation, while 34 per cent prioritised operational efficiencies. Once upon a time, payroll may have been a back-office function but these days it’s front and centre in forward-looking businesses, and with digital technology, can become a strategic advantage.
Questions to ask a potential payroll services provider:
- Is your chosen payroll software available in the cloud?
- Does your chosen payroll provider:
- support implementation?
- Does your chosen payroll software:
- offer advanced security features?
- provide advanced functionality such as process automation?
- Does your chosen payroll solution:
- integrate with HCM software?
- assist your digital transformation initiatives?
- enable your business continuity plans?
- If the answer to all of these is ‘yes’, your chosen payroll solution has all of the functionality to transform your payroll process and support your IT priorities.
Choosing ADP as your payroll services provider
The right outsourced payroll provider can take your business to the next level using HCM expertise, data analytics and technical support to transform your organisation and drive strategic growth.
ADP has over 70 years’ experience of acting both as partially managed and full-service payroll providers to a wide range of clients in 140 countries. If you’d like to talk to an expert about the benefits of using our fully managed payroll services, please get in touch.
 CIO DIVE: The new business technology priorities of 2020
 ADP, TANLAP IT Decision Makers’ ebook 2021, p 14.