In an ever-evolving economic landscape, payroll professionals know to be vigilant in order to remain in compliance and operate efficiently. Economic peaks and troughs, seasonal demands, and global restructuring are just a few factors that can lead to inaccuracies, delays, and burnout in payroll departments.
Companies can seek to relieve these looming pressures by outsourcing payroll and moving towards a managed services model, as explored in the free on-demand PayrollOrg webinar, “When Should an Organization Consider Payroll as a Service?”
Sponsored by Ceridian, attendees learned what options are available when looking to outsource payroll and how it compares to traditional payroll management. Instructor Sunit Nair, Vice President, Value Advisory at Ceridian, provided current data and trends for payroll pros to consider as well as specific cases where organizations can benefit from employing third-party payroll services.
Six Key Drivers
In his presentation, Nair highlighted the following six key factors, stemming from customer and prospective feedback, that drive companies to outsource payroll as a service:
- Wage and hour litigation
- Remittance penalties
- Business growth and complexity
- Data privacy and cybersecurity
- Data and process audits
- Payroll staff turnover
“It’s really difficult for businesses to stay compliant, and keeping up with all of these changes requires special skillsets and a significant investment in time in order to avoid remittance penalties,” Nair said.
Nair also notes that payroll staff turnover is high, providing data showing that the average tenure for payroll workers is no more than two years. This leads to a constant cycle of hiring and onboarding that keeps payroll departments in a perpetual learning curve.
“I’ve talked to organizations where there’s one person who knows what the intricacies of the payroll process are, but what happens when this person stops coming to work?”
Managed Service Partner Dealbreakers
For organizations looking to outsource payroll, Nair lists several distinct characteristics to look for when shopping for a managed service partner, with technology and security features being most important. Nair implores attendees to not be afraid to ask in-depth questions when selecting a provider, such as the following:
- Is the provider using their own technology or contracting vendors?
- Can technology issues be resolved directly with the provider or is the provider an intermediary to another?
- Is the technology modern and easily configurable?
- How quickly can the technology respond and adapt to regulation changes?
- How is the user interface?
- Will employees have the best experience with the service?
“It helps to ‘look under the hood’ to see what’s there and to make sure they have the right kind of technology to support your business,” said Nair.
This free on-demand webinar is available until 31 July 2024.