How to measure the true value of your outsourced payroll service
According to research from YouGov 70% of organisation outsource part of their business to external suppliers. If you’re outsourcing payroll with a managed payroll solution, how are you measuring the true value?
We’ve pulled together a few killer questions to ask yourself when thinking about outsourcing value.
Does opting for a managed payroll solution help me reduce headcount?
Outsourcing your payroll might mean you can reduce the headcount in your payroll team, or wherever this function sits within your business. This extra flexibility may allow you to allocate resource elsewhere in the company or remove it completely and reduce your overheads. The easy way to see true value here is compare how much your outsourced solution costs to the number of heads allocated to payroll. Depending on the size of your business this will vary. It’s important to note that in-house experts and an outsourced solution aren’t a straight swap, there are pros and cons to both.
Does opting for a managed payroll solution save me money?
This seems like an obvious one when talking about ‘value.’ Research from YouGov suggested that 32% of SMEs outsource their payroll because it’s cheaper than keeping it in-house. However, we aren’t just talking about the bottom line: you should also consider perceived value. In many cases in-house options might be cheaper, but you’ll need to consider things like time savings, reduced headcount, administrative saving and let’s not forget the value of peace of mind!
Does opting for a managed payroll solution save me time and admin?
In some instances, it may be cheaper to keep your payroll in-house, but if this is the case be wary. It’s important to consider how this aligns with your business goals. Outsourcing enables you to concentrate on the areas of your business that may contribute towards business improvement, efficiencies, and profit, rather than on administrative payroll tasks.
It’s important to consider just how much you’re currently paying for the following:
- Inputting your data (keying, re-keying from other platforms such as Sickness and Time & Attendance)
- Printing, reporting and sending files to various government agencies such as the HMRC and Student Loans.
- Distributing wages and payments to employees and 3rd party agencies.
- Getting things wrong such as re-running payrolls, correcting admin mistakes in addition to the risk of tribunals and government fines
Does opting for a managed payroll solution improve the experience my employees receive?
Getting people’s pay wrong or doing it late is a sure-fire way to make your employees feel undervalued and demotivated. We conducted research that found 60% of people have spotted mistakes on their payslips and 39% have been paid late. The result? One in five employees have quit their job over a poor payroll experience.
Therefore, you need to ask yourself, what is the additional and value I can add to my employee’s experience by investing in a payroll solution that just works?
Does opting for a managed payroll solution keep me complaint? Can I afford not to be compliant?
There are at least 174 pieces of regulation affecting payroll in the UK, and with legislation changing all the time it can be incredibly difficult for in-house teams to keep up, let alone apply the latest legislation. In 2020, 191 companies failed to pay £2.1 million to over 34,000 workers in basic minimum wage. As a result, these companies had to pay back wages and incurred fines from the HMRC.
When outsourcing payroll the burden of compliance shifts. So, what amount of time, money and headache will you be willing to endure if keeping your payroll in house?