Your organization’s human resources department is critical to the company’s success. Your HR team members are busy – after all, their job duties encompass so much more than just the management of people. An HR professional also controls payroll, administers compensation and benefits, handles legal compliance, and designs and implements training and development initiatives—to name only a few of their expansive list of responsibilities.
Payroll is among the most tedious tasks for HR professionals, and as your company grows and adds employees, payroll can be a strain. At some point, the strain turns into a bottleneck that may hinder your company’s growth. Here’s the good news, though: payroll is one of the easiest functions to outsource. Read on for the best tips for choosing a payroll service from the human resources technology experts at Benely.
Questions to Ask When Choosing a Payroll Service:
1. Does the Payroll Service Provide Sufficient Value to my Organization for what they Charge?
Find out what the payroll services you’re considering cover: do they just handle payroll duties, or will they also take care of filing your employee taxes? Payroll service providers can perform a wide range of tasks, so don’t settle! For example, your payroll service providers should be able to keep track of the hours your employees have worked, calculate their wages and payments, handle withholding deductions, and deliver payment to your employees – whether by printing and mailing them, or via direct deposit.
If you’re seriously considering a provider, it’s a good idea to ask them how they track hours, including overtime and both paid and unpaid leave. After you find out what they can do, ask about the price. Will you save money, time, or both by outsourcing to this particular vendor?
2. Does the Payroll Service Provider Offer a Financial Wellness Program for Your Employees?
Aside from all the functions we just mentioned, some of the best payroll service providers also offer a financial wellness program for your employees. In short, this is a service that can include tools and support to help employees manage their personal finances, make the most of their salary and wages, plan for future goals, and save for retirement.
- Why Financial Wellness is a Must-Have Employee Benefit:
You know that employees who are less stressed overall are more productive. Financial stresses may make employees feel that it’s time to jump ship, but a great financial wellness program can heal the underlying problems at hand, upping your organization’s talent retention.
You may already be offering financial and retirement planning, perhaps in the form of pensions, 401(k), life insurance, stock plans, and benefits. But adding a supportive financial wellness program that helps fix and control core personal finance issues will do even more for your employees long-term. It’s a great choice for both your organization and your employees. According to a study by the Financial Health Network, financial wellness programs have been affirmatively shown to “reduce employee stress, improve retention and engagement and help a company stand out in the marketplace.”
- The Benefit of Employee Financial Wellness Programs for the Employer:
A large majority of U.S. employees carry financial stresses with them, including credit card debt and other consumer debt, student loans, medical bills, and eldercare. A vendor who is a strong candidate to be your payroll services provider will offer individualized support for all these concerns. According to ADP, a payroll service provider that provides an employee financial wellness program, “when employees experience financial stress, it can negatively affect your business via lost productivity, reduced engagement, and increased health care costs. Workers who can’t adequately save for retirement may stay in the workforce longer, which can limit advancement opportunities for other workers and increase health care costs for businesses.”
3. Does this Payroll Service Provider Fit into my Organization Seamlessly?
Your payroll service provider should fit into your organization, not the other way around. Part of “fitting in” means that the professionals within your human resources department should be able to use the vendor’s software and communicate with them easily. Here are some questions to ask before signing on the dotted line:
- Can the vendor tailor their products to work with the infrastructure we currently have in place?
- How responsive is the vendor to vendor to requests for documents?
- Can you access data you need anytime you’d like to, or will you be forced to ask and wait for information?
Certain items should be available for your immediate use, such as employee pay stubs and hour logs. After all, a vendor that fits into your organization should not cause new issues, such as information unavailability, that you wouldn’t have to deal with if you handle payroll in-house.
4. What Level of Security is this Vendor Able to Provide?
It’s no secret that guarding your company and its employees’ financial data is critical from a safety and compliance standpoint. The vendor you choose for payroll services must take these concerns as seriously as you do. Inquire about the level of encryption payroll service providers employ on their sites and within their software. Here are some questions to ask:
- How often does the vendor update their software and platforms for security updates?
- Does the vendor conduct research on new and evolving threats?
- How often does the vendor test the security of their products against possible attacks?
- If a financial data breach occurs, who bears the responsibility: the payroll service provider or your organization? If the provider makes any positive representations to you about this, be sure to have their guarantees memorialized in your vendor contract.
5. What Support will the Vendor Provide to my Human Resource Department?
Even when you have a vendor handling your payroll, a simple question or a big emergency could arise at any time, and you’ll need all hands on deck. It’s always a good idea to inquire with vendors about the extent of their customer service operations. What hours are they available, and can your HR representatives talk to an actual person? If they have a help desk, can it be reached by phone, email, or both?
There’s nothing worse than waiting for a reply to an email when you need a resolution quickly. Ask your vendor whether they provide IT support for their software at all times, or only during initial implantation. These questions may seem painstaking, but you can never be too thorough when you’re signing a contract with a vendor!
6. To What Extent Will the Payroll Service Provider Train your HR and Accounting Professionals?
Transitions are never as smooth as we want them to be, but will the onus fall on the payroll service provider to make sure everyone’s up to speed, or will your HR and accounting professionals have to figure it out themselves? New software and new processes can be overwhelming to adjust to. You’ll want to make sure your team members have been trained to take advantage of every aspect and service that your vendor can offer, so you can make the most of your investment. During the bargaining stage, make sure to ask your potential vendors whether training and support are ongoing, or if it’s only offered during initial implementation.
7. Are you Able to Demo or Test the Vendor’s Products and Services Before you Sign a Contract?
Many vendors promise the world, but only some deliver everything their customers expect and more. That’s why it’s important to try out a payroll service provider’s offerings before you pull the trigger. Doing so will allow your HR and accounting departments to test for compatibility, ease of use, and of course, comprehensiveness of features.
Should My Company Partner with a Payroll Service?
This depends on your organization’s unique circumstances, including your number of employees and the size and capabilities of your HR and accounting departments. However, it may help to keep in mind that businesses that outsource some or most of their HR functions tend to grow 7-9 percent faster. They also experience 10-14 percent lower turnover rates. What’s most impressive, however, is that they are 50% less likely to go out of business. A 2014 study by McBassi & Company shows that businesses that use HR outsourcing capabilities are around 50 percent less likely to fail, or permanently shut their doors, from one year to the next when compared to similar companies in the population as a whole.
Need to Free up Time and Resources? Partner with an Expert in HR Functions.
If you’re considering contracting with a payroll service vendor, it helps to have the human resources technology experts at Benely on your side. We love to help growing companies make the right delegation and outsourcing choices, so they can focus on the business they do best. Take the next step by requesting a free demo or contacting Benely to learn more about simplifying your HR processes.