Five reasons companies switch payroll provider
A multi-country payroll outsourcing deal can lock companies in for many years – and that level of commitment can lead to relationship issues, and a desire for change. What are the main drivers that lead payroll managers to switch providers?
It can be quite a task to change payroll outsourcing providers, especially when looking at multi-country deals. We’re not just talking about switching the bank details of a handful of staff: there are foreign exchange considerations, hand-over periods, large-scale rollouts. Still, sometimes the decision just has to be made, and it’s often down to one of these reasons.
1. Cost and accuracy
If you get an employee’s pay wrong once, you will hear about it. If you get it wrong again, there is a serious issue somewhere in the chain. The reason you engage a payroll outsourcing provider is to ensure someone is there putting time and effort into ensuring accuracy. If that accuracy is absent, the chances are you’ll be combing the contract looking for an escape clause.
2. Changing legislation
Employment and tax legislation are movable feasts. Many countries are moving to electronic reporting for tax, social security and labour information, for example. Your payroll outsourcing solution must be flexible enough to react at the right time in the right way. What used to be fine to control in house might suddenly become a burden that is best dealt with out of the company.
3. Systems
Sometimes even the best software solutions become obsolete, replaced by newer, faster, more advanced solutions. Vendors and developers move on. If you’ve just signed a new five-year payroll outsourcing contract, what clauses are in place to ensure the software used to pay your staff remains up to date and can access service support when necessary?
4. Change in organisation
Company strategy changes. What worked last year might not necessarily be right next year. Companies can be subject to M&A, there may be a change in the C-suite, management might decide on a group-wide rollout of a new IT system that renders payroll software useless. You never know what is around the corner, and that can drive a payroll manager to keep up to date with the latest payroll outsourcing solutions.
5. Relationship issues
There are many reasons for a business relationship to break down. Any one of the above might be the cause, or it could just be a bad fit from the start. You need to be working with a payroll outsourcing partner you can trust to get on with the job and get it done right; someone you can call on for help when it’s needed. If your payroll provider sends you around multiple people before you get a vague answer, then it’s not really worth the hassle. You need a partner that provides a single point of contact, wherever you are in the world.
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