Let’s face it – everyone looks forward to payday. For most it comes every other Friday but the schedules vary across the board. Some get paid weekly, bi-weekly or twice a month, it all depends. Even the day of the week can be up for grabs with Friday being a favored pick for many companies but some paying on Wednesday’s or certain numbered days in a month. Many people are familiar with their payroll company as it normally shows up on the corner of their paystub. ADP, Paylocity and Fidelity are a few big names that readily come to mind. What many don’t realize is there is a lot that goes on behind the scenes to make sure you actually get paid at the end of the day. Depending on the service provider it involves some manual or automated steps and a seamless integration with your companies HR, Finance and Accounting departments. Payroll providers also do more than just paying employees. They help manage any unemployment claims, wage garnishments and even things like performance review portals. This leads us to a very important question, is your company getting the most value from your payroll provider?Value in the payroll space can be determined in many different ways. To name a few:
1. How seamlessly do they integrate with your companies systems?
2. Do they provide a suite of offerings or only core/basic services?
3. Do they offer competitive pricing in the marketplace?
Payroll companies at their base all offer a basic utility or service – the administration and transfer of funds from one party to another. However as described above many have competitively differentiated themselves in the marketplace to offer a full array of services catering specifically to the HR suite. Many HR leaders are overwhelmed with many different offerings, it is important to cut out the noise and really evaluate what is important to your organization. Cost may not always be the driving decision factor, rather capability and features may outweigh everything else. There is no one size fits all approach but it is important to ensure that you are not significantly overpaying for the basic utility or service and that is the actual fulfillment of payroll. Many important factors go into cost structure such as the frequency of payroll, number of employees and complexity of integration. This being said it is important to note that a “good deal” may be very different between a large and small organization.
Many times either a CHRO, other HR leader or Finance leader makes a final decision on a payroll provider. It is important to take a step back and truly understand if your organization is driving the right value for this service offering. Additionally, it is very easy to get engrained and comfortable with a payroll provider and see prices that continue to skyrocket year over year. Taking your offering to market can help ensure that you are getting the ultimate value for you, your company and your employees. If nothing else it will help reset your relationship with your current vendor. Realize that optimizing these services is ever more important in today’s environment where every dollar counts.