When it comes to payroll outsourcing services, there are so much service providers offering the same services and the questions is WHO should you choose and WHAT is the criteria that you should prioritize on before put pen to paper on the contract. Choosing the right payroll services partner that know what they are doing and understanding your business will increase the successful partnership and synergy in the long run.
Follow these 5 useful guidelines to help you select the ideal payroll partner to work with (longer term).
Payroll Processing Team (Important to know where is your payroll being process)
Ideally the processing team should be base in local country. This is one of the key successful payroll arrangements to ensure payroll partner’s processing team is base locally.
#1 Strong local knowledge on payroll processes as well as statutory legislative, rules and regulations.
#2 Easily contactable and the service turnaround is much quicker (no time zone differences)
#3 Local team understand you well particularly the culture and industry as well as no language barrier
A common pitfall that happens is where many service providers tend not to share the location of their processing center during business negotiations or their shared services center actually base out in another country. Worst still, you need to liaise with person from another country for your payroll matters. In some cases, you are forced to guide the payroll team on the local knowledge and regulations as they lacked the information or familiar with the changes if there’s any. In addition, the language barrier, time zone as well as slow responding expectation.
Passionate Client Service Manager
At the end of the day this is the person that you will work closely with for the entire contract or perhaps longer term hence the feeling, trust, reliability, the experience and the comfortability of the client service manager is equally important. When the client service manager is passionate and genuine about his work, he/she will care deeply to the point where it’s on their mind all the time for the interest of your company. This can be tested during the discovery meeting session as well as the responsive level in between the business negotiations.
Tip: doing a reference checking with their existing client helps to analyze the service level and commitment of the person.
Many of times a lot of the decision makers tend to choose reputable payroll providers but end up disappointed with their service commitment, which most of the client service manager has no time for you if it happens that your company falls under low revenue or small company. Be wise in choosing especially you need a passionate partner instead of going for reputable names. The last thing you want is to have low commitment, low payroll accuracy and lack of attention for you.
Pricing Advantage (Cheap doesn’t mean good)
In the market it is extremely competitive on the pricing that you literally confuse what are you getting out of the price proposed to you. Decision makers will look into the cheapest (proportionate saving in costs) but when we talk about payroll, reliability is the priority and if you sacrifice reliability to cheaper processing, you might end up endure with low quality processing delivery.
It is highly likely your payroll is being process offshore from another country probably India, Vietnam or Philippines. The main reason you can be offered such a low price for payroll processing mainly because the costs is low to have it offshore to be able to deliver your payroll. You will end up disappointed with the delivery, as mentioned earlier local knowledge, time zone, responsiveness and support which then tarnished the beneficial of outsourcing due to bad experiences and scepticism of the service delivery. As the saying goes – You don’t hire a lawyer from Laos (cheaper) to represent you in Malaysian court. Same goes to payroll.
Having said that ensuring if the service delivery within in country team would be much ideal, pricing and service level is assured.
Detailed Payroll Processes
A reliable payroll service provider always has a detailed payroll process such as
- A detailed yearly schedule payroll calendar for both client and service providers
- A payroll entry officer and 2 payroll checker before any payroll report deliver to client
- A proper encrypted password protected for all the files report
- A detailed sign off documents every month after completion of payroll
- A backup server or Data Center for client’s confidential payroll data
- A detailed BCP (business continuity plan)
Technology
There isn’t a need to have a state-of-the-art payroll system but a payroll system which is compliance to local rules and regulations plus regular updates from the statutory board if there are any regulations changes would just do perfectly fine. The end results we want is the accuracy of the payroll and timeliness of submission and contribution to local statutory authorities. Having an online self-service portal for any pay slip generation is a plus point but it still depending on company preferences.
A common pitfall which affecting a lot of service delivery issues happens mainly due to the manual payroll processing via excel sheets instead of proper payroll system which typically risking the accuracy of the payroll being processed and prone to mistakes. Best to ensure payroll service partner is using a proper endorsed payroll system.
Tip: you may request sample payroll reports for review. A payroll system will definitely come available with varieties of payroll reports.
Following these guidelines potentially assure you the right choice of payroll service partner you would like to engaged. A great reminder that the objective of outsourcing your payroll is to have a peace of mind, payroll health check audit, fully focusing on your core business as well as minimizing the unwanted internal staff turnover challenges or unforeseen pandemic situations such as Covid-19 where you have unmotivated staffs, cost cutting and operational issues to deal with, at least payroll remain intact with consistent delivery.
