Did you know that approximately 300,000 jobs are outsourced in the US every year? That’s a whole lot of tasks being handled by third-party services nowadays!
And you can guarantee that many of them pertain to payroll. After all, outsourcing payroll comes with a host of enviable advantages…
For one thing, it helps managers and CEOs return their focus to their primary roles! It saves a considerable amount of time, effort, and money in the process. And, last but not least, handing the responsibility to payroll professionals ensures this crucial job’s completed in a smooth and error-free fashion.
Unless that is, you fail to do your due diligence and hire a substandard company for the task.
Do that and what should be a positive experience can backfire altogether! Want to avoid this unhappy fate? Check out our guide on what to ask before hiring payroll services.
1. What’s Included in the Package?
The most important thing to clarify is whether or not they provide the specific payroll services you need! Never make any assumptions here. Although most reputable companies deliver a similar basic service, you can’t guarantee they’ll do what you need them to.
For example, some providers let you print off paychecks on-site; others don’t. Some will deduct benefits (such as insurance) and 401(k) payments as standard; others won’t. And some track the accrual and use of paid leave, while others will not.
It’s up to you to identify the specific payroll services you need. You’ll find it far easier to narrow down your options and pinpoint the right company with these insights in mind.
2. What Do You Charge?
Make sure you clarify the financial commitment before signing any dotted lines as well! The cost of outsourcing payroll can vary hugely depending on:
- The quality of the company,
- The number of employees you have, and
- The level of support you need.
As you’d expect, more tasks and more employees equate to higher fees! It’s hard to give a precise figure without this information. Yet you can expect to pay anywhere between a few dozen and a few hundred dollars per month.
The good news? There’s often a ‘try before you buy’ option. A free trial will give you a sense of what you can expect without having to commit any capital upfront.
3. What’s Unique About You?
Make it your mission to discover what separates one company from the rest. How would they describe their unique selling points? What distinctive features, perks or services do they provide that’d compel you to pick them over the competition?
While you’re at it, try asking about the age of their technology too. You want to be working with a company that utilizes modern systems and equipment, right? Not only does this suggest they’re a premium service, but it also indicates your data’s in safe hands.
4. What About Tax Compliance?
Processing payroll isn’t enough. Try looking for full-service providers that guarantee they’ll handle state and federal tax compliance as well. Payments should be made in line with the law, on time, and with no mistakes; you’re onto a winner if they can process your W-2 and 1099 forms too.
You might find that some companies offer to do this for an additional fee. However, we’d caution against this approach. The better option is to work with full-service companies who do it as standard (and with no contribution required from you).
5. How Many Employees Can You Manage Payroll For?
One of our top tips for finding payroll companies is to think ahead before making your decision. After all, your business might be growing fast! A third-party vendor might be capable of handling payroll for your current team of 50 employees.
But could it cope with 500 of them? How about 1,500, or 15,000? If the answer’s “no”, then consider looking elsewhere.
The best payroll company will be capable of scaling as your business expands. This will save you the hassle of having to change providers when the current company can no longer manage. You’ll enjoy the convenience of having continuous, uninterrupted payroll support from a service you trust.
6. How Available Is Your Customer Service Team?
It’s hard to overstate the importance of customer care when it comes to outsourcing payroll. Imagine the frustration of needing emergency support and being unable to contact customer service. You couldn’t even file a complaint because no-one’s there to pick up the phone!
Trust us, paying extra for a company that’s available 24/7 will be worth every cent. They’ll be able to answer your questions, solve your problems, and go above and beyond to accommodate your needs. You could also enquire about tutorials, frequently asked questions sections on their website, and any online training they provide.
7. Is Your Service Secure Enough?
As you know, matters of cybersecurity are all important these days. The threat of hacks, breaches, and malware attacks is increasing every year! Get targeted by one and these digital disasters can cost millions of dollars through the downtime and corrective actions required to fix them.
The result? Any payroll vendor you work with must have secure systems in place to defend your sensitive data.
Check they use firewalls and data encryption. Make sure they use multi-factor authentication and that everything’s backed up on a regular basis. And clarify the methods, protocols, and practices they have in place to secure the physical equipment in their data center too.
Remember These Questions to Ask Before Outsourcing Payroll
Outsourcing payroll has never been more popular in business circles. And for good reason! Moving away from the in-house model offers a wide range of compelling advantages.
Find the right vendor and you’ll save yourself bundles of time, money, and effort. The trickier part’s choosing the best payroll company for the task! With countless options out there nowadays, separating the wheat from the chaff is easier said than done.
The questions in this post should help you do it though. Keep them in mind throughout your search and you should be one step closer to success. To continue your education in this area of business, search ‘HR’ on the website now.