{"id":4200,"date":"2019-12-26T19:55:28","date_gmt":"2019-12-26T19:55:28","guid":{"rendered":"https:\/\/www.peeriosity.com\/shared-services\/articles\/?p=4200"},"modified":"2022-09-01T20:38:49","modified_gmt":"2022-09-01T20:38:49","slug":"issues-and-opportunities-with-outsourcing-payroll","status":"publish","type":"post","link":"https:\/\/www.peeriosity.com\/shared-services\/articles\/2019\/12\/issues-and-opportunities-with-outsourcing-payroll\/","title":{"rendered":"Issues and Opportunities with Outsourcing Payroll"},"content":{"rendered":"\r\n\r\n\r\n

Introduction<\/strong><\/p>\r\n\r\n\r\n\r\n

The Payroll process by definition touches every single employee of the company, where the experience directly shapes each employee\u2019s view of the company\u2019s administrative processes.\u00a0 The process perfectly fits the concept of a hygiene factor, where no one notices when everything works smoothly, and when things don\u2019t the impact on productivity and customer satisfaction will be dramatic and, possibly, long-lasting even if the problem is quickly identified and resolved.\u00a0<\/p>\r\n\r\n\r\n\r\n

The Payroll <\/a>process itself, while often within the scope of Shared Services, has been a bit of a misfit, where half the time the process reports into Finance and roughly half the time the process reports into HR.\u00a0 There are even instances where Payroll reports to Treasury, in some cases only because of a serious error or a major problem when it was included in either Finance or HR. Career pathing<\/a> can also be difficult, since the Payroll process is highly technical with many accounting and regulatory compliance issues, so transitions into or out of other Finance or HR processes aren\u2019t easy or even likely.\u00a0<\/p>\r\n\r\n\r\n\r\n

Because of these challenges, the Payroll process is one of the most common processes where companies make the decision to outsource to third-party providers rather than keep the process in-house.\u00a0 This is particularly true for companies with revenues less than USD $500 million per year, and it is also likely for Peeriosity member companies where membership requirements are to have annual revenue of over USD $1 Billion per year, with over 50% of member companies having revenues greater than USD $10 Billion.\u00a0 These companies are all large enough to support a captive Payroll process, yet, for many, their decision has been to outsource either significant components or the entire process.<\/p>\r\n\r\n\r\n\r\n

iPollingTM<\/sup> Results Review<\/strong><\/p>\r\n\r\n\r\n\r\n

Recently, Peeriosity\u2019s iPollingTM<\/sup> was <\/a>used by an HR Services Director at a member company to explore the pros and cons of outsourcing their Payroll process.\u00a0 Using this approach, the poll author was able to quickly gain insights into her issue, which she described as follows:<\/p>\r\n\r\n\r\n\r\n

Our company is evaluating potential Payroll outsourcing providers and would like to understand the experiences of other major companies in this area.<\/em><\/p>\r\n\r\n\r\n\r\n

Looking at the iPollingTM<\/sup> results, the first question asked whether Peeriosity member companies were outsourcing the Payroll process and, if yes, who they were using as their primary Payroll outsourcing provider.\u00a0 The results indicate that 33% of Peeriosity member companies are performing the Payroll process in-house.\u00a0 Of the 67% of companies that are outsourcing, 56% are working with ADP as their primary Payroll outsourcing provider<\/a>.\u00a0 Here are the details:<\/p>\r\n\r\n\r\n\r\n

\"payroll<\/figure>\r\n\r\n\r\n\r\n

The second question asked the companies that outsourced what their overall level of satisfaction is with the outsourcing service provider they selected.\u00a0 Interestingly, only 13% are very satisfied, with another 31% reporting that they are satisfied, which means that less than 50% of the companies are happy with their provider.\u00a0 For the remaining 56% of companies, 31% indicated they were neutral, and 25% indicated they were not satisfied. \u00a0<\/p>\r\n\r\n\r\n\r\n

\"overall<\/figure>\r\n\r\n\r\n\r\n

The following are some of the comments added by members:<\/p>\r\n\r\n\r\n\r\n