Outsourcing HR & Payroll: Questions For Companies To Ask #SHRM19


One thing becomes apparent when you step in the expo hall at Annual SHRM: the number of HR & Payroll outsourcing solutions is overwhelming. There’s over 1,289 HCM companies listed in SHRM’s vendor directory, and many of those companies seem to be here. 

There’s big booths with character artists, small booths with the facts, medium sized booths competing amongst the noise. Fortunately, I had the chance to stop by a few of those booths to get insights into effectively outsourcing HR and payroll in 2019. What are the questions that you - as an HR professional - should be asking yourself about HR & Payroll outsourcing?

Pull up a seat, here’s some of the conversations taking place in Las Vegas at #SHRM19. 

What are your key objectives? 

We find that the most important part of outsourcing HR services is really understanding the business problem and key objectives the HR team is trying to solve. There are so many options and solutions available - doing a thorough review of success metrics and having a partner who can help get you there through technology and expertise is critical. 

  • Adrian Van Haaften, Chief Marketing Officer, Paycor 

Which processes can be improved? 

What HR professionals should understand about HCM, in general, is this…just because you have a solution, doesn’t mean it’s the best one for you. We understand the “if it ain’t broke, don’t fix it” motto, but oftentimes people don’t realize that things are broken until something goes wrong. When HR professionals spend more time doing manual work and playing catch up instead of focusing on their people, it’s time to rethink how things are done. The only way to know is by evaluating new providers and being open to hearing where processes can be improved upon.

What are your business needs? 

Whether you’re implementing HR software for the first time or just switching providers, start by considering business needs. Ask yourself what product features and services are must-haves based on your headcount, office locations, and employee classifications. For example, is your workforce largely non-exempt? You’ll want to focus on vendors that include a built-in time and attendance module. Do you have international employees? Consider solutions that can either handle international payroll or integrate with the right third-party vendors.

As you evaluate different solutions, it’s easy to just focus on your experience as an HR administrator. Don’t forget your employees’ experience, too. After all, what point is having a great payroll and HR system if none of your employees want to use it? It may be worthwhile to invite members from outside your team on a demo call to get their take.

  • Lyssa Test, Sr. Content Specialist, Namely

Where do you specialize? 

Initially, I would ask if the outsourcing company specializes in any industry. If so, what are some of the specific attributes of their software that cater to that industry? Also ask for a list of existing Clients. 

For growing businesses, does your current software/vendor have technology in place to support your initiatives?

I would inquire about service metrics both in terms of customer service and integration capabilities with outside vendors.  How many clients do account managers typically handle? What is the average level of tenure and experience for your account managers? Which vendors do you currently integrate with, and what are your capabilities to establish custom integrations ad-hoc?

Are there employees outside of the U.S.? 

Global payroll is VERY different than payroll in the US. There are many statutory requirements for employees overseas that we do not have here in the U.S., so it is not “one-size-fits-all” when it comes to global payroll. Companies must be aware of every regulation related to employee payroll, tax, benefits, and pensions in order to stay compliant in each country. Without a single platform for global payroll, companies can easily miss payroll errors, fraud, or compliance problems that can multiply very quickly. 

What kind of customer service does the provider offer?

When evaluating HR and payroll software, beyond actual software capabilities a good area to evaluate is service.

What kind of customer service does the provider offer? Is live service available 24/7—and do you need to pay extra for it? Premium service should be an essential offering, not a luxury you pay for.

Customer service can be measured by the customer retention rate. A good software provider will have the number at hand and be eager to tell you—it’s evidence that it’s making customers happy. 

  • Michelle Lanter Smith, Chief Marketing Officer at EPAY Systems

Does automation align with my business systems? 

HR and payroll practices play a key role in employee engagement and retention, so finding partners and systems you can trust is absolutely critical. As we see continued trends like remote workforces and the Gig Economy – along with new legislation aimed at providing better protection for today's employees – the complexity and challenges we see today will only increase over time.

Companies should first prioritize solutions that 1) enable automation and allow secure interfaces with the business systems you use today or will use in the future; and 2) align with the lifestyle of today's workforce and provide the flexibility needed to address rapidly changing needs. From last-minute shift changes, to time off-requests and callouts, being able to respond quickly, yet transparently, is essential.

Because of the complexities involved with payroll, in particular, ensuring tight integration and fluid exchange of data between systems is also key for avoiding critical errors that can result in costly fines, or worse, delayed or inaccurate payment to employees for their work.

Interested in learning more about outsourcing HR and payroll? Review SHRM’s vendor directory of HCM / Technology companies, or jump in the conversation on social media by following SHRM.





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