According to YouGov, close to 70% of UK organisations manage their payroll inhouse, and research suggests that this number is growing. Given that outsourced payroll services have been available for decades, and inhouse expertise comes at a cost, why is it that so many organisations prefer to manage their payroll inhouse?
Flexibility over last-minute changes
First and foremost is probably flexibility. By managing payroll inhouse you stay in control of the whole process, right up to the moment that the payments are authorised. Any last-minute increases or decreases to headcount, salaries, benefits, bonuses and other information, can all be easily processed without having to work around the availability of an external payroll provider.
It does, of course, rely on having enough people and expertise inhouse to cover for unexpected last-minute adjustments, but for organisations that need to accommodate change fast, managing payroll inhouse has a lot to recommend it.
Having access to inhouse payroll data whenever you need it can be enormously valuable. For example, being able to compare reports month by month means that it’s easier to check the accuracy of payroll data, so you can resolve anomalies quickly.
And, with most modern inhouse payroll systems supporting secure data exchange, having payroll data at your fingertips means updating accounting systems and generating management reports is generally easier, too.
The technology makes it simpler
Where an inhouse payroll system is integrated with a core HR system, a lot of the administrative overhead associated with payroll processing goes away. Updating employment status, working hours or bank details only needs to happen once; pension status is easier to confirm; up-to-date tax codes dynamically pulled through from HMRC and applied to salary calculations; and necessary checks, like validating NI numbers, simplified. Data duplication is avoided and mistakes are less likely to be made.
You still need payroll expertise to ensure payroll runs smoothly; that never goes away. But integrated software takes away the tedious and time-consuming data updating and validation tasks that so often get in the way of effective payroll processing.
More control over personal data
The General Data Protection Regulation (GDPR) makes it more important than ever that you know who has your employees’ personal data, how they are securing it, and where it might be at risk.
Bringing payroll inhouse, and securing it in your own software, can give you greater confidence about the safety of your personal data.
Better employee self-service
With modern Cloud HR and payroll software, secure online self-service is a given. You’ll be able to provide employees with 24/7 access to make updates, such as changes to bank details. It’s the perfect way to make payroll more efficient and improve employee engagement.
To read more about how Cloud software can modernise your payroll processes and its many benefits, click here.