In recent years HR headlines have focused on all the big-ticket items the function has to contend with. And rightly so!
It’s very exciting – and well deserved – that people practitioners are more widely involved in business strategic discussions, working closely with executives about how to best recruit, retain, manage and engage a workforce for sustainable organisational success.
Yet, behind the headlines, HR teams are still responsible for vital administrative work that makes the day-to-day of looking after the valuable people component of a company tick. From ensuring legal compliance across multiple areas, updating necessary documentation and storing it correctly, to making sure managers and employees have access to, and are trained in, company policies and, perhaps most importantly, making sure pay runs go off without a hitch.
Yet, with HR responsibilities growing ever larger, many HR functions are looking to create efficiencies wherever feasibly possible – and this is where the topic of outsourced solutions are becoming central to that conversation.
However, when it comes to considering outsourcing payroll to a managed service there can, understandably, be trepidation.
Pay and payroll are central and sensitive issues
Pay is a sensitive issue — and it doesn’t just include getting the monetary figures right when pay runs to go off. There are reporting and legal frameworks to adhere to, personal data protection to consider, and pay data accessibility issues, too, with employees increasingly wanting to access pay data in the same way they’d do personal online banking.
Understandably, HR teams will also want to retain some sense of control and oversight over that function. As such, the stakes are high — received payroll wisdom is employers only get two chances to make mistakes before employee trust breaks down and 2022 Mercer research showcases that it’s the single number one important issue for employees — so it makes sense that HR practitioners get in the know before making the move.
To help, Cezanne HR has compiled a list of the top things a managed payroll service needs to deliver for HR, so they know what to look for should they make the leap.
Read on to find out more.
1. Compliance and security
Pay data, as previously mentioned, is extremely sensitive. Within it are birth dates, addresses, national insurance numbers and bank account details. Lose it to security breaches, and it can be used by criminals to, in worst-case scenarios, take out loans and mortgages in your employees’ name and leave them open to being accused of financial crimes themselves.
For the employer, losing employee data not only threatens employees getting paid on time — something which drove one of the most contentious HR stories of 2022 — but hurts the employer’s standing and brand as well as employee relations and trust and could land, under GDPR, organisations with a fine of up to €10 million or 2% of its global turnover.
As such, choosing a managed payroll provider that takes compliance seriously is a must. Employers must look for providers, as Cezanne HR’s smart managed payroll solution does, that are GDPR compliant, offer secure sign ons which easily integrate with other systems (such as Office 365), and can prove that they centre data encryption, securely protect passwords, and regular penetration test their software by an independent third party.
Here, looking out for ISO27001-certified payroll and HR provisions is a must. It means that the provider has adopted policies, procedures and processes that take data security seriously. It’s a tough standard that has risk management and updating security at its core.
Furthermore, HR should look for providers to help them efficiently comply with statutory payroll reporting to ease their own burdens, such as RTI submissions and end-of-year processing.
2. Payment set-up ease and pay run flexibility
There’s no getting around it. If you’re considering a managed payroll service, it’s likely because your HR team needs to free up resource — and is thinking about getting the additional utility outsourcing can provide.
Yet if you’re looking to free up time for your people team the last thing you need is a lengthy implementation process that leaves you confused, feeling like you’re lacking control, and not understanding what service you’re purchasing.
The best-managed payroll provision won’t do this. For example, at Cezanne HR when you set up our core HR system, of which our smart managed payroll solution is a part of, we’ll smooth implementation from the get-go, undertake the key data uploads for you, and smoothly guide any updates. What’s more, with Cezanne HR’s managed payroll, as it is part of the wider HRIS, important data can be easily transferred into the pay module. Another time saver for hard-working HR teams.
In addition, the best managed payroll providers will set up PAYE schemes, create journal files for General Ledger imports, automatically calculate statutory payments and reports (P11s to pensions) and liaise with HRMC. They’ll also check employee bank details are correct.
Finally, they’ll also allow multiple payroll runs and allow flexibility, whether that’s monthly, every four weeks, fortnightly, or weekly pay runs to different companies and to different schedules.
Payroll utility at its finest!
3. Data, data, data
Whilst all this flexibility and outsourced processing sounds great, some in-house and payroll practitioners might be feeling worried that this will take them out of a very sensitive process without any oversight or ability to make changes.
The best managed payroll providers won’t let this happen. If the managed payroll service is a modular part of a broader HRIS, then HR can access data as they would any other service, such as recruitment or time tracking. Cezanne HR’s smart managed payroll service also allows HR to see pay data in real-time before pay runs go off. In addition, a responsive customer support team should be on hand to answer questions or solve issues at any point. It’s worth checking if any provider offers this.
And, because consumer-grade workplace technology experiences are increasingly what employees want, with right the managed payroll provider HR will be able to give employees access to all of their digital payslips when and where they want. Not forgetting, that this should all be secure.
4. Personalisation — with no cost to accuracy
On an economic and business landscape where costs are being scrutinised to a high degree, it’s important for HR to be able to acquire the systems they need at a price point that makes sense.
Agreeing to a managed service shouldn’t mean agreeing to pay for lots of different tech elements that you don’t need. Ideally, you should look for a personlised payroll service to fit your specific requirements.
Cezanne HR’s offering allows customers to agree to the managed payroll service without having to agree to extras, such as recruitment, time tracking or absence management — although these can be added down the line if they’re needed.
HR should also look for providers that only charge for services rendered for the number of employees currently at their organisation and that won’t charge extra for data storage.
Yet, being able to adapt a service to your business’s immediate needs shouldn’t come at a cost to accuracy. This means HR should look for managed service providers that allow HR to see payroll data in real-time, raise queries with the provider whenever they need, and have a track record of making all needed deductions and necessary reports — from maternity and sick leave, to end of employment reports.
Ideally, you should consider an integrated HR system, such as Cezanne HR, that synthesises data inputs across HR modules, reducing the risk of inaccuracies and the need for double data entry.