Outsourcing your payroll to a third-party provider takes a lot of trust. Yet such an important decision is quickly clouded by services subject to scope creep and accounting jargon. So what should you consider when selecting a payroll provider? Lift HCM has been managing payroll for companies across the United States since 1967. Let’s take a closer look at seven factors you should keep in mind when comparing prospective providers to manage your payroll.
When vetting your options for a payroll management provider, you should pay special attention to signs of longevity. How long has the company been in business? How long have they provided services to their existing clients?
Have they successfully weathered the storm of economic downturns like the housing market collapse in 2008 and the Covid recession? You’ll want to be sure that your payroll service provider is ready to withstand the fluctuations of the global economy without sacrificing their quality of service.
Consider the support offerings of candidates when vetting a payroll provider. How (if at all) do they charge for their support? Is their support team available during your working hours on channels you’re already using to communicate? What do reviews and client testimonials say in reference to their support staff?
Pay particular attention to the size of your payroll provider. Industry titans like ADP and Paylocity target recent college grads for account and support rep roles, looking for bright young minds they can bend to their will (anyone seen A Clockwork Orange?). It makes sense that their need to fill a larger number of roles creates a need for capable candidates. Yet, there’s always some turnover as their recruits go AWOL pursuing the next rung on the corporate ladder.
One of the strongest indicators of a trustworthy provider is the partnerships they’ve formed. Partnerships with large corporations, regardless of prestige, can be misleading. Many larger companies have partnership programs whose membership is based more on referrals and less on a partner's trustworthiness or quality of service.
Consider focusing on a prospective payroll provider’s partnerships with other small businesses for whom client reviews and perceived trust is crucial to their continued success.
Providers of payroll management services often rely on a third-party platform to facilitate their services. Think of this like an accountant using QuickBooks. When comparing your options to manage your payroll, you should take time to learn about the platform each provider uses.
Does their platform integrate with the platforms and tools used by your accountant, benefits administrator, and others with whom your payroll services might be bundled? If no integrations exist, does the platform allow for custom integrations or streamline the importing of data through a XLSX, CSV, or JSON file?
The extent to which their software is compatible with the platforms preferred by your other service providers can have a significant impact on both the total cost of these combined services as well as the ease with which you’re able to provide data to service providers regardless of whether they’re bundled in with your payroll.
Your payroll service provider needs to be able to generate tax and compliance reports without needing too much turnaround time. Their payroll management platform should allow them to do this with relative ease. You should confirm that your accountant, benefits administrator, and others both within and outside of your organization will retain access to the data they need to report to regulators, auditors, insurance providers, government agencies, and company stakeholders.
Of course, “cost” is one of the most important factors to take into consideration when choosing a payroll provider. While the base cost of payroll management services is certainly worth noting, you should pay special attention to what’s included in that cost and how ancillary costs stack up as you add supplemental or packaged services.
Make sure you add up the cost of each service included in the bundle (e.g. retirement plans, health benefits, and compliance monitoring) individually. This ensures that you’re actually receiving a discount on the service relative to the average market rate and that the discount is sizable enough to forego a search for alternative options.
Scalability is one of the most important factors to consider when choosing a payroll provider. We’ve already made the case for why midsized payroll providers are often able to offer the most benefit to a growing business. Look at the structures a prospective provider has in place to continue offering the same quality of service as you take on more employees and the complexity of your needs as a client deepens.
Do they offer support in the time zones and locations you plan on expanding to in the coming years? Will they charge you for each new employee or is their pricing fixed to a tier system based on the size of your workforce? Do they have partnerships in place to support services you anticipate needing in the future?
There’s a lot to consider when making a decision as consequential as choosing who to trust with managing your payroll. It’s okay to feel overwhelmed; you’re not alone (far from it). Lift HCM has been managing the payroll of businesses like yours since 1967. Over half a century later, we’re still standing. We’re still actively growing great relationships with clients who’ve trusted us through thick and thin.
If you’re weighing your options in search of a provider to manage your payroll, we’d like to be one of them. Contact us today to schedule a call with one of our business developers. In that call, we’ll learn about your unique needs and the challenges standing in the way of your growth. We’ll also schedule time for a demo of our own payroll management platform, iSolved. No matter who you choose, the team at Lift HCM wishes you the best in finding a provider that helps you empower your people.