Accurate, smooth
running payroll systems are essential to the day-to-day-running of a business
and business leaders have a natural reticence to them being outsourced Chris
Els, Managing Director, Accero asks why?

The perception has been that outsourcing
meant shifting the responsibility of processing what was considered no more
than a transactional task. Payroll was also considered a finance function that
had transitioned over to the Human Resource department simply because to run
successfully, fundamental employee detail had to be maintained and there was no
better place than HR to capture this data accurately.

Indeed, in the past, outsourcing the transactional
responsibility of a compliant payroll was serviced by payroll bureaus or, for
larger organisations, a BPO partner who could typically TUPE payroll and or HR
administrations teams across. Yet recently it has become clear that attentive
people management via the HR business function could give organisations a
strategic advantage. Software vendors started developing tools to support this strategic
vision, bringing focus on multiple talent management disciplines and bridging
functions such as T&A. This brought payroll systems back into focus, a core
function that could offer a secure and pivotal role in connecting all HR
functions. However, mixing these complex transactional functions with strategic
HR workflows placed a strain on system performance and reliability. The need to
balance performance with functional richness meant a compromise had to be
accepted.

But now, with the rapid advancement of technology, companies
can realise huge cost savings in terms of outsourcing system support and IT
infrastructure. Partnering with best in class payroll software providers can
allow multiple levels of control depending on data security and cost requirements,
particularly for medium sized organisations. Larger organisations, who may have
groups of employees under varied terms and conditions of employment face
different challenges and need considerably more capability than standard
integrated systems can offer.

A new concept of integration is emerging – systems with a
high degree of interoperability! Delivered from secure SaaS data centres, huge
savings can be realised by minimising risk whilst optimising internal processes
and system performance. It is now possible to avoid making an all or nothing
decision when it comes to outsourcing payroll. Retaining control in-house
whilst placing the support and availability of the underlying technology to an
expert partner can secure both cost savings and competitive advantage.

A principal benefit of this – as well as reassurance for the
HR and payroll teams – is that by outsourcing some of the key technical
functions the HR department has more capacity to work with employees directly
rather than dealing with technical issues surrounding payroll software. Through
intelligent configuration of what a company needs to retain and what they feel
comfortable outsourcing, the team can reorganise its day-to-day workload to
concentrate on tasks that fundamentally strengthen the departments
understanding of, and interaction with employees – a benefit double whammy!

The ability to interrogate data and retrieve crucial
information from multiple data sources is the other selling point that has made
this option so invaluable to so many businesses. HR systems are full of
valuable data. Connecting with relevant data held on other systems outside the
core payroll and HR system offers invaluable strategic insight to HR management
without compromising either data security or payroll processing performance.
Accessing and analysing this information correctly is crucial for companies
wanting to gain valuable insights and strategic opportunities for their
business. A blended, bespoke approach also helps companies lessen the risk of
fraud by maintaining payroll data in a controlled, protected environment, while
allowing easy access for real time business insight. In this third way between
outsourcing and in-house, the HR team retains access and control over
employees’ personal data, controlling access to the outsourcing function for
insight and analysis. By keeping these systems in-house, businesses can be
assured of security and minimise the risk of confidential data being viewed or
stolen from potentially less secure environments.

Last but not least there is the longevity of a scalable
system that should make this a viable option for any business. The constant
changes in regulation and legislation, plus the need for workforce analytics to
be produced ever more quickly have created something of a headache for many HR
departments. Keeping on top of tax rate changes and varying employee numbers,
while ensuring data is accurate and compliant with legal requirements can be an
extreme hassle but technology has come to the rescue here too, with new systems
malleable enough to be easily updated. With flexible payroll software that is
robust enough to adjust to these changes, companies can retain their already
proven and integrated processes without having to be concerned with the
platform their data is harbored within.

Essentially nowadays there isn’t a yes or no option to
outsourcing of HR functions. Fast moving technological innovations have given
us advanced and sophisticated tools that allow companies to tailor the parts of
a company’s operations they want to outsource and those they don’t. With this
choice also comes security and cost efficiency – a ‘best of both worlds’ option
that should appeal to even the most skeptical of HR directors.