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You’ve made the decision to outsource your payroll — great! Now you’re wondering “what next?”. In this article we explore some key considerations you will need to make when picking the right provider for your business. 

Payroll may well be the most sensitive business activity you undertake. Who you trust with your payroll is a decision not to be taken lightly. 

Payroll and employee data

One of the most common reasons why employers prefer to keep payroll in-house is that it deals with highly personal information. In addition, salary expenditure itself often accounts for more than 60% of a company’s revenue, meaning that the consequences of getting payroll wrong can be huge. 

Data sensitivity means the most important ingredient for outsourcing payroll is trust. Trust that the provider knows what they are doing, offers great customer service, understands the local legal environment and — most crucially — has the expertise to manage your account. 

The trust factor also applies to protecting your company’s precious data, such as employee tax numbers, home addresses and salary information. A good payroll provider will offer a high level of cybersecurity and use best practice when working with sensitive data. This will mitigate the chances of your data slipping through the cracks or walking out the door after a breach. 

Local regulatory compliance

In 2018, the European Union’s GDPR (General Data Protection Regulation) added a layer of standardisation to security protocols by regulating how employee data should be stored. While the GDPR isn’t a globally enforced law, it shows how seriously the matter is taken. 

Local regulatory compliance is more important than global regulations. After all, local laws have real consequences if they are flouted. Your payroll outsourcing provider should know all the relevant and current regulations and have the expertise to comply with those laws not just in your home country, but in every jurisdiction to which you intend to expand. 

Business growth

Which brings us to the next point. How fast does your business expect to grow? Will the mix of your staff continue to be part-time and full-time, or will you soon be hiring contractors? Do you expect to open new offices in different states and regions?  

These questions are important to ask now because your payroll provider must be able to grow with your business. A smaller payroll outsourcer could be a cheap option when your business is in its infancy. But if that provider can’t handle a quick jump in staff size or business complexity, then you may need to find a new outsourcer. And this could cost you more money than you’ve saved. 

A good provider will offer a plug-and-play system to homogenise your payroll processes and avoid the need to reinvent the wheel — no matter your plans. 

 


 

Affinity manages end-to-end payroll operations for organisations with 200+ employees across Australia and New Zealand. Our services range from processing pays, to superannuation clearing, to award management. Our world-leading technology delivers employee self-service and manager dashboards, while our team of payroll experts provides both helpdesk and direct staff support. Our managed payroll services help organisations cope with the complex demands of today’s digital world.