Payroll: In-house vs Outsourcing

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Sam Simmons

29 November 2019

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The in-house vs outsourcing debate is one that continues to rage in organisations right across the UK. In this article, we'll show you the pros and cons of both.

 

Board and management meetings often see a constant stream of similar questions: "Should we use someone external to the company?" and "Have we got the capability or resources to do this in-house?"

 

Generally, companies choose to outsource because they want to reduce costs, focus on core functions, improve service and gain access to expert knowledge.

 

Any number of departments or functions may look to outsource; whether it be marketing for support with advertising campaigns; customer service teams in order to reinforce good practice; or a logistics team that is looking to optimise their processes, the reasons behind making the decision are often remarkably similar.

 

In the UK, one of the most commonly outsourced services is that of payroll and finance. The logic behind this makes sense; companies feel that they can save money and time by using industry experts to perform these roles.

 

In fact, this trend seems only likely to increase in the coming years.

 

 

According to a study conducted amongst the attendees at the Payroll & Reward Conference in London earlier this year, 60% of respondents who use in-house technology solutions stated that they were likely to review the technology in the next year.

 

 

 

But why would companies look to move away from in-house solutions and begin to look towards outsourcing?

 

There are numerous reasons; a significant one is likely to be that outsourcing is the "done thing" within a particular organisation. Many companies do this because they do not feel like they have experts or resources in-house or would prefer that their employees focus on their core tasks and not on things that they're not necessarily fully trained to do.

 

While this may seem reasonably sensible from the outside, the reality is that performing such tasks is often not as complicated as it may initially seem. Yet companies choose to continue outsourcing and employing experts due to their efficiency, low error-risk and their high level of service.

 

However, outsourcing does come at a price. Organisations that do this would have to consider whether the results justify the cost, or if they alleviate the burden for the in-house teams.

 

With regards to payroll, the principal reason for outsourcing is often to ensure legal compliance. While in-house technology solutions may provide support for actual payroll administration, they are often unlikely to ensure that compliance is consistently respected.

 

So what can be done about reversing this mindset? How can in-house technology solutions provide companies with the tools they require to administer their payroll efficiently and effectively as well as ensure compliance?

 

 

In-house payroll with the benefits of outsourcing

For some people, payroll can be tedious and laborious. For others, AKA - us at PayFit, it is the best thing in the world! Okay, we may be exaggerating a bit, but the point we're trying to make is that payroll is what we do best!

 

At PayFit, we offer far more than just brilliant payroll software. We consider ourselves to be an in-house software, but with all of the perks that you would receive from outsourcing. This is because our goal is to support our clients in administering and running their payroll but also ensuring that they remain fully compliant.

 

That is why we have decided to employ dedicated payroll experts within our team. These experts work within our customer success team and are always on hand to answer any payroll specific questions that you may have.

 

On top of helping our clients with individual queries, a significant part of the customer success teams role is to ensure that they stay on top of the latest payroll trends and regulations. As a result, we can provide our clients with up to date compliance and legislative changes.

 

The PayFit app is also extremely agile. Because it’s cloud-based and built using our own coding language, it only ever takes a couple of hours for the latest regulations to be updated and there is no need for software update.

 

The app is also very intuitive and users require no prior experience or expertise on payroll or compliance. If the app identifies an error, it will highlight the error and require it be amended. 

 

These support structures help ensure that our customers always receive high-level service while ensuring compliance. From our customers' point of view, it means that they can keep the control and the flexibility of running payroll in-house without having to need any specific payroll expertise.

 

If you or your colleagues are currently experiencing challenges with payroll administration, then please do feel free to book a demo with one of our products specialists. We'll be glad to show you how in-house payroll can be hassle-free.