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outsource_or_in_housePayroll and HR Department - Outsourced or In-House? 

In the current economic climate payroll and HR departments are faced with very difficult decisions as more and more businesses are reducing budgets and implementing other financial savings.  Managers, especially those in non profit making departments such as payroll, HR and finance are faced with increasing difficulties in providing a service as cost effective and efficient as possible whilst maintaining full control of the service. 

 

The choice a company faces is whether to keep full administration and management of the operational payroll and HR service in house, or outsource all or part of the service.

Eira Consulting can support you in reaching the decision that fits your team best. Either sufficient cost savings could be made to justify keeping your payroll team in-house or the organisation could be supported in outsourcing the payroll and HR functions. Outsourcing can be a fully managed service or partly outsourced with a bureau or hosted solution.

Different payroll and HR solutions:

It’s vital to remember the key objectives of a payroll and HR department and to make sure that the process you choose meets the following objectives:

For a small organisation all the above objectives could be met by a manual system. The system used by an organisation depends greatly on the number of staff and whether an in-house IT division/department is available.

The in-house system has often been in use for many years and is usually written and supported by specialist IT staff within the company. The statutory updates occur on an annual basis. These types of systems often use older technology and the cost of upgrading is great.

Stand-alone systems are usually utilised by companies who have a small number of employees. These are normally off-the-shelf payroll packages, updated regularly with statutory updates but provide few self service modules. They seldom utilise modern technology.

Packaged payroll software can be bought and supported either on your company’s computer system or hosted by the provider. These systems usually utilise up-to-date technology and are used by a wide range of companies. Software is usually maintained by the provider and updated regularly.

Bureau systems are another alternative for those companies who want to keep the control of the payroll input and management in-house, but want to reduce the risk of supporting the software and computer systems.

A fully outsourced system is an option for companies who would prefer to concentrate on their core activities and developing their business.

Such a system replaces the need to have payroll specialists in-house, which has become more of a requirement in recent years due to the increasing complexity of payroll legislation. Costs are also more manageable as the company would know years in advance how much it will cost to provide and support the payroll function. Companies who choose this usually pay a monthly fee with no hidden extras.

If it’s time for you to review your payroll system, it’s more than likely the right time to search the market and see what other integrated systems are available. Should your payroll system link directly with HR and/or finance and other systems? There are many integrated systems available and much has been written about systems that save companies money and improve efficiencies.

You may have heard jargon used in the industry press and websites and wondered what some of it means? There are systems such as ERP (enterprise resource planning) and HCM (human capital management, which is sometimes known as HRM, human resource management), that may be available to the larger organisations but what can these systems offer you and are they worth considering?

Eira Consulting can provide a full ‘Delivery Model’ based on your specific requirements which will ensure your requirements are documented from the start, for a smooth evaluation, implementation and go-live. We can also provide support throughout the decision making process, project or programme manage the process for you and support you with specialist payroll and HR expertise throughout the implementation and go-live.