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By Dianne Rudolph

Topics: Payroll


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Many HR managers and small business owners agree that partnering with a third-party vendor for payroll processing is a good idea. Payroll can be a time-consuming task for your HR team. It can sometimes be more complex than it first appears to be, and your busy staff could end up spending much more time on it than they really have time for.

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By sending your payroll to a third-party provider, you’re hoping to free up your HR team’s time and allow them to focus on the tasks that are truly important. You can save time and sometimes money too.

Not every payroll provider will be able to give your business all these advantages. In some cases, switching payroll providers could actually improve your bottom line.

Reasons for Resistance

When HR managers hear someone suggest they should switch payroll providers, many immediately shut down the idea. They’re concerned, and often for a number of good reasons. You may believe you’re getting the best price or service with your current provider. You may worry about the costs associated with switching.

Switching payroll providers used to involve quite a bit of paperwork. In turn, making a switch was something people rarely did. It took time, effort, and money to complete. Nowadays, however, payroll software and human capital management solutions are changing the story. They reduce time and paperwork, making switching much simpler than it was in the past.

With many of the barriers to switching removed, you should feel confident in changing payroll providers.

Getting a Better Price

The first way switching payroll providers can boost your bottom line is by offering you a better price for the services you need and want. This reduces your overhead and your costs. In turn, your bottom line might look a little nicer at the end of the month or the end of the year.

Be sure to shop around and see if the provider you’re currently with is truly offering you the best value. Also, beware of vendors who lure you in with promises of better pricing for the first few months of your contract. If you’re not truly getting a better price, then switching may not make sense.

Reducing Errors

How else can switching payroll providers boost your bottom line? A different payroll provider may be able to help you reduce the number of errors in your payroll.

Payroll errors are more common than you may think. They can also come with hefty penalties from the IRS. The longer they take to sort out, the more time and effort your staff must put into solving them, and the higher the costs associated with fixing the issue.

Reducing the number of errors could help you avoid penalties and audits. Having accurate payroll goes beyond these benefits as well.

Lowering Turnover

You may not think there’s a direct connection between payroll and turnover among your employees. If there are always problems with payroll, however, your employees may decide to search for another job.

While one late check isn’t likely going to see your employees heading for greener pastures, a string of errors or problems could eventually have them turning in their resignation notices. Fewer errors in your payroll can reduce employee dissatisfaction. Another payroll provider may also help you deliver an employee self-service portal or direct deposit for your payroll. Both these features improve employee satisfaction.

Will a Switch Really Help?

Reading through these advantages, you may wonder if switching payroll providers will truly help you boost your bottom line. The answer is yes, provided the new partner is truly offering a superior service.

Reducing errors, adding employee self-service options, and getting more value for the services you need maybe won’t make or break your fiscal year. As you know, though, when it comes to the bottom line, a little can go a long way.


Dianne Rudolph

Dianne is the Vice President of Sales and Marketing at Paymedia, LLC. She has a demonstrated history of working in the management consulting industry. Skilled in crisis management, business planning, customer acquisition, and coaching, she is a strong sales professional with 25 years of experience in the payroll industry. Through Paymedia, she offers clients results through iSolved, a platform that meets their needs today and that they won’t outgrow tomorrow. With five years' experience as an entrepreneur, Dianne has also taught herself how to launch and manage a successful business from the ground up. She lives has two grown children. As an empty nester, it gives Dianne time to pay it forward in her free time. Her mission is to help and give back. Her true inner peace is found at the beach and through yoga and massage.

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