In the payroll industry, there are hundreds of systems and services that companies can choose that enable them to carry out payroll operations more efficiently and effectively. Compared to manual processes, a payroll system will usually speed up payroll processes tremendously, and help to reduce human error. In theory, payroll systems allow more significant levels of control over wages and provide opportunities for faster reporting and compliance. Big software companies offering payroll systems highlight these and the numerous other benefits available – such as being able to manage payroll in different countries better. However, some companies are finding that payroll systems and services sold are not meeting their expectations.
Let us explore why this is happening…
Perhaps one of the issues is that companies seeking payroll systems are not necessarily doing their due diligence before they get started. As a result, major players in the payroll software and services space are winning contracts based on very effective marketing campaigns. Substantial investment in search engine optimisation, sharp sales teams and compelling presentations impress potential customers and win them over – often before clients really understand what the solution they need should look like. However, this is a problem because we all know that payroll is not a one-size-fits-all type of problem. Subsequently, clients are being enticed into a sales pitch, signing early and, and the system is implemented, it may well then fail to live up to over-sold expectations.
We all like to be wooed…
In getting wooed away by large providers that sell all-singing-all-dancing systems, some companies are missing out on finding systems and services solutions that may better meet their needs. There are numerous excellent providers that offer innovative solutions that are not even being considered.
Why is this?
- Is it because the smaller providers do not have the budgets to secure a coveted place on page 1 of Google?
- Perhaps it is because options provided to payroll managers are being dictated to them by HR Directors or Finance Directors who want to rely on the security of only considering a well-known or proven brand?
- Or is it just because the smaller providers are not doing enough to get noticed in the first place?
- Perhaps smaller providers are spending too much investment in product and innovation but are neglecting investment in marketing?
- Or are the larger suppliers, the major players just offering better solutions?
Whatever the reason, the problem is compounded when some businesses (or procurement departments) limit their opportunities even further by requiring that only large companies may tender for contracts – meaning that smaller players do not get a look in.
Don’t get caught out
To me, it seems illogical to engage with new payroll services or systems provider before reviewing what your requirements are. If you meet with vendors prior to getting to grips with your needs, then you leave yourself more susceptible to being wowed by amazing solutions, or notable market names that “everyone” seems to be working with but that in reality, are often failing to deliver. This leads to suboptimal solutions being implemented in relation to your specific requirements.
For example, we regularly speak to payroll managers that have been left disappointed by new solutions and to compound the issue, they have also paid way too much for aspects of solutions or services that looked great during the sales pitch but actually, are not needed at all. Every payroll is unique, and so implementing big-brand generic systems designed to suit more substantial companies may not actually be the right solution for you.
So what can be done?
To understand the root cause of the problem we need to revert back to the very beginning of the process. Expectation mismatches come about as a result of not defining project requirements thoroughly and clearly enough from the outset. After all, if you do not understand the problem you want solving, it is difficult to understand what an effective solution looks like. In addition, it is also impossible for a solution provider to know what it is you really need!
This article is not intended to lambast the established, major payroll providers. Clearly, for the right organisation,they offer fantastic solutions and they are also often at the forefront of innovation too. A quick listen to my Payroll Podcast with Anita Lettink of NGAHR will highlight this. In addition, in order to become a major player in any market, you must be doing something right. However, what I do want to emphasise is that there is more choice than many people realise and therefore, try and resist the temptation of committing to a solution as a result of a slick sales pitch too early.
Sometimes, instead of committing to the obvious, consider the underdog. An alternative solution from a lesser-known player in the payroll market may actually suit your particular payroll operation better and be more cost-effective too.
(Note: I would strongly recommend that you take a look at our free JGA Recruitment whitepaper titled: A Payroll & HR Blueprint Towards Successful Transformation as there is a lot of advice here that will help you prepare for any new payroll-related transformation project you may be considering.)
Some factors for consideration include:
Size of your payroll | Payroll Frequency and Structure | Payroll Employee Locations (UK or Global) | Compliance Requirements | Budget | Other systems used in the business that may need integrating | User Access Requirements | HRMC Approved and Compliant | Links to HMRC gateway | Self-Service Reporting | GDPR Compliant Payslip Portals | Secure delivery and data exchange | HMRC and auto-enrolment compliant | Sector Specific Solution
There are of course 101 other requirements to consider, but hopefully, this quick list will put you on the right path to success. Once you have your essentials in place, it is recommendable to try and identify suppliers that can actually meet these needs, rather than those offering generic solutions where you end up paying for more than you need. One way of doing this is searching for niche terms online to identify boutique suppliers. You could be pleasantly surprised by what you find! In doing this, you will likely identify a range of different potential suppliers and not just those that can afford a hefty SEO bill from Google each month.
For example, if you work for a healthcare provider, rather than searching for “Payroll Systems” try searching for “Healthcare Payroll Systems” and you will see new results that may be more closely aligned to your requirements.
Once you have pinpointed relevant suppliers, it is worth asking for a reference, rather than relying on testimonials published on the company’s website – though beware that there is the potential that the recommendations provided by suppliers may be getting kick-backs for positive reviews. Instead, try carrying out further searches in Google, or on appropriate forums like LinkedIn and ask for feedback from other users. You can ask for recommendations too. You will likely be surprised at how many people will be willing to help you, and you may just find the information you are looking for that will validate whether the solutions and/or systems offered are robust and fit for purpose.
In short, having your expectations met means clearly defining what those expectations are upfront. Do this, and you should be able to navigate away from falling into the trap of investing in an ineffective system or service that does not meet your needs or expectations.
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