3 recruitment payroll outsourcing issues & actionable steps

Among the various aspects that any small or large recruitment agency sees as an organisational challenge, pay & bill is at the top of the list. This can be attributed to the fact that this department contributes to operational efficiencies, is data intensive, and has many diverse complexities.

Think in the terms of providing the due compensation to the employees in exchange for their services within a set timeframe. Think in terms of handling a large volume of data that needs to be processed while juggling other equally important tasks at the same time.

Sounds like a problem too familiar?

Enter payroll outsourcing services – a solution that enterprises look up to when they need to delegate the task of payroll services especially for distributed locations. About 12% of global organizations completely outsourced their payroll in 2019, which means payroll outsourcing must be doing something right. We count many of the top recruitment agencies in the UK as our clients – some of the most successful agencies choose to outsource their pay & bill to India.

This process assists in maintaining compliance, reduces business costs and improves overall efficiencies. And yet, there are recruitment payroll outsourcing issues that the firms face on a regular basis.

What are these issues and what is their solution? Let’s look for an answer:

1) Lack of experienced staff

More often than not, the staff at some outsourcing firms is not experienced enough to handle bulk orders from clients. Alternatively, they may not be prepared enough to take care of specific business needs, leading to poor performance overall. This compromise on the quality aspect of payroll services can lead to a plethora of mistakes that can hamper the entire process (as it needs to be redone). This back and forth causes loss of time and capital. The worst scenario is when agencies lose face in front of their employees with the latter ending up being dissatisfied.

2) Inefficient transfer of data

The thing with payroll data is that it needs to be transferred in an accurate and efficient manner. Remember, data is crucial for any business and more so, in business-critical functions. It includes a wide range of information including:

• Details about the firm, including the registration details.
• Details about both temporary and permanent employees.
• Details about any additional pay or deduction.
• Details about the new and existing clients.
• Details about placements.

Without transferring the complete data in a comprehensive error-free manner, the overall payroll process functions are thwarted. While companies can get started by educating themselves about the steps required to handle data during the whole pay and bill outsourcing process, they need to do a lot more to align seamlessly with the new scheme of things.

3) Compliance complications

Pay & Bill outsourcing services also face compliance issues – HMRC regulations keep on evolving and the industry sees a major change like the IR35 reforms every few years. For most of the recruitment payroll outsourcing firms, it becomes difficult to be aware of every law and regulation governing specific regions. This leads to costly downtime for the business and surely, they wouldn’t want to be entangled in a legal mess.

Hiring a pay & bill specialist with a staff trained in all relevant matters of compliance is a good way to mitigate risks in this area.

The way forward

With the above mentioned recruitment pay & bill outsourcing issues, how do firms still stay at the top of their game and make the most of outsourcing? Here’s how they can cope:

• Select a payroll outsourcing provider that easily adapts to the existing system or one that can help your optimise your processes.
• Do thorough research about their services and credibility.
• Know exactly what their expectations are and communicate the same with the provider.
• Have a dedicated team that coordinates with service provider’s team.
• Ensure that the staff has prior experience in handling recruitment payroll outsourcing processes.
• Ask questions viz how the data transfer will take place and how the data will be handled. Ideally, work with a GDPR compliant partner.

All in all, the firm and the recruitment pay & bill outsourcing services provider need to work hand-in-hand for better business functions. Everything should be well-defined and discussed upfront to avoid even the slightest chance of disruption or discrepancy. Since it is not a one-size-fits-all solution, businesses need to ensure that they make an informed decision by being aware of what is out there and how they can benefit in the best way possible.

Originally published Mar 14, 2020 10:03:52, updated Jan 29 2024

Topics: Pay & bill Process