Payroll is one of the critical functions of any organisation, which is why many businesses are on-the-fence about outsourcing it to a specialist. Managing the payroll process can be complicated and time-consuming for recruitment agencies. Furthermore, the presence of a whole raft of legislation makes it vulnerable to several serious risks.
To keep on top of the payroll function, recruitment agencies need to regularly upgrade their technology, build & maintain in-house expertise, and hire new staff. However, in most cases, it is not feasible for a business, especially a recruitment agency, to devote enough time and money to its payroll function.
In such a scenario, it’s a smart move to partner with one of the top recruitment payroll providers.
Why outsource the payroll process?
There are numerous benefits to outsourcing the pay & bill function to a specialist. Some of them include:
- Save time: It’s a known fact that the pay & bill process is extremely time-consuming. Additionally, manual processing of timesheets or lack of process optimisation can lead to significant errors. This is where a specialist comes in! A dedicated and reliable payroll specialist can help your business to streamline the process and deliver reliably, which in turn enables you to devote more time to more strategic endeavours.
- Say goodbye to staffing issues: It’s difficult to find pay & bill specialists, and things get tougher when it comes to retaining them. Skills shortage is a persistent problem for finance leaders in the recruitment space. The combination of high attrition rates, difficulty of training new staff and rise in the volume of timesheets also makes life difficult for CFOs and FDs in this space. With outsourced pay & bill services, you are guaranteed staffing continuity plus scalable teams.
- Accurate payroll processing: Manual processing of time sheets can lead to errors, and more the number of timesheets, greater is the risk of error. A recruitment payroll specialist will have the people, processes and systems to deliver with a high level of accuracy, while also meeting deadlines. You can set the expectations and document the process via SLAs and KPIs right at the beginning of your partnership. For instance, we at QX typically deliver 99.8% accuracy in timesheet processing and often exceeds this.
- Expert knowledge: It can be challenging to constantly stay on top of legislative changes and the employment status of temporary workers, especially when it comes to recruitment payroll. By outsourcing your payroll function to a specialist company like QX, you’ll have a team of experts who will deal with worker queries and status to ensure full UK compliance.
- Dedicated service: When you outsource your payroll processes to a specialist, you will have a dedicated pay & bill team working on your behalf.
- Digitisation, automation and process improvement: Do you want to streamline your bill & pay process and implement better software systems? If so, it’s a good idea to partner with a renowned payroll outsourcing company. Such service providers work with all major payroll software and their teams are trained to understand legislative changes and maintain compliance with UK laws. They also understand how the recruitment sector works and can bring best practices and optimised workflows to your payroll process.
- Lowered costs: Last but not the least, outsourcing your pay & bill to a specialist can often reduce the cost of operations by up to 50%. However, it’s key that you choose the right partner who can deliver both cost savings and overall efficiency.
Which payroll functions can be outsourced?
Based on your firm’s requirements, you can customise the payroll process according to your needs. Some of the functions that are typically outsourced to specialists include:
- Timesheet Processing
- IR35 Deemed payroll
- Weekly/monthly payroll
- Statutory deductions
- Customised payroll reports
- RTI submission and statutory compliance
- NHS Direct Engagement
Pros & Cons of outsourcing your payroll process
Let’s quickly take a look at some of the pros:
- Lower back-office operating costs: It can be expensive to set up, maintain, and expand an in-house payroll operations team. Not only is it time-consuming to process hundreds of thousands of timesheets every week, it also requires a lot of effort and attention to detail.Our clients have reduced up to 50% of payroll processing costs by outsourcing payroll to QXFA and enjoyed 99.8% accuracy. With the payroll operations taken care of, your staff can better utilise their time to focus on higher-yield activities.
- Enhance customer experience: It can be stressful to deal with payroll-related mistakes and late or incorrect payments. Payroll specialists can ensure that the process is streamlined, efficient, and error-free. Additionally, when you partner with an offshore company that specialises in UK payroll, you get access to the combined knowledge, infrastructure and technology knowhow of a large organisation. Furthermore, a specialist who’s well-trained in resolving queries from clients and workers will also deliver a superb customer experience.
- Benefit from best practices: When it comes to recruitment agencies, more often, in-house teams lack the technology, processes and training required to deliver accurate and speedy processing. On the flip side, payroll specialists invest in automation, process improvement, best practices and staff training. Therefore, you’ll benefit from best practices and high standards of service when you partner with a specialist.
- Access to excellent security: Recruitment payroll specialists often have powerful firewalls and IT security measures in place to guard against cybercrime. Furthermore, their staff are usually trained to detect and prevent online or other fraud. For example, QX invests a significant amount in IT infrastructure for storing and sharing data securely, and we are a certified GDPR compliant company.
- Improve compliance: Staying on top of frequent legislative changes made by HMRC is not easy. This requires a deep understanding of UK laws, remembering various due-dates, and responding rapidly to any changes in the law. A specialist is well versed with UK compliance laws and always up-to-date with any changes made by HMRC.
- Focus on growth: Payroll operations can place significant administrative burden on your accounting department. So, hiring a specialist can enable you to be free of any worries and hassles related to payroll. Once the specialist partner takes over the payroll process, your business can focus on strategies and initiatives that support your growth.
It’s equally important to be aware of the cons of outsourcing your payroll process. Some of the cons include:
- Unreliability: It can be risky if you outsource your payroll processes to companies that do not have the required experience or expertise. Therefore, it’s important to do your research and choose the right partner for your agency. With the right partner, you’ll be able to function efficiently and reduce errors.
- Risk to confidential data: When you hand over your payroll processes to a specialist, you’re exposing your financial records, thereby leaving your company vulnerable to lawsuits. This is one of the prime reasons why you should choose a trusted and certified GDPR compliant partner like QX to aid with your payroll operations.
Finding the right partner
How can recruitment agencies ensure payroll outsourcing delivers on its promises? The trick is to find a partner that runs your back-office with a front-office mentality.
Look for a partner that checks the following boxes:
- Specialisation in agency pay & bill: Payroll processing is a difficult task, more so if it’s for a recruitment agency. With high volumes and stringent compliance requirements, it can be difficult for agencies to run and operate a streamlined process. A specialist with an in-depth understanding of how the industry works and the technical knowhow to deal with the various HMRC legislation can enable your business to not only improve its payroll operations but also enhance it further.
- Proven track record of success: Not all pay & bill specialists are prepared for the volume of timesheets and processes that come with recruitment payroll processing. Therefore, you must look for partners with experience in the recruitment sector. Get to know their strength areas and whether they focus solely on recruitment pay & bill. Find out how many timesheets they process annually and their rate of accuracy. Check whether they are good at transitioning/migrating the process. Also, understand the benefits they can deliver and what they have already delivered to existing clients.
- Technology and automation: Although most recruitment agency leaders are aware of the need to digitise and automate their processes, they often do not have the bandwidth to take on such a mammoth task. Incorrect payments, delays in payments, and missed payments are quite common due to manual, paper-based processes. A payroll specialist is often up-to-date with the latest software and is also ahead of the automation curve. This makes it easier to identify and implement automation at each relevant step of the process.
How would you rate your payroll operations?
Are your payroll operations world-class? Merely excellent? Average? Sub-par?
As one of the leading high-volume pay & bill providers for the recruitment industry in the UK and EU, we run a tight ship. Annually, we process over 1.5M timesheets with an average accuracy rate of 99.8%. Not only have our services helped many of the leading recruitment agencies to streamline their payroll processes, but we have also helped them save up to 50% on operations costs. Here’s an example: How an agency saved over 6.5 million pounds by partnering with QX.
To learn more about how agencies can achieve payroll operational excellence, please get in touch with us.
Originally published Jun 21, 2021 02:06:20, updated Dec 08 2021
Topics: Pay & bill Process
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