Ask Alight: Six benefits of keeping payroll in-house

A lot is said about the advantages of oursourcing, of which there are many, but there are disadvantages too, and it’s recommended before any payroll transformation project is embarked upon to think through the pros and cons of outsourcing payroll services versus managing payroll in-house.

The main difference between in-house and outsourced payroll processing is that an in-house team is on staff and on the payroll, while an outsourced payroll provider is hired externally. The six benefits of keeping payroll in-house are as follows:

1)     Better flexibility for last-minute changes or corrections

In-house payroll offers significant flexibility over most outsourced payroll service options. Changes to payroll at the 11th hour are not uncommon. If the outsourced payroll provider doesn’t have the agility to accommodate these, a supplementary payment run can be required to accommodate changes, at a cost. Alternatively, fees are often charged to modify an existing pay run before it hits the bank.

Bonuses, changes in salary, or deductions can be made quickly and accurately, ensuring employees aren’t under- or overpaid. Furthermore, a cloud payroll system integrated with your HR software is always up to date and accurate as any changes to employee details or new starters can be automatically made.

3)    Lower total cost of payroll administration

While this is a benefit often presented by payroll outsourcing service providers, maintaining, or bringing payroll in-house can save money depending on its structure. While resources and skills will need to be allocated for training and paying in-house payroll staff, this can be more cost-effective than outsourcing.

5)     Improved Efficiency

With an in-house payroll operation, complete control is kept over report generation. This allows for pay structures, rates of pay, employee contracts, bonus, or commission plans, etc., to be tailored to the company.

An in-house payroll team can deliver a comprehensive overview of compensation and can help in workforce planning in its reporting. These can be customized precisely to changing business needs.

This benefit ties directly in with the advantage, which is integrative data. Having payroll onsite with integrative features can result in fewer duplicate entries, the ability to automatically report on information, and an overall improvement of data accuracy across the organization.

There are multiple payroll platforms and services available, including payroll advisory, deployment, and optimization open to in-house payroll teams to ensure investments in cloud payroll technology are well managed and optimized and continue to provide the accurate, real-time data necessary to make the best financial and human capital decisions for the business.