ADP: The Payroll Pay-Off
Outsourcing the payroll function has become increasingly popular, and is widely seen as best practice for companies of all sizes. Efficiency gains have been well documented, but as Anish Rajparia tells Jim Banks, service providers are now looking to take their services to the next level.
Many companies have investigated the possibility of outsourcing their payroll function, as they look to focus on their core business. Payroll can be an expensive process to maintain in-house, and it is increasingly difficult to attract HR and payroll experts.
Add to this the complexity and the many legislative challenges facing payroll – not to mention the cost savings that competing firms may have realised through engaging a payroll services provider – and you have an argument for payroll outsourcing that would be compelling to almost any organisation.
Anish Rajparia, president of ADP Employer Services Europe, says: 'We see a big trend towards the globalisation and centralisation of payroll activities, driven by the need for consistency of processes and information.'
‘Lastly, compliance is also an issue, especially for larger companies, both globally and locally.’
SINGLE SOURCE SOLUTION
ADP has over 50 years' experience delivering payroll services to the private sector, from traditional payroll bureau provision, to managed payroll and HR administration.
Already a leader in its field, ADP has launched its GlobalView offering, which offers clients a proven single-source human resources outsourcing solution to manage risk and compliance on a global basis.
'GlobalView is based on the SAP solution for Human Capital Management combined with ADP's best practices' says Rajparia.'It streamlines the number of vendors in the payroll and HR function and improves transparency. Its benefits depend on the business case for each company, but usually it can deliver cost savings of 25–30% compared with how companies currently handle payroll.'
'For smaller companies, the benefits come in different forms, but they tend to centre around having fewer people in-house and improving efficiency. have a strong view that it doesn't make sense to keep payroll in-house. In many countries it is already one of the most highly outsourced functions,' he adds.
TIME FOR ACTION
For some companies, switching to outsourced payroll may not be timely. It would be problematic, for example, if a company had just installed new HR software, which it would still prefer to amortise. In the long run, however, Rajparia believes that it will be very hard to justify a complex in-house payroll function that occupies too many people for too long.
He believes that there is no reason to hesitate, and that companies need not fear disruption to their processes.
'We find that it is an easy function to outsource. Vendors, suppliers and partners for these services are well developed and provide a good level of service. They can help companies free-up payroll people so that they contribute elsewhere in the organisation,' he says.
Service providers such as ADP are now looking to enhance the sophistication of their services to differentiate themselves further in a competitive market.
'We are increasingly focused on managed services and payroll business process outsourcing, taking the whole process and checking all the data, then following it through right to the physical delivery of the payslip and payment to third parties' says Rajparia.
'We want to offer end-to-end service. We also want to extend our services as a global provider, through a single contract and pricing format, to companies in more of the countries in which they operate. Many companies begin to have a multi-country focus.'
ADP has also developed services linking its traditional payroll focus to other HR functions and also to time management systems. 'That way we can move the workforce towards processes such as planning and then integrate that into the payroll function. becomes more about employee data management,' says Rajparia.
There are no longer any excuses not to at least evaluate payroll outsourcing.