Payroll is generally regarded as something that is to be seen but not heard. But there comes a time when it’s necessary to overhaul an existing setup. Here’s how you can go about making the case for change with the C-suite
The C-suite has many areas of focus, and it’s unlikely that payroll services are high on the list. “Payroll needs to be a silent service, so that means that there are never complaints,” says Amanda Barnden, sales manager at Ciphr. “The C-suite shouldn’t know that payroll is even happening. If nobody ever hears about payroll, that is fantastic, because it means it’s working.”
Yet for many organisations, payroll is a headache. Outdated systems can cause inefficiencies and present the risk of things going wrong or failing to comply with the law, as well as proving costly in staff time. Often HR and payroll teams know that upgrades or entirely new approaches are required. But fighting for that when the business is facing other demands can be difficult.
Depending on your preferences and needs, you can choose full or partial payroll services:
- Bureau payroll: your payroll team works with our payroll team
- Integrated HR and payroll: sync our HRIS and payroll software and enjoy the benefits of an integrated system. Payroll support can be software-only, or a bureau service – it’s up to you
- Managed payroll services: outsource your payroll needs to our team of UK-based specialists, and count on us to deliver on time, every time
Let’s dive into each of those now.
Bureau payroll
This is designed for organisations that want the benefits of efficient and accurate payroll software, without giving up full control over its operation. Maybe you have a team of established payroll professionals whose time could be freed up with more efficient software – and the support of an expert bureau team? Choosing bureau payroll will allow them to focus on other, more value-adding activities.
When you’re looking for a payroll bureau provider, you’ll need to find a partner that you can trust and is highly qualified. Our staff, for example:
- Are all members of the CIPP, and undergo annual training
- Are all based in the UK
- Are all up-to-speed with the latest changes to UK payroll and pension legislation
It also pays to look for a payroll bureau provider who offers a breadth of services, and service levels. “We do more than the typical outsourced payroll provider,” says Barnden. “Sometimes when you pick apart what an internal payroll manager might do, it’s a lot more than a standard payroll provision. Other providers will process payroll and do a payslip, but we’ll deal with pension providers; make payments to third parties like courts, unions or savings schemes; conduct reporting and compliance; and provide the right analysis to the finance team.”
This can lead to significant time savings, too. “We’ve had customers who were using spreadsheets and doing a lot of their own analysis to get to a report which just comes straight out of our system,” adds Barnden. “We save the finance team half a day or even a couple of days a month.”
It also means there’s flexibility to upgrade to a more managed solution as your business needs change. “If you’re a business leader, you need to know that you’ve got enough cover in the event that your payroll person leaves,” points out Julie Lally, managing director, payroll, at Ciphr.
Ciphr payroll software is an off-the-shelf product that can be configured to the precise needs of customers. It also features an IR35 off-payroll worker module for organisations that make use of contractors, all within an ISO accredited package.
Why Ciphr: You can rely on us to pay your people on time, every time. We make sure that at least three of our team know how to run your payroll – mitigating the risk of downtime due to absence. We’re also proud to have more than 350 combined years of payroll experience in our bureau team.
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Learn more about our payroll services, and how working with us can work for you
Integrated HR and payroll
For some organisations, it just makes sense to use an integrated HR and payroll system. The obvious benefit is that the HR system and payroll software can share information, to create a single source of truth for all employee data. This includes new starters, leavers and changes to employee information, which would need to be in both systems.
“Organisations don’t want to be moving data around manually or, in the worst-case scenario, having to key it in twice,” says Lally. “You need a good integration into whatever HR system you’re using. My advice would be to always look for a provider that’s a one-stop-shop because they will have the integrations and it’s one single experience with one support desk and one account manager.” Trying to get competing organisations to work together on integrations can be a frustrating experience for HR and payroll teams, she adds.
Using a single system will reduce the risk of disparities and ensure quicker payroll processing. It also makes reporting easier, and allows organisations to comply with all relevant legislation, including the GDPR. Our GDPR compliant HR software, when linked with our payroll software, ensures end-to-end data security for all categories of data captured in either system, reducing the likelihood of data breaches.
One example of an organisation that’s benefited from an integrated HR and payroll system is farming organisation Haygrove. It previously used an HR system that was unfit for purpose, and typically wasn’t used by employees. Then, it implemented Ciphr’s integrated package.
“It was a breath of fresh air,” says head of HR Sara Roberts. “Getting the data out of the system has become so much easier. I report monthly on HR KPIs for the business, and it would have taken me hours to do it on our previous system. We have reports set up in Ciphr HR that enable me to pull information easily and quickly.”
Why Ciphr: Our team of UK-based consultants, drawn from HR and payroll backgrounds (with hundreds of years of combined experience), understand exactly what your needs are. You can use our HR and payroll software yourself, in-house, or trust our bureau team to run your payroll for you using our own software.
Managed payroll services
Many businesses leaders in the UK outsourced payroll for the clear cost and efficiency benefits. Moving to an outsourced payroll model often results in lower costs compared to having a dedicated in-house team, and can free up time for your HR team to work on more strategic projects.
As well as the advantages that come from using our payroll software, outsourcing payroll to our team of UK-based and fully qualified payroll professionals means you don’t have to worry about staying on top of paying employees or complying with new legal requirements. It also gives you the flexibility to grow, allowing you to scale up your needs as and when desired.
Under this model, our payroll team will act as a PAYE-registered agent office for all HMRC submissions, and will submit BACS reports to HMRC and other third parties such as pension providers, helping you comply with auto-enrolment requirements.
There are a number of reasons why organisations might feel this is the right time to move towards outsourcing payroll, including spending too much time on payroll-related activities, a lack of in-house resources, an out-of-date payroll system and the likelihood of significant change within the business.
“A major advantage of outsourced payroll is business continuity,” says Jaspal Randhawa, director of product for payroll at Ciphr. “During the pandemic, some companies had a payroll manager who was the only person who could do the payroll and they came down with Covid,” she recalls. “There’s nothing to say that at some point they won’t face similar constraints. By outsourcing payroll, you always have the infrastructure in place to manage payroll from anywhere.”
There are many different factors to consider when choosing an outsourced payroll provider, including whether the system will integrate with HR packages, when the cutoff point for submissions need to be made, and the pricing structure.
Why Ciphr: Payroll cycles include multiple review points for more control and less admin. You can also rest assured that your payroll will run correctly, regardless of time off, sickness or unplanned absences.
Five things your C-suite leaders will consider when switching payroll services
- Cost: In-house payroll teams are expensive. You’ll need at least two people who know how to run your payroll in case someone is unavailable. You’ll be paying market rates, too, to hire and retain the best people. Outsourcing removes that rigid cost and ensures coverage, no matter what
- Trust: Your payroll needs to hit the mark in every way – adhere to legislation, pay people correctly, and always be available. Our payroll team is CIPP-certified and has annual training to make sure they stay up to date with industry developments, legislation and best practice
- Implementation: Payroll is one of the most arduous implementation processes. It’s complex, and the days (and weeks) will be long as you switch to a new provider. Our team alleviates that hassle and shoulders the burden for you
- Customer service and support: If things go awry, you need immediate support. We have triple-coverage contingency plans for every customer
- Employee experience: Paying your people is paramount. Get it wrong, they’ll leave, and your employer brand will be damaged. Get it right, constantly, and you’ll be holding on to staff for longer. You’ll also stand out as an employer of choice
How managed payroll services benefit employees
With the cost-of-living crisis and concerns around recession, employees need certainty that they will be paid correctly and on time every month. This is particularly the case in sectors like the care industry – where payroll can be complicated by different shift rates – and in charities and education providers, where many people are feeling the pressure as a result of several years where pay rises have failed to keep pace with inflation.
“With public sector payroll, there are very specific requirements,” says Randhawa. “Some employees have multiple employments within the same organisation. That means they might belong to different pension schemes. The employee might have a backdated pay rise to apply and that adds another level of complexity to the payroll calculation. You need a software provider that has that expertise and the necessary network to be aware of what changes are coming.”
“As well as the risk that people will leave if they don’t feel confident they will paid, there are positive benefits that come from having employees who are paid correctly,” says Barnden. “If people are being paid accurately and on time, then you’ve got higher employee morale,” she says. “You have better financial wellbeing and a happy, retained workforce, who are getting paid what they are entitled to when they should be getting it.”
Why Ciphr: With experience across a wide range of sectors including care homes, charities and schools, we’re the perfect choice to ensure your employees get the payroll service they need and stay financially well.
How managed payroll services affect the bottom line
Organisations who opt for managed payroll benefit in three main ways: reduced costs as a result of not having to maintain or expand in-house teams; greater efficiency by freeing up time for HR staff to focus on other areas; and reduced employee turnover across the organisation as a result of a better payroll experience.
“It depends on the size of the organisation, but it will generally be more cost-effective to outsource payroll rather than to keep it in-house,” says Barnden. “There should be headcount savings if you choose to outsource. Recruitment is really hard and salaries for payroll managers definitely have increased. If it costs you £35-40,000 to recruit a new in-house payroll manager, it will cost you about half of that for the same service.
“It also gives HR teams space to think about how to reward and manage employees better, and implement different schemes if they’re not bogged down in admin.” There are also savings to be made in not having to constantly train payroll staff around new regulations, as an outsourced provider will take care of that.
Then there’s the benefit of peace of mind that comes from knowing you’re protected from a key payroll employee suddenly leaving; complying with all HMRC, pension and GDPR requirements; and that your chances of being caught up in a data breach are significantly reduced. And you can’t really put a price on that.
Why Ciphr: We have a strong track record in delivering payroll success, including generating bottom-line savings. Read more about that here.
Your payroll. Our payroll people
Managed or bureau payroll services are ideal for organisations who are looking for peace of mind that their people’s pay is in good hands. And for those who want to pay their people in the most cost-effective, reliable and secure way possible.
Whichever level of support you (and your C-suite) want, we’re here to help. To find out more about why our clients across the UK trust us to process more than £2 billion BACS payments per year, download our brochure or request a demo today.