Is a Managed Payroll Solution Right for Your Organization?

Dan the HR Man, SCG Manager, HCM Solutions

It seems like a simple question: Do we need a full time payroll position in our organization?  The answer however is not so simple. A quick search of for “payroll specialist” will net you over 35,000 postings.  As a company looking to hire for that position, you must find ways to stand out and above the noise, so perhaps you are inclined to post it as a full time position, thinking that more hours and the offer of benefits may help.

Think again.  Posting the position as full time still puts you in competition with over 26,000 others.  So, what else can you do to stand out? I have a surprisingly easy answer: Nothing.

Now I get it, nothing is a ridiculous answer considering how just last year in it’s 2022 State of the Workplace report, SHRM noted that “72% of HR professionals indicated that their HR department was working beyond capacity and stretched too thin” so what would posses me, Dan the HR Man, to tell you to do nothing when it comes to trying to recruit for your payroll position?

Because odds are you do not actually need a Full Time Payroll Position.

To better understand whether or not you actually need a full-time position, let’s look at how much time is spent on payroll.  Bi-weekly payrolls are the most common pay frequencies in the US according to the Bureau of Labor Statistics, so giving the payroll processor a generous 3 day span to complete the payroll, that still leaves 7 days for you as an employer to fill and compensate them for.  Some organizations I have worked with try and use the additional days to support that overworked HR department, but I have found it to be with very limited success depending mainly on how qualified the payroll processor is to handle additional HR related tasks as most are either newer in HR or are not even part of HR but rather sit on the finance side.  Other organizations simply rely on the payroll processor themselves to dictate how much time it takes to complete their assigned payroll tasks, and what full time employee is going to volunteer the information that their job could really be done in just 3 days?!  Both scenarios still lead to the same issue: HR is overworked and we need payroll to be done.

Now I suppose you could try and recruit for a higher level HR professional willing to do payroll, or try and train up a payroll processor to be confident and competent in handling those higher-level functions, but both of those options would require additional time and resources from a department already overworked.  Fortunately, there is another option:

Stop doing payroll. That’s right, just stop doing it.

Now to be fair, I’m not advocating that you stop paying your employees, in fact I’m pretty sure if I did that the DOL would insist I change my name.  No, what I am recommending is that you consider the idea of outsourcing your payroll.  Is this the right option for everyone? Absolutely not.  Some organizations have some unique, complex situations that absolutely fill a 40 hour week and then some and outsourcing that level of work and responsibility is likely not the best option.  But for employers who consider themselves small or mid-size, who want to provide the look and feel of a professional, large organization HR department, then outsourcing payroll may prove to be the right move and has the added benefit of potentially unburdening that 72% of overworked HR professionals!