Payroll partner vs. payroll vendor: how good is your payroll service?

Payroll is highly complex. Therefore, it is not surprising that a growing number of businesses opt for payroll outsourcing. Especially when it comes to multi-country payroll, outsourcing is often the best option to ensure payroll compliance and avoid disruptions that could jeopardize the timeliness of salary payments.

The tricky part of outsourcing payroll is to find the right service provider. Payroll is a crucial business function and should only be outsourced to a reliable partner who takes all the necessary precautions to prevent any issues.

How can businesses know if they made the right choice with their payroll service provider? What makes the difference between a normal payroll vendor and a real payroll partner who has your business’s interests at heart? Read on as we take you through a series of questions that will help you find out if your payroll service vendor ticks all the boxes to qualify as a reliable payroll partner.

When it comes to choosing payroll services, the devil is in the details. At first sight, the service offering might not differ all that much from one provider to the next. Upon closer inspection, however, one can work out some notable differences in terms of service quality.

Businesses that want to be sure that their interests are looked after in the best possible way need the right payroll relationship. Ideally, this should not just be a payroll vendor, but a reliable payroll partner who proactively offers advice to help you make the best decisions for your business, keeps you in the loop about everything concerning your payroll, and prioritizes transparency and compliance.

Lano Academy

What is a payroll provider?

Read more

There’s a big difference between a payroll vendor who is only concerned about the daily business of running payroll and a true payroll partner who adds real value to your business by helping you leverage the full potential of your payroll. But how to tell them apart? Here is a list of questions you can use to evaluate the quality of your current payroll services.

What are the applicable SLAs and KPIs, and how reliably are they met?

The basis of any good payroll relationship is a detailed Service Level Agreement (SLA) that outlines what is expected of the service provider. Aspects that should be outlined in a payroll SLA include:

• Time to respond to queries,

• Time to resolve payroll issues,

• Deadlines for payroll-related process (both for the service provider and the client business), and

• KPIs for assessing payroll accuracy.

Comparing the expectations outlined in the SLA to the actual service delivery is a good starting point to evaluate the quality of the payroll relationship.

Is your payroll service vendor available for questions and concerns?

It’s always preferable for business operations to run smoothly, but even more so in payroll. From compliance to employee retention, there is a lot at stake when payroll goes wrong. That’s why any doubts or concerns about payroll should be cleared as soon as possible. When outsourcing payroll to a third party, you should have a partner who is available 24/7—or at least during extended business hours.

Is your payroll vendor proactive or reactive?

When evaluating the quality of a payroll relationship, one aspect to consider is whether the service provider is proactive when it comes to offering advice and finding solutions to payroll challenges and problems. One of the key differences between payroll vendors and payroll partners is that the latter provide active guidance to their clients in payroll-related matters. A reliable payroll partner actively prevents payroll problems before they arise and doesn’t wait for you to tell them that there is a problem.

Can your payroll partner provide detailed data insights?

One of the key differentiators between payroll partners and simple vendors is the strategic value they add (or don’t add) to your payroll operations. A vital prerequisite for making payroll more strategic is high-quality payroll data. Payroll data offers valuable insights into a business’s workforce and can reveal hidden trends and patterns which can be used to improve business operations. A good payroll partner leverages payroll analytics to create detailed payroll reports which you can use to inform business decisions.

Lano Academy

How to choose a payroll provider

Read more

Does your payroll vendor care about your business’s interests?

A real payroll partner puts your business’s interests first. When assessing whether this is the case or not, check for the following signs that your payroll provider really cares:

• Your payroll partner is ready to adjust processes to meet the changing needs of your business.

• Your payroll partner takes the time to actually get to know your business and work out a payroll strategy that works for you.

• Your payroll partner proactively offers strategic advice on how to improve your payroll operations.

• Your payroll partner doesn’t force any changes upon your business just because they think this is the way things should be.

• Your payroll partner makes an attempt to integrate and leverage your internal resources instead of urging you to pay for additional services.

How transparent are your payroll services?

Transparency in payroll is crucial. This not only refers to the pricing structure of the payroll services, but also to everything that happens before, during, and after payroll processing. If, at any point of the process, there is an issue, you should know about it. The same goes for payroll errors. Payroll errors happen, there’s no way around it. But when they happen, they need to be handled in an appropriate way. A payroll vendor who isn’t open about payroll mistakes is not a reliable partner.

Does your payroll partner exceed your expectations?

One clear sign that your business is working with a good payroll partner is when the latter exceeds your expectations. Can you count on the provider to implement legal changes that affect payroll in a timely manner without you having to do anything about it? Will they inform you about changed requirements that affect your business without you specifically requesting it? If yes, then you have a trusty payroll partner who will most likely continue to deliver good services in the future.

There’s no doubt that payroll is a critical business function for companies of any size, regardless of the geographic scope of their business operations. For organizations with a globally distributed team, however, running payroll is about more than the basic principles of timeliness, accuracy, and compliance. 

Sure, global payroll compliance is a crucial aspect in the equation, but there is a strategic dimension to payroll that shouldn’t be neglected in the context of multi-country operations. Payroll holds an incredible strategic value for businesses in that it:

• Enables strategic decision-making,

• Is closely linked to employee experience and talent acquisition,

• Delivers the data sets that are needed to ensure compliance, and

• Provides detailed insights into global payroll costs and operational efficiency.

Unlocking the strategic potential of payroll requires the right global payroll partner who not only focuses on day-to-day payroll operations, but works as a real strategic partner. That’s why businesses need to be mindful when choosing between different global payroll vendors.

Lano Academy

How to choose a global payroll solution

Read more

Choosing a payroll service for your business takes a lot of time and effort. But even if you do your due diligence, there is no guarantee that you end up with a good payroll partner. Finding out at a later stage that your payroll vendor actually isn’t as good as you initially thought usually means having to start all over again. Not with Lano.

At Lano, we work with a global network of pre-vetted payroll partners that offer their services across more than 170 countries. Save yourself the time and trouble of researching and comparing different providers and pick the best payroll service for your business from our partner network.

Got questions? Book a free demo and talk to one of our payroll experts to find out more about Lano’s global payroll services.