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If you are a UK human resources or finance director looking to drive cost out of your organization and increase efficiency, outsourcing payroll probably seems like a reasonable strategy to help you achieve that goal. And it is. For years, many companies have been enjoying the benefits of outsourcing parts of, or the whole, payroll function. So, if this is an established and accepted strategy, why would you need an advisor?

When payroll outsourcing began, it was a fairly clear-cut process. Find a payroll "bureau" service to make the gross to net calculation, send the payslips, pay the people and take care of your statutory reporting. There were a handful of well-known expert service providers available to medium and large-sized organizations, and it was often as simple as just picking up the phone to call one of them and negotiating a decent price. Well, things have changed.

What are Your Outsourcing Objectives?
Organizations outsource for many different reasons. Cost saving may currently be in the forefront of minds, but outsourcing can deliver benefits that go way beyond the financial. Payroll outsourcing can be used as a lever to implementing new improved technology and introducing employee and manager self-service. It can be transformational and prompt a complete overhaul of all of your business processes, and therefore, be a tool for increasing process compliance and making a new world where exception is not the rule. It can be "high-touch" with enhanced customer service and high levels of hand-holding for employees, or based around very simple transactional processes with all extras stripped out. Your objectives need to be properly identified and articulated in order to make the right market assessment leading to correct supplier selection and operating model decisions. One size does not fit all.

What is Your Scope?
Payroll outsourcing is no longer limited to the traditional "bureau" service. This is still available but is never going to be the source of significant cost saving or service improvement. The range of services now offered means that organizations that wish to fully leverage payroll outsourcing can take the whole operation to an external supplier. Or, it is entirely feasible for companies to identify specific areas within the payroll function to outsource and seek "point solutions" for those distinct areas. You need to be able to objectively assess and match your needs against the art of the possible in order to succeed in your outsourcing goals.