Yes, yes, I know this is a crazy concept during a time when HR departments are likely being asked to cut their budgets instead of increasing them, but stay with me. I might be able to increase your HR and payroll functionality and save your company money all at the same time.
“The big national payroll companies have historically not offered the flexibility and capabilities that the software companies or other services have offered. The big national payroll companies also tend to be far more expensive than many of the other players in the market”
Many of the HR software companies on the market, including many of those on our site, have done very well because they offer a superior HR Information Systems alternative to the national payroll products at a lower cost with greater flexibility and capabilities. If you are using one of these services, I encourage you to take a look at what other products offer to see if you can save money on your HR and payroll processing cost. Read below for a real life example of savings.
A real life example
In 2008, with my prior HR software solution reseller business, we saved a 1,200 employee manufacturing company over $120,000 for their payroll and HR process costs over a three year period. Over a five year span, this company will save more than $225,000 for their HR and Payroll processing costs. At the same time, we were able to add employee self service, tighter interfacing with existing time and GL systems, and correct processing problems they had in the past. Thus, reaping some additional benefits of HRIS they didn’t have before. Do I have your attention?
How did we do it?
The manufacturing company example offered above was using one of the national payroll processing companies for payroll. They were using Sage Abra for HR, which did not integrate very well with their payroll product. They also had a time collection system and a GL package which did not speak with the existing payroll product. We brought their payroll back in house, using Abra payroll, and custom created interfaces to both the GL and time collection packages. Okay, at this point I am certain you are saying “Hold on. We don’t want to do payroll in house.” As you can imagine, I have heard this before. To address this issue, we signed up the client with a service that allowed them to bring their payroll in house but they were also able to outsource only their tax filing. I call this an outsourcing hybrid. You get the cost advantages of bringing the system in house with the outsourcing advantages of having someone else handle the tax filing.
Another concern may be about the large up front cost of purchasing a HRM Software system as opposed to a hosted or subscription model. This is easily addressed as well. There are a number of leasing companies that will offer the option of leasing business software systems. Basically, you spread the cost over three or five years. Then, at the end of that time frame you own it and going forward you only pay an annual support fee, which will still be far less than the cost of an outsourcing service. Often times the lease amount is still less than your fees associated with a national payroll provider.
If your company is currently outsourcing your HR solutions processes, you may want to look at the option of bringing the processes internal to save precious budget funds.
What if you still want to outsource your payroll and HR processes rather than bring them internal?
Can you still save money? Absolutely; you will find if you look at hosted or subscription service HR software solution, that it is highly likely you will be able to find a service which is less expensive and will still provide the added functionality the national services are unable or unwilling to offer.
What if your company has seen drastic reductions in work force?
You may very well find that the cost to support and maintain a custom system created for a much larger organization that has reduced in size, may be more cost effectively maintained by an out of the box system or service. The important thing I have tried to point out with this post is that you have options, lot’s of them. Take a look at our products page and you will quickly see a list of 14 alternatives to the national payroll services. You may find significant cost savings with any of these packages.
To save money on your annual support fees, you may also want to read our prior blog post regarding saving money on annual tech support fees.
If you are a vendor and have saved companies money on their HR and Payroll software process and added functionality, I am certain our readers will be interested in the details.
