Growth can happen in a number of ways for an organisation. It can be organic from years of good practices, solid reputation building, and steadily bringing in more employees. It can happen quickly, such as when new investors come on board or a huge new client win/order means staffing levels need to increase rapidly. It can occur by way of acquisition and merging with another company, and growth is also the aim when new international territories are targeted.
No matter how the growth happens, only 27% of finance leaders say they consider the technicalities of payroll before pressing the green light on their expansion plans – and that’s a big problem.
It’s a problem because being able to accurately pay staff on time and every time, is critical to business success. Running a sound payroll function is critical for accurate finance and meeting legislative requirements too. And with just two pay errors resulting in almost half of all employees starting to think about looking for a new job, any disruption in this area can quickly scupper your dreams of growth.
That’s the topline view of how payroll and growth are so interlinked. But there are a host of technical considerations that all organisations on the growth curve need to factor into their planning.
Payroll can put the brakes on growth plans
Technical payroll issues can scupper and slow growth plans in a number of ways;
- Existing software might not be able to deal with a sudden influx of increased demand
- Contrasting payroll processes and platforms when two companies merge, leading to data mapping issues and miscalculations
- Data security issues when trying to get different platforms to speak to one another, or quickly moving employees from one platform to another
- Software might not have global capabilities or factor in localised tax rates and legislation
- Language, currency and cultural differences
- Internal payroll teams will require upskilling and retraining in any new process or platform
- Systems may no longer offer reliable reporting, forecasting and analysis
Over 50% of payroll professionals say they’re already not confident in the regulatory compliance of their existing payroll processes. Marry that with one in three saying they’re unsure if their current platform can scale to meet future growth demands, and there’s a brewing disaster awaiting many organisations planning the next phase of their expansion.
It is therefore critical that before any growth plans are linked onto paper, the existing capability of payroll platforms is considered, and a clear change strategy is put in place to ensure the smooth and compliant running of payroll processes.
Can managed payroll services support smooth scaling?
Payroll is the biggest monthly expense for most companies and carries the highest compliance risk. Being able to pay staff accurately and on time is absolutely critical to supporting your growth plans.
It’s a key reason why more and more firms are looking to outsourced payroll service providers, either for regular monthly support and managing payroll processes, or as a strategic partner in planning and executing growth.
Managed payroll services can manage some or all of an organiastions’ payroll processing, becoming an outsourced department of true expertise that provide peace of mind, mitigate compliance risks, increase accuracy and prevent fraud, and support your future growth planning with best-in-class software solutions.
A managed payroll consultancy will also support strategic business continuity planning (link to Beyond the hacks: HR software consultancies as strategic business continuity partners), critical at a time when a lot of change is happening at once. And for international businesses, a managed payroll provider can help centralise critical business processes to one company with an entire view of the company’s varying payroll requirements, rather than trying to merge multiple geographically-siloed teams.
Another reason why organisations are increasingly turning to managed payroll partners is the inherent scalability of the relationship. Instead of needing to grow internal payroll teams to support increased hiring demands and the costs associated with that, your outsourced payroll partner can provide an increased service level only when it’s needed, typically on a cost-per-employee basis. This helps growing businesses to expand in a profitable way, with costs only scaling as employee numbers grow too.
Achieve your growth goals faster with Phase 3
At Phase 3, we’re passionate about supporting our partners’ growth plans through seamless payroll planning and execution.
Our award-winning payroll services help organisations to modernise technology and capitalise on the advances in automation and AI to do even more with less. And for growing firms, our specialists work to understand your future requirements and ensure your current payroll set-up can help you get there.
Learn more about what we do and how we can help you through our managed payroll services.