Payroll Service Payroll Trends

Payroll Professionals Turn to Social Media to Evaluate Service Providers

  • A prime outlet for airing complaints in general, social media is becoming a forum for calling out the shortcomings of payroll service providers.
  • It appears no particular service provider is immune to the brickbats.
  • Payroll pros help each other to navigate selecting service providers.

As challenges for payroll pile up due to major, complex legislative changes, payroll service provider solutions are struggling to keep up and deliver at crucial times, according to user reports on social media.

For all that third-party providers do to ensure their clients’ payroll processes are efficient, accurate and timely, there remains concern. 

The complaints appear to span across the entire third-party payroll provider industry of, from the very reputable and well-known to the mid-size and specialty service providers. 

These issues appear to range from system instability and processing delays that impact payroll delivery, to not being able to create usable reports for the employer from the data. There are instances of confusion due to updating procedures, year-end anomalies, and serious customer service problems, all aired out on Facebook, Twitter, Reddit and other platforms. 

Users of services that were pressed minced no words. One said: “Another 65-minute wait for a representative … I finally got a person and they couldn’t figure out the issue … Two hours wasted — payroll processing was delayed.”

Another complained about lack of sufficient support for a specific reporting issue. “When we try to fix or add something, something else ‘breaks.’ I’ve been with this company for a year now and we are on our third rep!” 

A separate service provider received similar bad comments: “Reporting is terrible and if you need something specific you pay a lot for it.”

The issues keep going: 

At year-end, employees using an earned wage access provider at one major retailer were told the option “is not available to associates from Dec 19 to Dec 31.” What a great time to not have access to the highly-touted benefit. 

On being able to generate reports, several echoed this complaint, “They ignored my report request. I had to get other departmental directors involved. We had to pay extra for these reports.”

“Unfortunately, their answer as usual was ‘system limitations’ … no follow-up, no research, no accountability,” cried another.

Many professionals discussed their own work-arounds due to system limitations.

“I keep a separate excel spreadsheet just to make sure it’s right because even though you can see what will be accrued, it may or may not be in the EE’s (employee’s) total,” said one who posted. “Their customer service is horrible”

“Every single time they have an upgrade over the weekend, Monday’s are shot.”

Payroll pros rely on peer evaluation in selecting a provider

Often when these situations are identified as someone asks about a particular service provider, there are a few in the same thread who endorse, and others who pan.

While one says “We are using products from both systems and it’s been great!” Another says “Not user friendly at all. I would never recommend it to any of my payroll friends.”

On another thread about garnishment processing, a similar refrain has one poster saying, “We used them in the past and won’t do it again,” while another says, “The service benefits outweigh the few problems that we know of.”

And there can be more to the concerns than simply what the service provider has offered and can or cannot deliver effectively. Often large service provider systems are set up at the client by approved consultants or teams that specialize in such implementations. And implementations can go badly. For example, “My implementation specialist wasn’t very good. They really made a mess …”

Some are resigned to having to deal with shortfalls in service and delivery.

One in payroll said “I want to switch … but I am just scared it’ll be the same thing elsewhere.” Then another seems to back that issue up, “I wish we hadn’t switched right now. We are at the third check into our new provider and I am so very sad.”

Others pull back completely.

“This is why I appreciate a full in-house payroll. Everything is under my control.”   PYD

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Choose the right payroll service provider with this basic framework

When it comes to running payroll, timeliness and accuracy are of the utmost importance. If you have an employee who receives her pay late or finds mistakes in her paystub, you can bet your bottom dollar that you’ll hear about it and have to work quickly to resolve the issue. Late or incorrect tax forms aren’t much fun to deal with either.

According to Business News Daily, one way to minimize risk and error is by using software to help you process payroll, calculate and file payroll taxes, generate payroll tax statements, and more. But with so many players in the space, choosing the right payroll service provider can be overwhelming. It can be made simpler with some basic considerations, including:

  • Price: For most companies, price is an important consideration when choosing any sort of outside vendor or software. Payroll systems can be very complicated, and pricing often depends on how many features or add-ons your team will use. Researching payroll service provider websites is a great place to start, but some large providers may require a sales call in order to better understand your needs and provide a quote.
  • Support: According to the U.S. Chamber of Commerce, customer support for a payroll service can be even more important than for software! Choosing a vendor with positive customer support reviews can help to save you and your IT team future hassles.
  • Security: Your payroll service provider will have access to your employees’ most sensitive personal information, including their bank account details and other personally identifiable information. It pays in the long run to pick a provider that encrypts information and safeguards it against bad actors. Carlos Rodriguez, president and chief executive officer of ADP, has said that ADP has a focus on “delivering market-leading, cyber resilient HCM solutions to clients who view [ADP] as a partner they can trust (source).”
  • Compliance: When it comes to running payroll, compliance is a top priority. In fact, the IRS recently reminded businesses to carefully choose their payroll service providers following continuing concerns that some disreputable organizations fail to deposit employment taxes, leaving businesses vulnerable to unpaid bills.
  • Experience: While every company is unique, choosing a vendor that has worked with similar companies to yours can help to ensure that they’re equipped to meet your business needs. Ask your potential payroll provider if the company serves similar clients to your business and check out reviews online to see how well they’ve serviced comparable organizations, or ask to speak with a reference!
  • Fit-Gap Analysis: Does the application have the right attributes to fit with what your organization needs done in payroll? Identify necessary tasks within your organization and ensure that the provider can fit the bill.

Add-ons, integrations and partnerships (oh my!)

While the considerations above provide a basic framework for evaluating payroll software companies, there are other features you should keep in mind if you want to ensure you’re getting the most innovation from your payroll provider:

  • Integrations and add-ons: Some companies will see real benefits from using specific payroll features or add-ons. The U.S. Chamber of Commerce suggests asking yourself: Do you have an existing suite of programs that demands careful integration? Does your company work in a heavily regulated vertical that might require sophisticated software? Selecting a payroll provider that can seamlessly integrate can save you time and money if this is the case.
  • Partnerships: Another way service providers scale out to include more services in their offerings is by partnering with other outside vendors who have been vetted as best-in-breed for particular applications, such as on-demand pay. These partners generally are included because they have a higher level of expertise and application experience in that particular service than the main payroll service provider can offer itself. Ensure these partner tools are compatible with any service provider software, allowing the additional application to be portable in the event a client chooses to make a change in their HCM or payroll processing vendor .

The bottom line

At the end of the day, every company is unique. The “right” payroll vendor for one company might not make any sense for another. Choosing a provider that has experience working with companies like yours, at a reasonable price point and with a commitment to compliance will help to ensure that you have a positive experience with your vendor.

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4 Compliance Concerns That Keep Payroll Professionals Up at Night

Let’s face it: as a payroll professional, you have a lot of worries associated with your job. The payroll department is the backbone of every company. It’s highly unlikely that there’d be any employees in the building if your team wasn’t there doing its job every day!

Let’s look closer at four compliance nightmares that may be keeping you up at night and help you get back to counting sheep and drifting off to dreamland:

Nightmare #1: Inaccurate payroll record-keeping.

While every department has its version of a clerical error, those involving payroll can easily snowball into much larger problems for the company. Depending on your state, you may be required to maintain employee payroll records for four to seven years, creating an even larger window of error for inaccuracy, lost files and other disasters. Having 100% accuracy as a goal is a lot of pressure on a team, especially if you are working with a manual system.

Electronic record-keeping can help streamline this process as well as give employees access to their own records and paperwork. Not only will this help you be more accurate and make it easier to keep things neatly filed, it will also reduce the frequency of times employees come to you to request old records. Having a timeclock system that automatically creates payroll records can also help eliminate extra steps and reduce the margin of error in your records.

Nightmare #2: Ever-changing legislature around payroll rules and regulations.

This is probably the most frustrating issue on the list and, unfortunately, the most constant. Across the country and from state-to-state, legislators are regularly re-writing the rules you need to follow. Non-compliance can be extremely costly and involve lawsuits, employee settlements and a myriad of issues that could have been avoided. The last thing anyone in your C-Suite wants to hear is the word “lawsuit.” However, there are some simple steps you can take to protect yourself and your company.

Using HR and payroll software that is automatically updated with these new policies and information can help reduce the risk of accidental and unintentional errors. Not only does that help you avoid missing new updates to payroll procedures or legislation, it also reduces the work of having to dig for this information yourself. For an added layer of protection, we also suggest checking reputable news sources for updates to legislation and policies.

Nightmare #3: Privacy breaches on your sensitive data.

While most people fear their personal information being stolen by hackers and other cybercriminals, you’ve got a whole team’s worth of information to worry about protecting. Not only are 52% of security breaches are caused by human error, but identity theft and money rerouting through a payroll system hack can be an especially egregious crime to clean up after.

So what can you do to prevent this? Well, one of your first lines of defense should be educating your employees to help reduce the risk of phishing scams, account hacking and various other forms of cyberattacks. Encourage them to protect sensitive passwords and other personal information. You should also limit who has access to these sensitive records as much as possible to further manage the risk of a data breach or identity theft. Lastly, using the most up-to-date payroll systems will help ensure that your software can protect your company from ever-evolving forms of security breaches.

Nightmare #4: Making an error when filing taxes.

Whether it’s a late payment or an error in worker classification or withholding, taxation mistakes can be a doozy to clean up and can even lead to audits and fines. In fact, mistakes in employer payroll tax cost small businesses a collective $6 billion in civil penalties in 2015. Not only that, but discovering these errors can mean hours of extra labor for your team members, who will then have to scramble and work backwards to correct them.

However, there are steps you can take to avoid civil penalties and all the associated headaches. This is another instance where automating your processes with tax software can really serve you. Since the software will include up-to-date regulatory and tax functions, you will greatly reduce the margin of error for yourself and your team. Regularly checking the IRS website for new, state-specific tax information can also help you and your team stay compliant and avoid the snowball effect of problems that a taxation error can cause.

Do you have other payroll headaches that keep you up at night?? Let us know in the comments down below or fill out the form and we will include your suggestion into our next article.