How satisfied are you with the quality of your payroll service?

Frequent errors, delayed salary payments and slow communication with customer service representatives are three common pain points businesses experience when outsourcing their payroll to an external service provider.

The Deloitte Global Payroll Benchmarking Survey has shown that nearly 80% of organizations are satisfied or even very satisfied with their payroll provider(s). However, organizations still see many areas for improvement, notably compliance, accuracy, self-service capabilities, reporting, payroll integration, customer service, and timeliness.

If the service quality of your payroll vendor is below standard and your team constantly needs to put in extra hours to check for payroll errors, you should consider switching to a different payroll service. The problem is that many businesses find it hard to evaluate the quality of the services they receive from their payroll vendor.

We have put together a list of questions that will help you objectively assess your payroll provider and make an informed decision about whether to stay with your current provider or change to a different one. At the end of this blog post, you can also download our detailed Payroll Service Satisfaction Checklist.

Good communication is key in any service provider relationship, but especially in payroll. Short response times and knowledgeable customer service representatives are two important criteria, but there are more aspects to consider when evaluating your payroll service.

• How professional and knowledgeable is your vendor’s customer service?

• How often do you have to send a repeat enquiry to get a response? 

• Do you receive regular status updates on pending payroll queries?

• How does the customer service handle special requests?

• Is there dedicated support for employees?

• How do you rate your overall customer service experience?

Accuracy and timeliness are two crucial payroll KPIs any business should monitor, even when outsourcing payroll to a third-party provider. When evaluating payroll services, the timeliness and accuracy of said services should definitely be taken into consideration.

• What is the first-time approval rate, i. e. the rate of gross-to-net calculations that are approved during the first review?

• What is the number of off-cycle payments per payroll cycle?

• How many times has your business faced tax or compliance penalties during the payroll service relationship?

• What is the average payroll error rate per 1,000 payslips?

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Payroll is all about getting people paid on time. Timely salary payments are a major contributor to creating a positive employee experience. Since a positive employee experience is crucial for avoiding turnover and increasing employee retention, your payroll vendor should be able to guarantee that wages and salaries hit employee bank accounts on time.

• How often have salary payments been delayed?

• Which salary payment options does your current payroll vendor offer?

• Are all payment methods included in the service fee you pay or do they charge extra for certain payment options?

• Does your payroll vendor provide electronic payslips for employees?

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Compliance is the number one payroll priority for businesses. Payroll compliance includes anything from adhering to labor law regulations to ensuring compliance with data protection regulations like GDPR.

• Does your service provider offer support for running internal payroll audits?

• Is your payroll vendor always up to date with regard to legal changes affecting payroll?

• How long does it take your provider to implement changes in payroll regulations and tax rates?

• Are your provider’s processes and data protection standards GDPR-compliant?

• Does your payroll vendor collect, manage, and store payroll records for you?

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Payroll service level agreements (SLAs) are great for tracking the performance of your payroll vendor. But for payroll SLAs to be effective, their fulfillment needs to be monitored continuously. If you don’t have SLAs for your current payroll service relationships, you can use the following questions to assess your payroll vendor. 

• Has your payroll provider put measurements in place to monitor service quality?

• What are your vendor’s response times for payroll-related queries?

• How long does it take on average to resolve payroll issues?

• What is the average ratio of issues resolved compared to all payroll issues?

• Are the chosen KPIs really suited to evaluating the quality of the payroll service?

• How often are KPIs reviewed?

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Your payroll service provider should be a real strategic partner and have your business’s best interests at heart. Questions to help you evaluate if this is the case include:

• Does your payroll service provider openly communicate mistakes and issues?

• Does your payroll vendor provide honest, constructive feedback to help you improve your payroll operations?

• How does your payroll provider react to criticism?

• Does your service provider have a proactive approach when it comes to optimizing payroll efficiency and reducing payroll costs for your organization?

• Does your payroll provider offer proactive guidance to help your business evolve and find solutions that match your changing business needs?

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Still unsure about whether to switch to a different payroll vendor or not? Download our detailed Payroll Service Satisfaction Checklist and get access to a detailed questionnaire that will guide you through the evaluation of your current payroll provider. At the end, you will know if it’s time to change to a different payroll service provider.

Download our detailed payroll service satisfaction checklist.

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