Outsourcing payroll and HR is a rapidly growing trend. Reduced costs are an advantage often emphasized. But are there more benefits? Pernilla Hjälm, Team Leader at the payroll center Flex Services, shares her experiences.
The administration surrounding payroll and HR is an essential part of any company and a prerequisite for smooth operations. Correct salaries at the right time, plain and simple. However, payroll management is administratively burdensome and involves many complex tasks. Increased efficiency demands and cost savings prompt many companies to shift payroll management to an external partner. This way, companies can unlock valuable resources and focus more on their core operations—while keeping ongoing costs down.
Making Payroll Management Less Vulnerable
In smaller companies, payroll and HR administration often depend on one or a few individuals. The payroll landscape is rapidly changing, and staying constantly updated on current agreements, laws, and regulations is a demanding task. Naturally, handing over administration to a partner who is an expert in the field can feel reassuring. The smaller company may also lack someone to step in during sickness, vacations, and vacancies. With an outsourcing solution, this vulnerability is eliminated.
Pernilla Hjälm is the team leader at Flex Services, a payroll center established in 2018 that provides payroll and HR administration outsourcing to companies of varying sizes and with different contractual needs. The main activities involve managing time reports, travel expenses, ongoing payroll work, and assisting customers with questions. Pernilla further explains the benefits associated with outsourcing payroll and HR:
– The advantage is that someone else is well-versed in collective agreements, laws, and regulations. You have a backup with payroll expertise, which makes payroll management less vulnerable. We are a team that juggles payroll issues, giving us more significant knowledge than an individual could have, she says.
From an economic perspective, outsourcing has significant advantages, for example, reduced costs associated with personnel, training efforts, and system licenses.
– Paying only for the number of payroll slips produced is very profitable for many companies, Pernilla explains.
Focus on Security and Quality
Flex Services works with its own developed software. According to Pernilla, this has significant customer advantages because the payroll center has solid expertise in the system and close collaboration with the development department. She further explains that security and quality are important guiding principles in their daily operations:
– We know our system. We know which features can facilitate your needs. Additionally, we work according to well-established work routines and meticulous documentation and use standardized template companies that we continuously update. The customer can be confident that we deliver payroll service with quality, she says.
Flex Services' services are built around Flex HRM, a complete personnel system. Working with a cloud-based, platform-independent solution brings a significant advantage to communication between the customer and the payroll center. Many facing outsourcing may worry that accessing their payroll data, time reports, and travel expense data may become more complicated when payroll management is no longer internal. But with a cloud solution, there's no issue. Here, you have direct access to the data you need from any device you want, provided you have the proper authorization.
Partial or Full Payroll Outsourcing
Outsourcing the entire personnel administration or just a part of it? The needs vary significantly between different companies. Some want to outsource payroll but handle HR administration themselves. Others wish for a complete service, including ongoing payroll administration, time reports and travel expenses management, and routines like updating personnel and employment information, on-/offboarding, and producing statistics. To meet the varying needs, Flex Services has invested in a flexible solution that can easily be adapted to the company's preferences. And as the system is scalable, it's also easy to add the modules needed to solve the tasks desired.
– There are four packages to choose from, reflecting the different needs we have seen in the various companies. We offer everything from a basic package to a complete option with all modules and services in one, explains Pernilla.
A Strong Foundation: The Key to a Successful Transition
What challenges do companies face when they are on the verge of outsourcing their payroll administration?
– If the company already uses the Flex system, the procedure to get started can be very brief. In other cases, there may be some challenges regarding the data we receive from the customer's previous system. The data needs to be reviewed by the customer to ensure that we import the correct information into our system. When switching systems, it's good to take the opportunity to clean up old data that you may not want to include in the new system, Pernilla says.
According to Pernilla, having a stable foundation in terms of work processes is also essential. As a customer, you should assess your current processes and ask yourself which ones work well and which ones work less well. Is our work structured thoughtfully? What can we change to achieve the efficiency we strive for?
– Changes are received differently by everyone, but at Flex Services, we are used to working with change processes, Pernilla concludes.
