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5 Signs That You Should Switch Your Payroll Provider

Contributor: Becci Malooly, Implementation Specialist

December 22nd, 2023 | 5 min. read

By Tony Calavitta

Can you imagine if a quarter of your workforce was grumbling about paycheck errors, and nearly half were eyeing the exit door after just two mistakes?

This isn't a far-fetched scenario.

In reality, 25% of U.S. employees faced paycheck errors, and 49% considered leaving their jobs after repeated issues. These alarming statistics underscore the critical role of payroll in employee satisfaction and retention.

Payroll isn't just a financial transaction – it's a reflection of your business's reliability and professionalism. When your payroll provider drops the ball it's a direct hit to your company's credibility.

So how do you know when it’s time to switch payroll providers?

Here at Combined, our payroll experts have helped countless employers, just like you, navigate payroll problems. We want to make sure that your provider is contributing to the growth and success of your business.

To do that, we’ve identified five payroll red flags to run from. By reading this article, you will learn why each may mean it’s time to start shopping for a new payroll provider.

Let's dissect five telltale signs that your payroll provider may be more of a liability than an asset to your business.

1. The one-size-fits-all fallacy  - Is your payroll provider adaptable?

Businesses are as diverse as the people who run them, each with its unique set of challenges.

Shouldn’t your payroll provider be adaptable to the requirements of your business?

When a payroll provider offers only a generic, one-size-fits-all solution, it's a glaring sign of their failure to recognize and value your specific needs.

This lack of customization can lead to a significant mismatch between the services you're paying for and what your business actually requires. The consequences of this? Either overspending on features that add no value to your business or missing out on crucial functionalities that could streamline your payroll process.

Customized payroll solutions are particularly vital for businesses with unique structures, such as those with variable pay cycles, diverse employee types, or complex benefit plans. Without the ability to tailor services to these specific needs, your payroll process can easily become a tangled mess.

(And, let’s face it, do you really have the time to spend untangling a knot that didn’t need to be there in the first place?)

This not only affects the immediate efficiency of your payroll processing but also impacts your ability to adapt and grow. As your business evolves, so too should your payroll services.

A provider stuck in a rigid, one-size-fits-all mindset is ill-equipped to support your business's growth, leaving you with a service increasingly misaligned with your evolving business objectives.

2. The helpless hotline - Does your payroll provider have quality customer support?

When you’re paying a service provider, you probably expect quality customer service. Now, how would you feel if upon calling for help with a critical payroll issue, you were met with unresponsive or uninformed customer support?

(Helpless? Frustrated? Angry? Ready to end your service agreement immediately?)

Simply put, this scenario speaks to a fundamental customer service failure. And – believe it or not – when it comes to asking payroll questions or voicing concerns, it is not an uncommon occurrence.

The complexities of payroll management demand prompt and competent support. When this is lacking, the consequences extend far beyond the immediate problem at hand. Inadequate customer service not only prolongs the time taken to resolve issues but can also lead to significant disruptions in your payroll cycle, potentially resulting in legal and financial complications.

But that’s not all!

It also erodes the trust your employees place in your organization. When payroll issues are not addressed efficiently, it sends a message of negligence and a lack of respect for the very people who keep your business running. On top of that, it may place an unnecessary burden on your internal team, who may have to step in to mitigate the fallout of unresolved payroll issues.

In a service as critical as payroll, having a reliable, knowledgeable, and accessible support system is not just a convenience – it's an essential component of a trustworthy provider-client relationship.

3. The accuracy Achilles' heel - Is your payroll provider reliable? 

When it comes to payroll processing, accuracy is not just important – it's imperative.

(Let’s repeat for emphasis – payroll accuracy is an absolute must!)

An error-prone payroll system is a ticking time bomb. And the impending explosion is capable of inflicting significant financial and reputational damage on your business.

The range of potential errors is vast, from minor miscalculations like under- or overpayments to major compliance violations like incorrect tax withholdings. Each, of course, carries its own set of serious consequences – fees, fines, and even legal implications.

However, the repercussions of payroll inaccuracies extend beyond these immediate financial implications.

When employees consistently face issues with their paychecks, it leads to dissatisfaction, decreased morale, and in some cases, increased turnover. The situation is further exacerbated when these inaccuracies become public, potentially tarnishing your company's reputation and making it challenging to attract and retain talent.

In a domain where precision is paramount, having a payroll provider that frequently fumbles on accuracy is a significant liability that can have long-term effects on the success of your business.

4. The transparency trouble - Does your payroll provider make information easily accessible?

Payroll information should be accessible. Period.

Not only does this transparency allow open communication but it also empowers your employees to manage their personal payroll information at their own convenience.

When a payroll provider secures critical data behind a red tape barricade, it creates an environment of uncertainty and mistrust among your employees.

What does this look like?

To name a few:

  • inaccessible pay stubs
  • opaque tax deductions
  • convoluted leave balances.

Limiting (Or even obscuring) access to payroll information can leave employees feeling disconnected, undervalued, and uncertain about their financial standing.

The benefits of a transparent payroll system, on the other hand, are extensive.

For employees, having easy access to their payroll information fosters a sense of autonomy and engagement. They can independently verify their pay details, understand their deductions, and plan their finances with greater confidence.

For employers, transparency in payroll streamlines communication and reduces the administrative burden. Instead of fielding endless – and often repetitive – questions about pay details, employers can direct employees to a self-service portal, freeing up time and resources for more strategic tasks.

Plus, transparency in payroll processing builds trust which is a critical component in any employer-employee relationship. When employees feel that their employer is open and honest about payroll, it enhances their overall job satisfaction, engagement, and loyalty.

5. The short-term relationship - Is your payroll provider able to scale with business growth?

Think about the process of moving. You have to box up all of your belongings, transport them to a new location, unpack and organize them, etc. Now think about moving every year, repeating this process over and over again.

(What a hassle!)

The process of switching between payroll providers is just as if not more, involved as that of moving. And to avoid the hassle of doing it again and again, your payroll provider should be a long-term strategic partner.

A provider that focuses solely on short-term solutions demonstrates a lack of commitment to your business's growth and adaptability.

This short-sighted approach can lead to a host of issues, most notably an inability to scale with your evolving business needs.

As your business grows, your payroll requirements will inevitably change. A provider fixated on short-term fixes will struggle to keep pace with these changes, forcing you to either switch providers frequently or settle for subpar services.

Moreover, a short-term-focused provider often lacks the commitment to continuous improvement and innovation. In the fast-evolving world of payroll, staying ahead of the curve is crucial. This includes keeping abreast of regulatory changes, technological advancements, and best practices.

A provider that's not looking ahead is likely to fall behind, leaving you with an outdated, non-compliant payroll system. The ideal payroll provider is one that not only meets your current needs but also anticipates future challenges and opportunities, offering solutions that evolve alongside your business.

This kind of forward-thinking partnership is essential for sustained business growth and success, ensuring that your payroll processes remain efficient, compliant, and aligned with your long-term business strategy.

Should you look for a new payroll provider? Take the next steps

Understanding when to switch your payroll provider is crucial for the health and efficiency of your business. This article has highlighted five key indicators that signal it might be time to work with a provider that better aligns with your needs.

At Combined, we're not just a payroll provider – we're a partner in your business's growth and success. We understand the challenges you face with payroll management and offer tailored solutions that address these specific concerns.

From ensuring accuracy and transparency to providing responsive customer support and adaptable services, we're here to help you overcome the hurdles of inadequate payroll processing.

If you're experiencing any of the issues discussed, it may be time to explore a new direction.

Don't settle for a payroll provider that doesn't meet your needs!

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Schedule a meeting with a payroll specialist to discuss how we can help you switch to a payroll service that truly supports and enhances your business operations.

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This article is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.