Research reveals widespread dissatisfaction with payroll outsourcing

Research released today by Orion Partners confirms the extent of UK companies’ dissatisfaction with their existing payroll outsourcing solutions.

“The study highlights the key drivers of satisfaction and dissatisfaction among companies that outsource their UK payroll operations”, says Ian Hunter, a partner at Orion Partners, who led the research team.

“We discovered that dissatisfaction outweighed satisfaction in many vital areas, demonstrating for the first time the extent to which outsourcing providers in the UK market are getting things wrong. The underlying cause of customers’ dissatisfaction with payroll outsourcing centres on service delivery issues, poor account management and ineffective payroll processes,” explains Orion’s Hunter.

1. Poor account management

• Respondents complain their account managers are not easily accessible and high performing account managers paraded at the bid stage are quickly replaced by less competent ones


• 89% of respondents report a good service during the implementation stage, but quickly dropping to just 30% soon afterwards


• Vendors need to deploy account managers with relevant, business specific skills, experience and knowledge so not tolimit their ability to add value to customers’ organisations.

2. Failure to manage change requests

• 100% of respondents noted a down turn in the quality of services received since going live


• 36% find their vendors were unable to meet their needs for ongoing change; important when customers expect change requests to happen in a timely way and at no (or reasonable) cost


• Vendors need to have well-defined and robust change control procedures that are cost effective, sufficiently resourced and backed by clear key performance indicators to respond appropriately to customers’ changing needs.

3. No continuous improvement

• 33% of respondents are highly dissatisfied with the proactivity of their payroll vendor. Many were particularly critical about vendors’ ability to pre-empt and address their evolving needs


• Vendors need to give much more attention to their ongoing service and value improvements and must be visibly proactive in alerting clients to new opportunities and new technology, for example. 

Ian Hunter continues, “Payroll technology isn’t causing the underlying dissatisfaction for outsourcing customers, it’s the payroll reporting and account management – or lack of – that is causing frustration. This presents a clear imperative for vendors to reinvent the way payroll information is presented as part of a modern outsourced solution.”
 
“Alongside their outsourcing disappointment, the companies we talked to were agreed on a series of specific service improvements open to vendors that will enable them to put their payroll outsourcing back on track. The study creates an effective blueprint for payroll outsourcing service delivery in the next decade and beyond,”, adds Dr Yonca Crew of Orion who managed the research study .

Alan Brennan, UK Managing Director of HR Access Solution, sponsors of the study comments, “There is considerable dissatisfaction with the current UK payroll outsourcing market; the study confirms that low levels of service and high costs are all too common among providers. These frustrations challenge providers to significantly up their game and certainly leave the market open to a providers that give clients clear and consistent service standards combined with an open and competitive cost model.”