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Deciding to change your Payroll provider, when you’re used to using a particular service, can seem overwhelming and daunting. However, it doesn’t have to be. With some careful consideration to the key points below, you’ll feel confident in knowing what to look out for before taking the leap and making any final decisions.
1. Charging structure
Ensure that you understand what is and what isn’t included in the cost of your payroll provision - there could be hidden charges. You may find that some payroll providers base their charges on staff headcount or the total number of employment contracts. Alternatively, other providers may vary their charges throughout the year, based on fluctuations in employee numbers, or charge a separate onboarding fee.
When comparing payroll providers, it’s important to draw a true comparison by ensuring that all charges are included in your calculations and that you have taken into account the term of the contract. For example, if the contract is over three years and based on fluctuations in employee numbers, it’s important to bear in mind your projected growth in employees over the period.
2. Service Level Agreements (SLA)
Comparing providers on cost alone is not sufficient. You should ensure that you are aware of what is included within the SLA and what is not. Anything outside of the SLA is likely to be subject to a further charge. Therefore, be clear on the level of service that your School or Multi-Academy Trust requires and ensure the SLA meets your current and evolving needs.
3. Quality assurance
Make sure that the payroll provider you choose has the necessary credentials and experience to deliver the payroll service that you require.
Consider questions such as:
- Do they have accreditations? E.g. are they accredited by the Chartered Institute of Payroll Professionals (CIPP)?
- Are they experts in their field?
- Are they education sector specialists? If not, how much experience do they have in education?
- Are they familiar with the legislation and changes that affect the education sector?
- Will they be able to support you with your statutory obligations?
4. Demonstrations
Many services sound great on paper, but it’s important to consider if the provider can deliver the service you require and meet your expectations. Whilst deliberating between the different providers, request to see a full system demonstration to ensure that you understand how the service and system will work for your School on a day-to-day basis. Also, use this opportunity to raise any outstanding questions.
5. References
Ask each provider which Schools they currently support in your local area. You may find it useful to request references from these Schools so that you can gain valuable insight into their experience.
6. Responsibilities
Be clear on the responsibilities of the payroll provider and your School. Make sure that you’re aware of the information required during the onboarding process, what the process will entail and the support that you will receive. Consider how your new payroll provider will ensure a smooth transfer of services and no disruption to your employees' pay.
Check whether your existing provider will liaise directly with your new provider or whether data will be sent directly to the School. If the transfer will be affected by term closure periods, ensure that there will be sufficient resources to avoid a delay in the transfer of information.
7. Onboarding and exit fees
Ensure that you are aware of any additional costs that you may incur throughout and at the end of your contract. Some providers charge for onboarding, whilst others may charge an exit fee. Therefore, ensure that there are no hidden costs before you sign a contract.
8. Communication with employees
Consider how you will communicate with your employees to inform and reassure them of the changes they should expect, as a result of switching providers. In some instances, this may coincide with a change of employer status.
Changes that might incur include:
- Pay dates
- Payslip delivery method
- PAYE reference
- Pension employer rate
9. GDPR considerations
GDPR should be a key consideration when dealing with any large quantities of data. Look for assurances from your new provider that they appropriately manage and store their data. It’s also necessary to ensure that your existing provider removes any data that they will no longer require once the contract between you has ended. Be aware of any data they will retain and ensure there is a legitimate reason for doing so.
10. Mistakes
Although significant measures are taken to avoid mistakes, errors do sometimes happen. As such, it’s important to understand the processes that your new provider has in place to minimise errors and how they deal with discrepancies. For example, if an error is made by either party, how quickly can it be resolved? If the fault is with your School or Multi-Academy Trust, what charges are applied? Understanding the procedures in place will provide peace of mind should things go wrong.
