Why you shouldn’t choose your HR & Payroll provider on price alone

With ever-diminishing budgets, it can be tempting to choose your provider based on the cheapest quote. However, Service Level Agreements (SLAs) between companies can vary greatly, and a decision based on price alone may indicate a significant false economy. You could experience poor service and find gaps in the SLA which may ultimately lead to unexpected costs. Therefore, it’s key to choose a provider that offers your School or Multi-Academy Trust a cost-effective service, without compromising on quality.

Below, we cover the aspects to consider when making such an important decision.

1. Consider quality

The right provider should be able to offer you a vast amount of sector experience and knowledge, as well as effective and efficient processes, alongside a reliable service that focuses on quality. If a provider offers a quotation far lower than competitors, it’s important to ensure that expected elements of the service aren’t missing and that they are still able to offer a quality provision. Budgets are important to Schools, so it’s important to ensure that a reduction in cost doesn’t compromise the quality of the service which may result in additional work for the School.

2. Ensure you are comparing like-for-like specifications

It’s easy to assume that one HR and Payroll provider is the same as the next, but there can be enormous variations between SLAs. Undertaking a comparison of each service specification will help you to truly understand what is covered and enable you to choose a service best suited to your School.

3. Consider expertise

One of the key motivators in choosing to outsource HR and Payroll is often related to the additional experience and expertise that an outside provider can offer. Experienced HR and Payroll employees can be expensive and require constant professional development, which comes at a cost. Therefore, ask each provider about the experience of your potential account managers and wider team, including whether they are Chartered Institute of Personnel and Development (CIPD) and the Chartered Institute of Payroll Professionals (CIPP) qualified.

4. Consider hidden costs

At first glance an initial quote may appear cheaper, but beware of hidden costs. Some providers might charge additional onboarding fees, or Schools may find themselves hit with unexpected costs for aspects of the service not included in the SLA. Therefore, it is recommended that you check the SLA carefully for the following:

• Is the amount of support unlimited or capped in any way?
• Is out-of-hours support charged at a higher rate?
• Are there hidden transfer and exit costs?
• Are there any additional charges for more bespoke pieces of work?

5. Consider return on investment and discuss costs

If one provider is offering a quotation far lower than your provider of choice, firstly, consider whether the specification warrants the higher cost and will inevitably result in savings elsewhere. Secondly, have an open conversation with your chosen provider about the cost. They may be able to make adjustments to the SLA or reduce the price if you commit to a longer-term contract.

If you’re looking for advice about the services we provide to schools and trusts, or would like to learn more about the exclusive policies, letters and training our clients benefit from, please talk to us.