7 Traits to Look for in a Payroll Management Company

By November 10, 2016

Partnering with the wrong payroll management company can impact your business exponentially. Make sure you do your due diligence with a thorough investigation of vendors.

Like all supplier relationships, not all outsourced payroll service operators are going to be the right fit for your company.

Once again there are a lot of factors that need to be assessed before deciding which payroll provider is the most suitable.

When selecting your vendors we recommend taking the time to investigate different company traits.

1. Location

The geographic location of your vendor is an important one – are they situated locally, interstate or internationally?

Will you be able to access the staff who are managing your individual account easily for face to face meetings? Are they knowledgeable about statutory regulations unique to your country?

You need to determine whether the cost savings of an overseas operator is worth the loss of local knowledge and accessibility.

2. Proven Track Record

One of the reasons for outsourcing is to access skills, knowledge and expertise beyond what can be delivered in-house.

Gaining an in-depth understanding of the capabilities and track record of all your potential payroll management companies is essential.


  • Whether they offer an industry best payroll management service at the scale for what your business needs.
  • Their client list and ask for case studies and references
  • Who will be appointed to your account and what their experience and credentials are
  • Whether they can undertake the total management of payroll services including employee query management and resolution

3. Flexible Service Delivery

It sounds like an obvious question but does the vendor actually offer the services you are looking for?

If you are after a flexible, bespoke payroll service you will need to look into eliminating vendors that only offer a one-size-fits-all product that may not deliver what you require.

Also make sure to investigate what safeguards they have in place to avoid failure of delivery.

A high quality payroll management provider will have contingency plans in place in the event of disasters.

4. Compatibility

As a long term supplier, relationship compatibility shouldn’t be a ‘nice to have’ it should be a ‘must have’.

Look into whether the payroll company has other clients within your industry, and if they share similar company and service values as your own.

5. Technology

Look into the payroll software solutions of the company.

Are they using an alternative supplier’s technology or have they developed their own application?

The benefits of having developed their own product lies in the company’s in-depth knowledge of their own system. The capabilities to automate processes and make real-time data accessible to businesses for key decision making are certainly value-added features.

If a company is using an alternate supplier’s technology ask them what their capabilities are in achieving a quick turn around on any IT issues experienced or upgrades required?  Ask what the two supplier’s relationship is like.

With either option make sure that the technology can integrate easily to your current business systems.

6. Transition Management

Whether you are transitioning from an in-house model or changing vendors, the move from one to the other needs to be as smooth as possible.

Ask your suppliers what processes they have in place and what investment they are willing to make to ensure that it is done as efficiently as possible.

Ask them for their implementation methodology detailing the stages, who does what and the level of expertise you need to retain for the transition.

Find out what tasks and level of expertise is required in-house to support the vendor with the transition process.

And ask what happens if you want to transition out and what the costs are for moving away from the payroll company.

Remember if you cut corners at the start, it could catch up you in the long term.

7. Financial Security

Due diligence should be undertaken into the long term viability of your payroll management service provider.

It is especially important to negate any risks associated with the reliability and accountability of the vendor as a company.

ACTION: Download our Outsourced Payroll Supplier Comparison Rate Card to use during your vendor search.