Cloud-based software applications are no more an emerging trend. More and more companies are increasingly adopting solutions which are available on the web, hosted in secure data centers providing much-required technology edge, flexibility and cost efficiency. Payroll and HR solutions are no different. HR practitioners are opting for cloud-based payroll solutions as they realize that payroll processing is very dynamic subject: ever-changing legislative laws, to increasing demands for compliance. There is also a growing realization around data security and the fact that effective payrolling requires real-time updated employee data along with sensitive personally identifiable information like bank account numbers and DOBs.
How do you know which payroll solution to opt for? Here are five parameters that will give you a good idea of the suitability of a solution for your needs:
1. Go with a payroll expert
We have a plethora of payroll providers in India, ranging from around-the-corner CA firms to start-ups with jazzy mobile apps. We must ask a few questions when we are scouting for the right vendor:
- How long have they been doing payroll for?
- What is their track record in the market for consistent, error-free delivery (or with their clients)?
- Have they built up a formidable level of expertise through the years that speaks well about their quality of work?
A cloud-based system is just a data storage, retrieval, and delivery model; you still need the provider to know all about taxes and compliance. Remember, they are ever changing!
2. Look for business continuity and resilience preparedness
Several recent events have highlighted the importance of planning for adverse events (natural disasters, terrorism, industrial accidents, and severe weather phenomenon, to list a few). With the increasing frequency of such events, it is important to look at how you can ensure the continuity of business operations of the payroll vendor. Payroll is a very important function; does the solutions provider have the resources and contingency plans to avoid disruption to your business activities? Will the solutions provider be able to continue providing services during a crisis without affecting your workflow? (i.e. how is their disaster recovery?) Ask about uptime, levels of downtime, and in case of exigency what is RPO and RTO? Where is their DR location, and how much time will it take to bring it up online? These are just some of the important questions that will give you a good idea of how the provider might react in a worst-case scenario.
3. Ask for seamless integration
By the end of 2016, over 50 per cent of Global 1000 companies stored customer-sensitive data in the public cloud, according to Gartner. Despite the quick adoption of cloud-based platforms, it is not uncommon to find that for many organizations, the payroll system (whether in-house or outsourced) is not seamlessly integrated with the HR and finance systems.
When most of the organization’s data (sensitive or not) goes on to cloud, it’s important to consider the data flow mechanism between various enterprise solutions. Payroll data usually have two data points: a larger HR system for managing employee lifecycle, and financial ERP systems for managing the accounting and finance books. It’s important to understand the data flow protocols being used by the vendors, and how compatible they are with your existing systems, to ensure a secure exchange and processing of data over the cloud.
Imagine a scenario where your employee data, including payroll and other personal information, is inadvertently sent via email to an external recipient. This is possible if your company’s systems are incompatible with each other. So, take the time to understand how well the cloud-based platform will integrate with your existing systems.
4. Look at their data security
Most cloud-based solutions available today have similar offerings in terms of services. But when you are looking for a platform for your organization, make sure you know everything about their data security plan. The provider should have a robust, secure intrusion prevention system. Check for their patch management, ID management and vulnerability tests, as well as audit rights. Having three or four layers of data security is a good sign. We should ask some basic questions around access controls, audit logs, intrusion prevention and detection system, risk mitigation for breaches, etc.
5. Ensure scalability
Will the provider be able to upgrade technology features without disrupting services? As your company grows and expands, the provider may be able to scale up, but do also consider if they will continuously update the technological improvements to payroll software. You wouldn’t want to sign on a provider working with the latest technology, only to find out two years down the line that they have not kept pace with the cloud-based payroll industry! A good way to make sure you both are on the same page is to share your technological roadmap. Do also check if the vendor can support services across multiple countries, and get them to map out how they will handle compliance and maintain the consistency in employee experience as your company grows.
6. Go by the track record
A payroll provider with a solid track record will reassure you of the quality and depth of service. Do they have a good record of providing what they promise? Have they been consistent with their technology upgrades? Do they have satisfied clients? Some of the signs of stability have to do with the company’s financial performance. Companies always scouting for external investments and funding propositions may not be ideal prospects.
The digital age is certainly a double-edged sword. While technology and social media are making employees better informed, more connected and more vocal, this leaves organizations with less room for error. With good planning and the right cloud-based payroll platform, your employees and your organization can move on to focusing on your core business, instead of worrying about payroll.