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Why Outsource Payroll?

There has been a progression within the school sector to outsource key operations. Outsourcing such operations is a valid and cost effective method allowing schools to focus on their primary responsibility and key skill sets, the education of students.

What started with Canteens and Uniform Shops has moved to Boarding House meals and School Maintenance operations. Today schools are outsourcing payroll and in some cases their full financial operations.

Outsourcing allows for a commercial view to be taken on what are in fact commercial activities. The businesses who specialise in these services have the necessary experienced and skilled staff to complete the required tasks.

The cost of an external party will be in most cases cheaper than a full time employee. The hourly rates may be much higher, but the hours taken will generally be significantly less. This can be because whilst they will have the same focus on accuracy and completeness as an employee would, their goal is ultimately profitability, which only comes from meeting the KPI’s set out in a contract.

Payroll is clearly a sensitive subject for a range of valid reasons. However that does not in itself preclude the option of outsourcing payroll.  Payroll professionals view times worked, hourly rates and fringe benefits as simply numbers, experiencing no attachment to the data. However they are aware of the confidentiality of the data and will treat it as such.

The time required to complete an end to end fortnightly payroll may take as little as a day a fortnight.  Throughout the year there will be additional tasks required, however the school will only pay for those hours agreed to as part of the contract negotiations which fixes the cost of the service delivery.

The outsourcing of Payroll is an opportunity that can come with less risk. Coverage of leave is the outsourced company’s responsibilities, where as in house payroll requires a second person trained in payroll.

There is also analysis to be completed around full utilisation of in house payroll officers. Many schools employ their payroll officers in a part time capacity role, meaning there is no one available to assist for all of the payroll fortnight whereas the outsourced resource is more likely to be available through the full payroll period.

If employed full time, the payroll officer will need to supplement their time with other tasks that may not be in their skill set or where a lower paid resource should be engaged to complete that work.

Many non-teaching roles have the ability to be outsourced. It should be carefully managed, but the savings can be evident once quotations are presented, especially when viewed from a ten year perspective. Outsourcing won’t work for all schools, however upon exploring the option in detail may provide options that have, to this point, been obscured.

Contact us to discuss our virtual payroll offerings or just for some straight forward advice to smoothing your payroll processes.

Payroll outsourcing