Peer Responses on Outsourcing Payroll Processing

Response 1 Reply to Mecole Cooper
Hi! Azikiwe,
I think it is a great post of yours. You are right that eliminating the HR payroll processing department would save the company a lot of time and money. This additional effort could be invested in the core competency aspects of the organization such as production, marketing, promotion, and others. However, I believe that the outsourced agency needs to be in synchronization with the mission and vision of the organization. As the organization is devoid of the additional responsibilities of hiring executives, employees, or even the payroll work, it should outsource the agency after a great thought process. I believe that the cost factor, technology utilization, intellectual property, and core competency would matter a lot in this kind of decision-making for the organization.
Response 2 : Keyla Rodriguez
"Companies that outsource need to make sure that the compensation and benefits modules of the HRIS interface flawlessly with the provider’s payroll input. " (Kavanagh, Thite & Johnson, 2015). As the VP of Human Resource, there are a few factors I would consider when it comes to outsourcing payroll to a third party. The first thing that would come to mind is if the third party is equipped to handle the load of work and if they have access to the level of technology that it will take. The second factor goes hand in hand with the third. These two are the need to pay the third party and then also not needing to hire an HR specialist to handle payroll first hand with the organization. These two could potentially cancel each other out. Long as we are not paying more for the third party than we would the employee it would balance however if the third party costs more than the employee would it would be more realistic to lower costs and have the employee do the payroll entirely on the flip side if the third party is too much cheaper than the cost of the employee would be then you would have to consider the quality and reliability of the third party. Between not needing to hire that position versus the cost of the third party would need to be a balance and ultimately make sense.
Response 3: Cayce Graham
As the VP of Human Resources at Caterpillar, the cost of services, time to focus on other tasks essential to running the company, and access to experienced professional's expertise in the technology are three factors to consider when outsourcing the process of pay checks to a third party. To alleviate the stress of focusing on payroll, I decided to outsource payroll practices.
A cost-benefit analysis will help determine if the current HRIS in-house costs the company more money than outsourcing. Using the formula to figure out if the gap is positive or negative is essential to implementing the new system. For example, the gap may indicate a reduction in the cost for Caterpillar to process payroll through a third-party vendor. Then they should do so.
The companies HR department can work on objectives and training to enhance employee performance allowing them to focus on other areas needing improvement. HR must invest in their most significant asset (employees) by conducting training and assessments to build a learning organization and understand the employees' needs just as important as the HRIS. Outside vendors can help lighten the load of HR professionals providing them with time to addressing other valuable areas within the organization
Organizations can receive help from professionals who have experience in questions, such as payroll. ADP helps companies relieve the stress of HR duties. The company has provided 70 years of service (ADP, 2021). Therefore, a company looking to outsource would utilize ADP due to their experience. As the technology evolves, so has APD, or they would not still be in service for 70 years. They can provide companies with the best resources to enhance their HR department while taking a load off their shoulders because they already have systems that they can implement according to the organization's needs.