The payroll industry has grown to such a degree that there are now hundreds of payroll providers and online payroll systems to choose from. Where payroll providers are concerned, a few big names dominate large portions of the market. Some of them offer specialized solutions for certain industries. For example, BenefitMall offers specialized solutions for the restaurant and construction sectors.

As an employer, it is easy to get comfortable with your payroll provider. It’s like anything else. You get comfortable with what you know, and you are reluctant to look elsewhere even when you probably should. It is just easier to leave things as they are even if your experience is no longer what it used to be.

There are very legitimate reasons for sticking with a payroll provider whose service is not what it used to be. But there are equally legitimate reasons for jumping ship. If your provider is demonstrating any of the following, you might want to think about making a switch:

Repeated Security Issues

Data security is non-negotiable in the payroll arena. Payroll providers are entrusted with all of the information hackers need to steal worker identities. They are also entrusted with employer information, including tax records and bank account numbers. As such, there is never an excuse for lax security.

A payroll provider experiencing repeated security issues is no longer fit for service. Security problems are a big red flag that suggests now is a good time to start looking for a new provider. Stick around too long and the provider’s issues could become yours.

Routine Payroll Mistakes

One of the big reasons for outsourcing payroll is to eliminate the mistakes that normally occur in-house. In light of that, you have a reasonable expectation that your payroll provider doesn’t make those same kinds of mistakes. If they do, there is something wrong.

Never forget that payroll mistakes can come back to haunt you. Even if you use a payroll provider, the law makes your company ultimately responsible for everything from accurate reporting to withholding payroll taxes. You cannot afford mistakes.

Outdated Software

The next red flag is outdated software. Outdated software can be a big problem if it is not keeping up with changes in the law and standard accounting practices. If your provider is still using a software package that hasn’t been updated in a couple of years, you are probably not getting the best possible service. The best payroll providers in the business are constantly updating their software to make sure it stays on the cutting edge.

Lack of Communication

A lot of employers contract with payroll providers under a shared responsibility model. This model dictates that the employer still has some responsibility – like entering weekly hours worked for each employee, for example. Good communication between provider and employer is critical under these sorts of arrangements. HR and payroll staff need easy access to payroll professionals capable of answering questions and solving problems.

Effective communication is necessary even with contracts that have the payroll provider handling everything. A provider unwilling to communicate freely and openly is either hiding something or not very good at customer service. Either case is cause for concern.

Any indication that it is time for your company to find a new payroll provider should be addressed with research. Take the time to look around and see what’s out there. Shop for payroll providers in the same way you would for any other business service. You want to make the right choice so that you do not find yourself in the same position a few months down the road.

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