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    Combatting the Payroll Associate Shortage: Managed Payroll as An Alternative to a Full-Time Employee

    A business owner writing a payroll check sitting at a desk.

    Combatting the Payroll Associate Shortage: Managed Payroll as An Alternative to a Full-Time Employee

    June 30, 2021

    Payroll processing is a high-effort/low-reward activity. It’s complicated, time-consuming, and, let’s face it, thankless. No one gets a pat on the back when payroll is done correctly, but miscalculate one deduction or accrual and people come unhinged.

    With Baby Boomers retiring in record numbers, Millennials and members of Generation Z are slow to sign on as payroll professionals. It’s just not “satisfying” or “meaningful” to calculate payroll and personal time off balances. The topics of payroll processing, wage garnishments and the subtle nuances between exempt and nonexempt employee status is better suited for a conversation with an energy vampire than a barista. For these, and other reasons, there are thousands of payroll vacancies in the U.S. today.

    In many instances, managed payroll solves this dilemma and eliminates the need to handle these tasks internally. You simply outsource all or a portion of your payroll processing responsibility to a company that specializes in it rather than managing it yourself. That company can run the payroll for all your employees, or you can just hire them to handle complex situations such as paying external, non-permanent workers. Some will even jump in as needed to temporarily take care of your payroll.

    This guide is designed to help you decide if one of these options is the right move for your business. It explains managed payroll, looks at some of the most popular outsourcing options and provides an overview of the benefits of outsourcing payroll management to the pros.

    Types of Managed Payroll

    Managed payroll can fall into several different categories. You are likely to discover the following options as you research payroll solutions. The right choice for your business varies based on your unique needs, budget, and internal resources. 

    Emergency Payroll Processing

    Emergencies happen. Your internal payroll specialist may have gotten ill or quit without notice. You may be swamped or are unable to run payroll yourself. This is when you need emergency payroll processing support. This service may or may not come with a premium price tag, but rest assured your employees get paid correctly and on time. Companies that provide emergency payroll services will often give you recommendations on how to streamline your payroll process and improve automation.

    Interim Managed Payroll Processing

    Interim payroll processing is the solution you need when you're between payroll specialists or are in the midst of configuring a fully or partially managed payroll solution. An interim payroll associate processes your payroll while you interview candidates or while your new managed payroll platform is provisioned. They will ensure that your employees don't miss a paycheck while your payroll department is in a state of transition and can also provide client-side implementation support if you are implementing a new managed payroll platform.

    Fully Managed Payroll

    Fully managed payroll is an alternative to processing payroll in-house and/or employing a payroll associate to process it on an outsourced payroll providers platform. You will never have to hire another payroll specialist or worry if a member of your human resources or accounting team can serve as a payroll backup. The company you hire serves as your permanent payroll specialist and uses your outsourced payroll software to collect time, calculate payroll and run necessary reports that communicate with third-party retirement services partners and the like.

    Fully managed payroll is the right choice if you require confidentiality, can’t find quality payroll talent or are looking for an alternative to a full-time employee. Emergency and interim services are the best options if you require temporary support while an associate is on leave or you are looking to bridge a gap prior to adopting fully managed payroll.

    Payroll person

    3 Benefits of Managed Payroll

    Managed payroll offers several advantages. Businesses that outsource their payroll needs instead of hiring someone in-house can look forward to the following benefits.

    1. Predictable Costs

    Managed payroll companies generally charge you a predictable per-processing fee that seldom varies unless you need special work performed such as an audit of fringe benefits. Managing payroll internally also carries hidden costs related to turnover. You will spend money recruiting and onboarding your new payroll associate and bear the cost of benefits, office space, and other employee-related expenses. 

    2. Enhanced Compliance with Legal and Industry Regulations

    Payroll tax rates and compliance regulations are constantly changing. Some of the changes are relatively easy to manage, while others are complicated and confusing. This creates risk, but when you outsource your payroll, you can rest assured that the company you hire will ensure your business stays compliant with state and federal regulations. 

    3. Improved Accuracy

    Payroll mistakes happen. You may use the wrong pay rate, fail to apply the proper deduction, or make one of a million other errors. Managed payroll companies can improve the accuracy of your payroll process by optimizing your payroll software and eliminating manual processes that may have haunted your organization for decades. Be sure to “interview” the associate who will be processing your payroll to ensure they are tenured and love what they do. 

    Managed payroll services bring advantages to organizations of all sizes. Large companies benefit knowing they have payroll continuity and a built-in backup plan in place. Smaller companies, with only a handful of employees, are more likely to appreciate improved accuracy and their ability to focus valuable resources on more strategic business activities. 

    Contact Ignite HCM Consulting and Services Today

    Ignite HCM is ready to provide managed payroll solutions to your business. We offer a range of managed payroll packages, as well as emergency and interim payroll solutions. We also offer payroll software implementation and optimization for organizations that prefer to handle payroll in-house. 


    Contact Ignite HCM Consulting and Services today. We will help you assess your current processes and guide you toward the best payroll solutions for your needs.

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