Apr 21, 2021 Florent Hainaut

Why is it the right time to change your payroll service provider?

Few companies dare to challenge their payroll service provider based on price or the quality of the service obtained, and this is a mistake. Moreover, it is not always necessary to change service providers in order to achieve optimisation. Here are a few tips.

What do you need to take into account in your analysis?  

You need to start with an inventory of the current situation, before going on a market tour. As in most cases, contracts are rarely revised on a regular basis, there is often room to review the existing conditions. Depending on the analysis, different scenarios are possible: renegotiating certain aspects of the current contract - such as price conditions, IT side-effects - or considering a change of provider. In the latter case, it is necessary to measure the internal resources available to support this change, take into account the time required for such a transfer, etc. In this area, a change of supplier is only effective on 1 January and there is a 6-month notice period. So if you want to change provider next year, you have to give notice by 30 June at the latest! This is why the 2nd quarter is the best time to renegotiate your current contract or to call for tenders.

How complex is it to change your payroll service provider?

It is much more complex than changing telephone or energy suppliers. On the other hand, in theory, the process is more regulated than you might think: the payroll service providers have concluded a cooperation agreement between them in which they agree on who does what when an employer changes service providers; there are notice periods to be respected; etc. In practical terms, it all depends on how the project is managed. It is important to weigh up the expected financial and operational gains against the costs of carrying out the project itself. In small companies, the costs of the social secretariat are often not very high: the money saved may not be worth the effort.
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At what intervals should the conditions offered by the payroll service provider be reviewed?

If no analysis has been carried out for more than 3 years, it is clearly necessary to put it on the agenda. Technological developments are such that social secretariats are becoming more efficient: the cost of the same service is falling and this must be reflected in the company's remuneration. We must not limit ourselves to cost hunting, but the key is to find the solution that is best suited to the company's needs, at the most competitive price.  

What is the order of magnitude of the savings that can be achieved by reviewing the current contract with your payroll service providers?

If we remain relatively conservative, it is possible to expect a potential gain of 10 to 15% for a company that has not reviewed the conditions of its contract for 2-3 years. This does not necessarily imply a change of payroll service provider.