How do outsourcing partners affect payroll proficiency?
Employing staff in Belgium, France, Germany, the Netherlands or the UK involves complex payroll administration and legal requirements. It’s nothing time, expertise and effort can’t solve, but why invest in something that’s not your core business – especially when you can partner up with a complementary player that offers peace of mind? That’s what an increasing number of organisations think to boost their overall payroll proficiency.
Scores by country
External help to navigate the payroll maze
Outsourcing has its merits for most payroll subprocesses, but these are the ones for which partners provide the highest added value, according to hundreds of European companies: calculating payroll, monitoring legislation, collecting and integrating data, managing transfers to governments, and handling payroll documents. By taking over these crucial processes, partners guarantee correct calculations, legal compliance and maximum efficiency. It’s no coincidence that outsourcing is most popular in countries with high levels of payroll complexity.
Ria Vermeir, Unit Manager of Outsourcing Services at SD Worx Belgium
Payroll partners in the heart of Europe
Ranked from most proficient to least proficient:
Belgian companies are the pioneers of payroll outsourcing, with the first collaborations dating back to the period right after World War II. Today, Belgium still leads the dance. About 3 in 4 companies are willing to outsource their payroll to some extent. And it’s a genuine proficiency booster. With a score of 73.8, it’s by far the top result in our 2022 Payroll Proficiency Index. No other driver in none of the countries scores higher.
Whereas Belgian companies largely favour partial payroll outsourcing, French companies show the highest willingness for full payroll outsourcing, compared to the other surveyed countries. Nearly half of them feel (very) positive about the idea of entirely trusting a partner to handle their payroll – in particular SMEs (up to 250 employees) and mid-sized companies (250-3,000 employees). They see it as an effective way to get direct access to vast expertise and know-how.
The majority of Dutch companies in our 2022 Payroll Proficiency Index say payroll outsourcing is (very) easy in the Netherlands. That’s good news for both local and international companies looking for assistance with their payroll. In an age when new rules and regulations around working hours, expenses, benefits, allowances, etc. seem to pop up every other week, all the help is welcome. It allows your HR team to fully focus on value-adding projects.
Although payroll outsourcing isn’t as common in the UK as it is on the European mainland, British companies who do outsource (parts of) their payroll are positive about the impact it has on the total cost of payroll handling. And the bigger the company, the more this is true. To illustrate: 51.2% of large enterprises (over 3,000 employees) praise the financial benefits of payroll partners, while only 36.8% of SMEs (up to 250 employees) agree.
Payroll outsourcing has yet to show its true value in Germany. First, German companies are less inclined to contract payroll partners. Second, when they do, the positive impact is rather modest. The only payroll subprocesses that show high levels of satisfaction are data collection and integration, transfer to governments, and payroll calculation. Important sidenote: companies with employees abroad are much more positive about (full) payroll outsourcing.