Human capital management (HCM) refers to financial functions that help organizations manage their human resources. The functions include payroll, benefits administration, labor relations, and compliance management.
As companies grow and want to process more data, they often find running multiple payroll options costly and time-consuming. Due to the increasing complexity of managing these processes through existing systems, organizations may push for newer HCM and ERP (Enterprise Resource Management) solutions to improve efficiency.
Why It Might Be Time to Switch Payroll Providers
Payroll providers are developing new solutions that allow businesses to streamline their payroll, HCM, and benefits administration. An increasing number of organizations are making the switch to new HCM and ERP systems because of the following benefits:
To Streamline and Consolidate Activities Into One Platform
Companies may find it more cost-effective to consolidate their payroll and HR functions by moving the data and reporting into a single secure system. A unified platform will let you consolidate actions currently fragmented into separate platforms into one streamlined process.
To Gain Business Agility and Improve Decision-making
Performance management programs are effective when integrated into a company’s overall business processes. A new HCM provider gives you real-time access to data, and hence, you have better insights.
A new payroll provider will help you collect, analyze, and act on data faster and more effectively to provide individualized performance feedback. This way, you can make informed decisions that improve the performance of your employees and the organization.
To Minimize Costs Due to the Consolidation of Services
You can gain a significant return on investment (ROI) by switching to HCM cloud applications. As you replace several legacy platforms with one solution, you will see cost savings due to the overall efficiency of your operations.
Switching Payroll and HCM
Regardless of the size, companies need to provide their employees with timely payment and benefits, and payroll is essential to achieving this goal. Here are some tips on switching payroll and human capital management options.
Conduct a Deep Dive Internal Assessment
Before you begin your search, make sure you have assessed your needs and requirements. Know what functionality features support your business so that you can find a system that will easily integrate into your business processes.
It’s critical that your HCM and ERP systems work well together so that your operations run smoothly.
To do so, assess your existing strategies, needs, and objectives, then determine which platform is right for your company.
Determine Needed Services
Find out what services different platforms offer. There are many platforms with various features and prices.
Determine the services you need to run your payroll and human capital management before choosing the platform to implement. You should also ensure that any integration guides are available to help with the implementation.
Study the Terms of Your Current Contract
Before you begin your search, thoroughly review the terms of any existing payroll management platform contract or human capital framework. If your current agreement has expired and you have the option to renew, you may have a better chance of negotiating a more reasonable cost for your business.
Read the fine print of your existing contract before you begin searching. You also need to know the terms of any migration packages offered by the new service provider. They include terms that can help you avoid additional fees or loss of time when switching payroll providers.
Choose the Right Time
It is best to switch payroll providers towards the end of a calendar year if you intend to do so. You will only need to pull some of your previous payroll information if you do it at that time.
Switching midyear necessitates additional work in terms of filing and paying taxes. Aim for the start of a quarter if you cannot switch providers at the beginning of the year. If even that fails, just make sure the switch doesn’t prevent you from paying your staff on schedule.
Inform Your Old Payroll Provider
You should inform your present payroll provider about your intention to switch. The notice will help you avoid issues arising from a lack of prior communication, such as extra fees or time-consuming processes. You can let them know what features attracted you to the new payroll service providers, so they evaluate the pain points in their services.
Informing them will ensure no surprises when it comes time to make the changeover or if there are any applicable fees they want to reimburse or waive.
Pick a New Payroll Company
Once you have determined your needs and the features, you must have a new provider. You must look for service providers that meet your criteria and match your company culture. Do some research to determine the best fit for your company.
Collect Info for Your New Provider
Before you identify the proper payroll or human capital management provider, you must collect relevant information about how it will work. Determine the new platform’s services, what licenses are required, and how much they charge.
If you need clarification on whether a payroll or HCM provider is right for your business, contact them regarding their services ahead of any decision-making. Learn more about their products and services before you choose so that you can make an informed choice.
Set Up Your New Contract
Once you’ve decided on the payroll or HCM provider, you need to set up a new contract before you hire the company. You should be familiar with their terms and conditions before you sign because it will save time in the future if there are any applicable changes.
Notify Employees
You will want to notify all of your employees so that they can begin preparing for the change. It will minimize any potential issues with training, technical support, and billing. You will also want to notify your employees of the transition because they may have questions or concerns about their benefits or roles in the new systems.
Final Thoughts
One of the most critical aspects for you to consider when looking into an HCM software provider is the features it offers. The features will clarify how the system will work for your business. For example, it’s important to have good integration between your HCM and ERP systems. When you select the best human capital management system for your business, ensure that the solution is flexible to meet future needs and accommodate changes.