A reader recently wrote to me requesting my thoughts on payroll outsourcers and their HR products. This was written for a 500 employee organization. I'm posting because I don't think I've ever ranked payroll outsourcers. Here are my verbatim comments below:
I have not done any rankings purely on HR/Payroll outsourcers. Most of my knowledge would also be with larger organizations. However, below are my brief opinions in no particular order (not sure if they are on the blog or not). I only talk about national vendors below. Smaller regional vendors will provide better overall service quality, but their compliance standards
are questionable (tax primarily).
- ADP will almost definitely be the most stable environment for you regarding payroll processing. Their tax, garnishment and print/distribution processes are overall better controlled than their competitors.
- ADP products have changed fairly significantly over the last 3 years. PCPW is being phased out for newer and better internet products. These products will also include decent self service (as will Ceridian).
- If you are in a growth mode or think you will close in on 1000 employees in the next 5-7 years, do not consider PayChex. Period, end of statement. Otherwise, you can look at them but their HR is terrible and technology is very last century.
- Ceridian will allow more flexibility on the HR side. If you can manage an upgrade to their eSource platform, they will have much better HR functionality than ADP will. ADP has superior HR functionality that they only sell to larger organizations (over 1000 employees).
- Ceridian HR (see #3 above) must be used and implemented very carefully. Their product set has been pieced together over the years and is not truly integrated from a database architecture standpoint.
On the Customization comment:
- I find a significant difference between customization and configuration. Configuration is the changing of table values (for example adding cost centers, jobs or location codes). Customization is actually modifying/creating a table and adding core functionality that was not there before.
- Don't customize!!! Find a product that is sufficiently configurable to meet your needs. If you need to customize, Ceridian is more flexible. However, I've been to many companies that have customized their software and basically screwed up their whole PR process. Once again, ADP has stricter controls. For something like PR, this is a good thing.
- Your needs below (allocations, dept numbers) should fall in the config category. Either ADP or Ceridian should work fine.
Rankings for HR (500 employee company) (keep in mind I'm focused on Fortune 1000's and have a bias regarding what I think is decent software)
1. Ceridian eSource
2. ADP (don't remember the product name - and remember we're not talking about ADP Enterprise here)
3. None (PayChex isn't even worth mentioning)
Rankings for PR (you are going to be hostage to whichever processing center you are close to. Some processing centers within the same vendor will be better or worse than others.) You didn't mention what size organization you were 3 years ago. If you have grown, you might be able to expect slightly better service, but the real leap in service quality happens at
around 1000 employees.