HR Biz


How To Choose Your 1st Payroll Company


So it’s finally here…..  You have successfully hired employees and need to transition from your business checking account to an actual payroll system.  With a variety of choices out there it’s important to make a selection that will fit your employee/employer needs and still maintain the budget.

In order to identify which way to go there are some basic factors to keep in consideration:

  • How many employees will be in the system

  • W2 employees, contractors or both

  • Are W2 employees hourly, salaried or combination

  • Have you set up UI (unemployment insurance) and/or tax accounts with appropriate state agencies

  • Do you need/want standalone payroll or integrated timekeeping and leave hours tracking options

It’s important to have these items defined in order to make an educated decision during the vendor selection process.  It may come down to which one gives you the ability to perform the necessary functions with greatest ease of administration. Even though the evaluation may seem repetitive or tedious, a sound selection is a conscious choice to be efficient, compliant and employee friendly.

If you do not have a dedicated HR resource (employee or consultant), as the business owner it will be your task to set up and view demos of the respective systems. In most cases you will be able to get a feel for maneuvering around the application and also view what employees will see if that is an option selected.  

Pricing will be similar, usually on a per employee basis sometimes with discounts for volume (more employees, lower costs).  Keep that in mind when making a decision since your ability to scale will be important as operations grow.  Bells and whistles will be offered but you want to remain focused on immediate needs with reasonable potential for items that will fit with the business concept and strategy.  For example, being able to link and integrate with a 401K product would be great. The ability to run cost comparison reports between divisions and biometric timekeeping …. not so much at the early stages of growth.

A savvy business owner will evaluate the following:

  • how user friendly is the product

  • ease of implementation and administration

  • where does it fall in the budget

  • vendor customer service - delivery of the promised results and ongoing support

Take your time, research, research some more and when in doubt ---- get some professional assistance.

Nicole Mitchell