The Top 4 Reasons to Change Your Payroll Provider

The Top 4 Reasons to Change Your Payroll Provider

Payroll is an essential part of running a business. If there’s one thing that every company has in common, it’s that their employees need to be paid. Because payroll is such a crucial and common element of a company, there are hundreds of payroll providers in the world who would be happy to provide you with this service. Unfortunately, many business owners do not put a lot of time or effort into choosing their payroll provider. This is understandable. A business owner has hundreds of things to do and a priority list a mile long. They simply want to choose something “that works.”
Choosing the first payroll provider that offers to do business with you is similar to buying the first home you see when shopping for a new house. Sure, it might be a good home, but if you haven’t seen others or researched what else is on the market, you’re likely not getting the best your money can buy.
When you think about your payroll provider, we want to ensure that you’re getting the absolute best. If you’re not, it might be time to make a change.

Reasons to Change Payroll Providers

Here’s a list of the top reasons to change your payroll provider:
  1. Cost
  2. Customer Service
  3. Ease of Use
  4. Product/Service Deficiency
As we walk through the top four reasons why businesses change payroll providers, think about your own payroll service. If you’re paying too much, experiencing poor customer service, having a difficult time using the system, or are just left with deficient products or services, it might be time to make a change.

1. Cost

Like just about anything else, the cost of a payroll service provider can vary dramatically. Because most business owners do not conduct extensive research on payroll services before choosing a provider, many companies pay premium prices for average services.
Another challenging aspect of tracking the cost of your payroll service is that most payroll providers will charge you for their services at the time the service is provided. This means that on the day payroll runs and your employees receive their paychecks, you’re also charged your payroll service fee. Because these fees exit your bank account at the same time as the money going to your employees, the cost may not be immediately obvious. While this is a common practice, it can make tracking your payroll costs somewhat confusing.
So, what can you do?
First, talk to your current payroll provider. Get clear on what they’re charging you, how often they charge you, and get a better understanding of all the services they provide. It’s very possible that they offer services that you’re paying for but are not using.
Next, shop around and get quotes from other payroll providers. For example, Eddy provides a full-service payroll experience for a very affordable rate. The vast majority of companies we’ve worked with were able to lower their costs by switching to our service.
Get quotes from multiple companies to ensure you have a better understanding of the landscape.
Finally, make your decision. If cost is important to you and you’re paying more at your current provider than what other companies are offering, it may be time to switch. You might also notify your current provider of the quotes you’ve collected and see if they’re willing to match different prices. They may be willing to bring your fees down in an attempt to keep your business.

2. Customer Service

Of course, cost isn’t everything. We “overspend” on products or services all the time because some things just offer a better experience. You wouldn’t want to get trapped with a super-low-cost payroll provider who never answers the phone. Customer service is a critical aspect of payroll evaluation and should be weighted appropriately in the decision-making process.
Just as you did when considering cost, think first of the customer service experience at your current provider. Here are some questions to ask yourself when evaluating the quality of your payroll providers customer service team:
  • Are they available when you need them?
  • Do you sit on hold for extended periods of time?
  • Do you talk to someone new every time you reach them?
  • Do you get forwarded to a call center located overseas?
  • Do your emails get answered promptly?
  • Do they help you when you have questions?
  • When you speak to them, are you speaking to an expert or a hastily trained hourly employee?
  • Are they willing to help you when there’s a crisis?
If you’re satisfied with the answers to these questions, then you might have already found a great payroll provider. However, from experience, we know that most companies would answer many of these questions negatively. If this is you, it might be time to make a change.
At this point, you’re probably wondering how you could evaluate a payroll provider’s customer service before becoming a customer? Wouldn’t you only know the answer to these questions after months (or years) as one of their customers?
Luckily, there’s a way to shortcut this process. When evaluating new payroll providers, ask for references. Have the provider give you a short list of customers that you can call an interview before making a decision. When you interview these customers, ask questions like the ones listed above. Spend time really getting to know how well you’ll be taken care of.
While you may not come away with perfect information, these reference interviews should give you a solid foundation on which to base your decision. Do this with a handful of payroll providers, and you’ll learn quickly which ones are customer-focused, and which are not.

Want the best customer support in the entire industry? Eddy’s payroll team has your back.

3. Ease of Use

So now that you’ve honed in on cost and customer service, the next step is to evaluate your payroll service on how easy it is to use. Ultimately, it won’t matter how cheap it is or how great the customer service is if you can’t easily figure out how to make it work.
There are varying levels of usability when it comes to payroll providers. Some providers will simply “do it for you.” They’ll take the task out of your hands entirely and run everything behind the scenes.
Other service providers offer software products for you to manage the payroll yourself. There are some software products that make this simple, fast, and easy, while others are old, complicated, and unintuitive.
Just as we did for the previous considerations, the first step will be to evaluate your current offering. How easy is it to use? Are you satisfied with how much (or how little) time you spend running payroll each month? Do you wish it could be faster? Easier? Less stressful? More intuitive?
If you’re not satisfied with the current provider, then it’s time to figure out how to improve your service. Start by listing out the qualities you’re looking for. Are you looking to control the process yourself or have someone do it for you? Would you like the ability to run reports? Would you like it to connect easily to your time tracking or PTO tracking software? Would you like to eliminate manual entry?
Once you’ve created your list, then it’s time to take that list to the new service providers you’re evaluating. If it’s a software product, have them show you a demo so you can see for yourself how easy (or difficult) it is to use. If it’s just a service, be clear on how it works, what you’ll need to provide, what they’ll do for you, and what the expectations will be.
Once you know what you want, you’ll be able to ask the right questions and narrow in on the payroll provider that can supply you with the right product for your usability needs.

4. Product/Service Deficiency

The fourth and final reason that many companies and business owners choose to change their payroll system is due to deficiencies they experience with their current product or service. There isn’t much to say beyond this--either your payroll service provider can do everything you need, or it can’t.
Well, what if you don’t even know what you need? Here are some common things to look out for:
  • On-time employee payment
  • Quarterly and annual tax returns
  • Access to payroll reports
  • Tax remittance
  • New-hire reporting
  • End-of-year W-2 preparation, filing, and distribution
Of course, those are some of the basics. Every company will need something that’s tailored to its specific needs. If your current provider isn’t able to service your business with everything you’re looking for, don’t make the mistake of thinking that another provider will be equally limited. There is a wide range of abilities when it comes to payroll providers, and you’ll be able to find what you need by evaluating multiple options.


If you remember nothing else from this article, remember this: A little research can go a long way. The common mistake we see from businesses is that they simply go with the very first payroll service provider who they meet. They don’t shop around, and many don’t even know what they’re looking for. Now that you understand how payroll services can vary dramatically in terms of cost, customer service, ease of use, and overall capabilities, you’ll be better equipped to find the service provider for you!
Eddy's HR Newsletter
Sign up for our email newsletter for helpful HR advice and ideas.
Simple and accurate payroll.
Pay your U.S.-based employees on time, every time, with Eddy.