The payroll and human resources market value surpassed $7 billion in North America alone in 2018 and is expected to hit $41.6 billion globally by 2026, according to a recent report by Transparency Market Research. In fact, some 80 percent of enterprises plan to purchase or upgrade their talent management solutions over the next few years. These figures add up to massive opportunity for payroll and HR service firms. It’s clear: Now is a great time to be in the payroll business.
Payroll processing and management is a natural and increasingly common next step for accountants and aggregators of small and medium sized businesses already offering related services. If you’re considering starting a payroll service bureau, make sure you’ve got these five critical elements in place before launching.
- Staying Tax Compliant: Payroll can be an incredibly complex undertaking, encompassing everything from tracking employee hours to setting up benefit deductions to issuing W-2 forms and filing payroll tax forms and reports. Errors and omissions, even unintentional, can mean both unhappy employees and hefty non-compliance fines levied by state or federal entities. It’s imperative that you and your staff keep up to the minute on all the applicable laws and regulations, which can vary greatly from state to state.
- Top-notch payroll processing software: Payroll processing software increasingly is designed to integrate and automate a range of functions including timekeeping, HR databases and ACA compliance tools. But all are not created equal. Today’s savvy employers expect highly accessible, cloud-based, intelligent and fully-integrated software solutions. They’re also looking for a high degree of payroll functionality and flexibility.
- A highly competent payroll processing team: Though a great payroll processing software solution will help automate much of the work, you’ll still need a team of payroll domain experienced staff to onboard and support clients and their employees. Industry standards call for one processor for every $125,000 in expected revenue to adequately handle your client load. When targeting potential processing employees, look for candidates with accounting, tax management and, of course, payroll processing backgrounds.
- A solid sales force: “Nothing happens until someone sells something.” So said automotive and marketing icon Henry Ford. But today’s top emerging sales professionals seek a much different culture and set of workplace standards than generations prior. Make sure you’re in tune with what’s important to contemporary sales pros, particularly the burgeoning Millennial workforce, expected to comprise 75 percent of the workplace within the next decade. And be sure to arm them with the most modern sales tools, including contact management, pricing, proposal and customer onboarding platforms.
- Strong referral sources: The payroll business, like most any business, is largely a “who you know” machine. In a recent LinkedIn State of Sales survey 79 percent of B2B buyer respondents said that, no matter the product or service, it is “very important” or even “critical” to buy from a trusted advisor. A top source? CPAs. They have the inside track on clients’ businesses and personally known the owners. That’s why warm CPA referrals on average result in an 85 percent close rate. Additional strong referral sources are banks and insurance brokers.
Whether you’re looking to start a new payroll processing firm or for revenue growth for your existing firm, Apex HCM offers a one-stop-shop for a full suite of intelligent, integrated and customizable payroll, HR and time and attendance solutions. Call 877-750-2739 or contact us online to request a demo of any of our software platforms.