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Q&A Forum

What are the pros and cons to using an in house HRIS/Payroll system?

Rose Robbins's Profile


Topic Expert
Patrick Dunne
Title: Chief Financial Officer
Company: Milk Source
(Chief Financial Officer, Milk Source) |

I have had both. Pros for in house: More economical for larger companies, service levels that you control: Cons: Typically more cost beneficial to do outside, Technical knowledge is better at an outside service and you don't have to keep refreshing this knowledge like you would have to in house, new tax laws can be implemented easier in an outside service, you can make the outside vendor prepare files that can post directly to your ledger vs. using house IT staff, less IT hours used to support another application when using outside service

W Lee Penn II
Title: CFO, CCO
Company: Protocol Driven Healthcare Inc
(CFO, CCO, Protocol Driven Healthcare Inc) |

Depending on the size of your company and if HR is one of the hats you wear, you may wish to consider engaging with a Professional Employer Organization (PEO). This would be going a step further than just doing payroll with an outside service. A PEO will help you attend to many employee related issues such as health insurance, recruiting and hiring, safety and retirement programs. Because of the large number of employees that a PEO administers for its many employer clients, they have on staff dedicated experts in every area of empoyer responsibilities who become an affordable resource to you.

Linda Manson
Title: Owner
Company: PAT Company
(Owner, PAT Company) |

Me personally I've always concerned outsourcing payroll and HR functions. It is way to time consuming to keep up with all the new laws when it comes to payroll and hr. I recently outsourced our payroll needs to RPS of Tampa, Inc and I can honestly say I wish I would have done this earlier. I really think they are an outstanding company when it comes to our payroll needs.

Patricia Hickey
Title: Chief Financial Officer
Company: CCS
(Chief Financial Officer, CCS) |

For a small business, I can't imagine having payroll done inside the firm. There are too many changing tax laws, which get more complicated if you have payroll in multiple states. As for HR, I think it important to have that function within the firm, especially for employee relations and goodwill. However, as a small business we do use outside counsel often when the scope of the issue is deeper than our internal knowledge. This has been working well for us.


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