Payroll pros in demand

By Steven Van Alstine and Wendy McLean
|Canadian HR Reporter|Last Updated: 11/21/2002

Payroll consulting in Canada is a growing market, but let’s start by first defining the difference between payroll consulting and payroll outsourcing — yes there is a difference.

Payroll outsourcing is when an organization hires an external firm to process its payroll either in its entirety or only a portion. This type of outsourcing may include:

•collection of labour data (time and attendance);

•deductions and calculation of net pay;

•creation of management reports;

•printing of paycheques; and

•preparation of tax filings.

However, as part of the outsourcing services, many payroll outsourcing firms may provide payroll consulting services similar to “independent” payroll consulting where consultants are hired by an organization to provide payroll expertise. This expertise can take many forms including:

•an audit of current payroll processes;

•legislation and compliance expertise;

•software reviews, recommendations and implementation;

•mergers and acquisitions of two or more organizations’ payrolls;

•interim staffing due to workload, staff turnover or maternity leave; and

•training of payroll staff.

With that said, is there room to grow in the payroll consulting marketing? Yes — organizations are looking to streamline payroll processes, make them more efficient and better manage bottom lines.

In 2001, Canadian businesses spent an estimated $66 billion on outsourcing services including IT, HR, finance, accounting and customer service, according to the Outsourcing Institute of Jericho. Approximately 20 per cent of outsourcing expenditures are spent on HR/finance/accounting — the groups usually responsible for payroll.

Many of today’s payroll consultants are finding themselves working for larger organizations on longer-term projects (lasting six months or more) such as the implementation of a new system. While short-term projects (less than three months) for small- to medium-sized organizations are left looking for a qualified payroll consultant.

This current void of consultants for shorter projects offers some great opportunities for experienced payroll professionals who are considering a side-step in their careers. But, before taking the consulting plunge, payroll specialists should do their homework including: checking out the competition, the services offered, the potential market and the evaluation of the business risks involved with starting one’s own business.

Steven Van Alstine is manager of the payroll resource group of the Canadian Payroll Association and Wendy McLean is co-ordinator of marketing and communications. Visit www.payroll.ca for more payroll information and resources.

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