TOP 5 Tips for Choosing a Payroll and HR-outsourcing Provider


There are two possible ways to keep an organization’s payroll competence up-to-date: either through continually applying the resources needed to maintain the necessary expertise and current knowledge in-house, or by outsourcing to a specialist that can provide payroll administration services for a predictable and transparent cost. Finding the right solution provider requires a careful selection process, and we would suggest to start by looking at a company with more than 30 years of experience in this field.

Szilárd Ocskay, CEO of Nexon Hungary

Tip 1: Look for safe and state-of-the-art IT-solutions.

Any reliable outsourcing solution depends heavily on the IT infrastructure in the background. Therefore, look for a service provider that not only has expert personnel, but also:

Runs its’ own IT-infrastructure to host the outsourced service, as this provides the basis for operational safety and data security;

Provides a self-service access system for employees and managers that facilitates paperless HR administration, e.g. electronic pay slips, cafeteria benefit declarations, scheduling and recording working hours, handling vacation plans, filling in and processing statutory forms etc.;

Offers a cloud based IT solution providing 24/7 access to the organizations’ data.

Tip 2: Look for a provider that can change with you.

Organizational needs, technology and statutory requirements change continually and unpredictably, and your payroll and HR administration needs to track and accommodate these changes.

Keep this simple by choosing a provider that provides a full range of services and has the ability to adapt according to your changing needs, whether this means modifying the number of employees covered or the portfolio of HR services provided. Your changing circumstances can be quickly and flexibly provided for by a service provider that has a mature and comprehensive set of applications, developed in-house and kept continually up-to-date to meet specific current Hungarian HR requirements.

Tip 3: Look for full liability.

Almost 18,000 employers were inspected by the Hungarian state labor authority during 2016. These investigations revealed non-compliance related to current labor law at 75% of the companies, and more than HUF 13 billion of penalties were issued in consequence.

Ensure your protection by choosing a company that meets internationally recognized quality assurance standards and that, through its service agreement, assumes full responsibility for any penalties arising from mistakes or mal-administration. Having a sufficiently high amount of liability insurance to cover the service provider’s activity is a must for your own peace of mind.

Tip 4: Look for clear and inclusive pricing.

Avoid unpleasant surprises: be certain what is included in the contracted costs and carefully check which tasks are covered by the agreement.

Eye-catching promotions like, “Get your monthly payroll for HUF 990 by arrangement” may well seem irresistible. However, often what initially seems like the cheapest option turns out not to be so when the fine print is closely examined. A remarkably low price often reflects a very basic level of service, with many “additional” – but totally necessary – requirements being charged for as “extras”.

Tip 5: Insist on top-notch customer service.

A safe and satisfactory level of customer service starts with a secured online task manager that ensures safe data communication between customer and service provider. It is complemented by a dedicated personal contact, who knows your specific requirements and can provide an answer to even the most difficult questions.

Additional tip: Although payroll and human resource administration is a mission critical task for any organization and requires significant resources and competent performance, it is not generally a main organizational competence. It is, therefore, typically a function that can usefully be outsourced. Our best advice to you is to talk to a specialist with decades of experience; go for NEXON!

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