European companies increasingly willing to outsource payroll

While the general willingness to outsource HR tasks hasn’t changed much since early 2020, payroll outsourcing is becoming more appealing. Especially Italy and Switzerland stand out. Whereas only 17% of Italian and 6% of Swiss companies would outsource all (or part) of their payroll in 2020, the numbers increased to 26% in Italy and 20% in Switzerland. Interest in outsourcing payroll also increased in Belgium, France, the Netherlands and the UK, compared to last year. The smallest differences are seen in Germany, with only a change of 0.5%, and Ireland, with a decrease of 1%. About 43.5% of European companies are actively trying to improve their payroll processes, either with running projects or with projects to be carried out in the short or long term. Also, payroll jumped from number 8 to number 3 on the list of HR areas that are most suitable for outsourcing. An explanation might be that HR managers prefer to hand this to a trusted partner because of legislation complexity on the one hand and business continuity on the other hand. Only HR processes automation and compliance with socio-legal regulations appear to be outsourced more. Both are topics that make the process of payroll go smoother.

 

Companies in Belgium, Italy, the Nordics, the Netherlands, the UK, France, Switzerland and Austria consider payroll to be among the top 5 HR areas in which third parties can make a difference. The only countries where payroll outsourcing doesn’t make the top 5 are Poland, Ireland, Spain and Germany.