PAYROLL IN PRACTICE
WHEN DO COMPANIES DEPLOY IT?
You now know what payrolling is, but what can you do with it? We get that answer from practice. We analyzed the payroll utilization of 100 companies in 2020 and 2021. Conclusion: they apply payrolling for completely different purposes and different target groups. Take a look.
WHY DO ENTREPRENEURS OPT FOR PAYROLLING?
Many companies in the Netherlands employ employees under a payroll agreement. Why? That often varies from company to company. From an analysis among a hundred companies, as many as five main reasons emerge why entrepreneurs use payroll.
Convenience
'Being an employer' involves the necessary regulatory and administrative work. This doesn't bring a smile to the faces of most entrepreneurs. They want to look for opportunities in the market and be strategic. They want to be entrepreneurial. By working with a payroll company, they outsource their administrative tasks and duties. This keeps their hands free to do business.
Shifting risk
For small and medium-sized companies, continuing to pay staff in the event of illness is one of the biggest cost risks. Not when they employ (part of) their staff on a payroll basis. Then the payroll company bears this type of labor law risk. These entrepreneurs also know for sure that they do not run the risk of additional taxes and/or fines due to incorrect payment of payroll taxes and premiums.
Hiring in your own hands
Many business owners would like to recruit and select their own employees. They want to be able to decide who works for their company. Also with personnel they hire. This is not possible with temporary staff: the temporary employment agency must then play a role in matching supply and demand. With payrolling, entrepreneurs are allowed to recruit someone themselves and then appoint them on a payroll basis.
Remote HR department
Updating contracts, processing sick calls, providing paychecks. These are all things a payroll company takes over. A good payroll company will also advise you on how to best deal with legislation and regulations or how to handle personnel matters. In short: as a client, you immediately have a remote HR department at your disposal. Especially for companies without their own HR department, this is an important reason to choose payrolling.
Good for employees
Business owners want to have things to be well organized for their employees. Particularly for smaller companies, it is difficult to ensure that their employees, for example, are guaranteed to have their money on time, receive the right paycheck at the right time or are able to attend training courses. These entrepreneurs mainly opt for the assurance that their valuable employees are in good hands with the payroll company.
WHO DO ENTREPRENEURS USE PAYROLLING FOR?
Entrepreneurs not only have different reasons for payrolling; they also deploy it with different intentions for different target groups. From the analysis among the same 100 payrolling entrepreneurs, the following four "employee groups" emerged as the highest.
Regular employees
Payroll is often used for employees who work part-time or full-time on a regular basis. They rotate in everything like a "regular" employee. This happens mostly when the motive for the employer is in 'convenience'. The business owner wants 'own' staff, but also wants to outsource the employment.
Interim-professionals
Sometimes business owners know in advance that an employee will only be employed for a certain period of time. For example, because he or she replaces an employee who goes on maternity leave or because he or she is needed for a project that runs for a maximum of 1 year. Because being an employer is short-term when working with an interim professional, entrepreneurs find it easier to outsource.
Knowledge migrants
Even entrepreneurs who prefer to have all their staff on their own payroll prefer to outsource the hiring of knowledge migrants (highly skilled employee from outside the EU). In order to hire a highly skilled migrant, you must be an IND reference, among other things. It also involves more obligations, procedures and risks than hiring an EU employee. The payroll company then takes over.
AOW'ers
When an employee reaches state pension or retirement age, it is automatically "end of contract. However, many business owners are happy to continue using the knowledge and skills of these experienced employees. Conversely, many pensioners are happy to continue working a few days a week. Companies regularly use payrolling to retain this target group for a longer period.
