Skip to content
Blog-Post

National vs Independent Payroll Providers

National vs Independent Payroll Providers

You’ve found your dream house – and it has everything you want, plus it’s the right price. You’re excited to move in and make it a home. There’s only one problem: you don’t like the neighborhood.

When you find an HCM platform you like, it’s similar to landing your dream house. 

But what if you don’t like the customer service? Or just feel it’s not a good fit? You’re going to feel stranded in a neighborhood where you don’t feel at home. 

Knowing the features you want in an HCM or payroll software is your first step to finding the right payroll partner. You make a list of features and functionalities you can’t live without, and you start your search.

The next step is figuring out where you want your payroll partner to be, aka, what’s your ideal neighborhood? 

  • Think of the national provider “neighborhood” as living out on your own on acres of land. When an issue arises, you’re going to be more responsible for figuring it out. 
  • An independent provider will be more like your friendly neighborhood where you know all of your neighbors by name, and your kids are best friends. 

At Whirks, we have close relationships with many of our clients because we’re independent. We know them by name, sometimes we know their families, and when they stop by the office, they’re greeted with a warm welcome. 

But this may not be what you want or need in a payroll partner. Let’s explore how these two providers are different and which is the right fit for you, your team, and your time. 

What’s a national payroll provider?

National payroll partners are large, publicly traded providers. They’re the most established names in the industry because they’ve been around the longest. 

Other up-and-coming national providers may not have the tenure these larger companies have, but they’re noted for combining payroll, time, and benefits software into one integrated solution. 

They are best known for their cloud-based platforms, intuitive ACA and executive reporting, and employee self-service options.

Typically, they are ideal partners for companies that have between 100 and 5000 employees. 

National payroll providers are set apart from their independent counterparts due to their deep discounts, 401k offerings, additional insurance packages, and integrations

Because they’re highly customizable, they are an ideal fit for large enterprise businesses (think about FedEx and Amazon) 

What’s an independent payroll provider?

An independent payroll provider is also called an independent service bureau. These companies are smaller, locally owned, and regionally-based payroll companies. 

They focus on delivering white glove customer service, i.e., you’re usually going to speak with one person who helps you leverage the technology and answer your questions. 

These regionally-based providers normally come at a higher cost than the national payroll companies and are less customizable. 

They stand out for their customer support since they serve fewer clients and can readily support your needs. Plus, they usually offer additional services like HR consulting, benefits administration, and other financial services.

Independent payroll providers are an ideal fit if you’re a small to mid-sized business and want an ongoing relationship with your support team. 

The Big Differences between Independent vs. National Providers 

We’ve defined four key differences between independent and national providers to help you understand if they’re the right fit for you and your business.

1. Company Size & Location

If you have ten employees, your priorities are different than a company with a thousand. There are various compliance issues and the data is more difficult to maintain. Let’s look at why company size and location matter for smaller and larger businesses. 

Midsize Businesses

If you’re growing quickly as a midsize company, you need to consider if the payroll provider works in your industry and with your state. You may have multi-state or international employees that are easier to handle for a larger, national company. 

You also may need to consider adopting the following features: 

  • A powerful Applicant Tracking System (ATS) for recruiting several employees
  • A Learning Management System (LMS) for training your teams quickly and efficiently 
  • A Performance Management System for giving managers access to employee performance and setting up approval workflows 

Smaller Businesses 

As a small business, you may want the same features for your team – and if you do, an independent payroll partner can provide them! 

However, you have fewer employees, and they wear several different hats. You’re still scaling your company and may prefer to get a good grasp on the basics. 

Having one point of contact to train you, answer your questions, and grow into a trusted advisor and friend may benefit you and your team as you navigate your small business needs.

2. Industry Needs

Each industry comes with a specific set of employee problems. For example: 

  • If you’re in construction, you must segment employee labor for job costing. 
  • If you’re a federal or state government office, you may need to have certified payroll options. 
  • If you’re a home health care agency, you need to manage multiple shift differentials for medicare reimbursements. 

Most companies value a partner who is an expert in their industry. Be sure to ask colleagues, your CPA or business coach, and networking groups if a particular provider understands those specific needs. 

Don’t be afraid to ask a payroll provider for a case study in your industry, a white paper, or even an industry-specific reference if this is important to you.

3. Customer Service

It’s best to ask every provider what ongoing customer service looks like. Let’s divide this back into midsize and smaller business needs. 

Midsize Businesses

If you’re a midsize business, you may have an experienced HR director and a team dedicated to supporting your payroll and HCM needs. 

In this case, they are probably tech-savvy, and a chatbot or self-help feature is all they need. 

Independent providers will assign you a dedicated customer service representative to help you with any questions or concerns that arise. However, if you’re a growing business and purchase a larger package from a national payroll provider, you will receive the same service. 

Smaller Businesses 

You won’t purchase a package from a national provider that offers a dedicated customer care representative unless you pay for additional support as a small business. 

Having one point of contact is a lifesaver for small businesses, especially if you aren’t seasoned in HR issues, compliance, and running payroll.

4. Pricing

By this point, you may have an idea of who would be a better fit for you. But pricing is a huge factor in your decision. 

Most independent and national providers charge the following fees: 

  • A monthly base fee
  • A Per Employee Per Month (PEPM) fee or a per payroll process fee 
  • Fees for each module you need (like payroll, time, or benefits)
  • Charges for additional services (like insurance and HR services) 

Whether you choose a national or independent provider, you will probably end up paying the same amount for the same number of services and features. 

When you’re looking at pricing, watch out for any asterisks that denote hidden fees, and ask if you’re signing an annual or monthly contract. 

Most national providers offer deeper discounts for multi-year contracts. If you’re new to payroll and HCM processes, this may not be the best idea for your growing team. You’re still navigating through what you need and want as a business. 

Find the right fit for YOU!

When you buy your dream house, you never want to think about moving again. It’s everything you’ve wanted, but the neighborhood is what sold you. Your neighbors are friendly and always offer a helping hand.  

If you’re switching payroll providers, you probably want it to be the last switch you ever make. It’s not an easy process, and you need to partner up with someone you can trust.

To find the best fit for you, your company, and your team, you have to evaluate the national players and the lesser-known names thoroughly

Which provider aligns with your values? Do you like their technology? Is their customer service what you want?

Independent and National providers can both fulfill your needs – but identifying which is best is the tricky part. 

If you own a larger business that’s growing quickly, you have to hire several employees and find a platform that will scale with you. 

But if you are a startup looking to hire your first couple of employees, and you know nothing about payroll, taxes, and compliance, you may consider opting for an independent provider. 

Remember to evaluate as many options as you can, enroll the help of an unbiased party, and find the payroll partner that aligns with what you need, what you want, and can help you take every step towards success. 

Curious about what other questions you need to be asking? Check out our article on the Top 5 Crucial Questions to Ask a Potential Payroll Provider. 

Posted in

Gia Rolen