Debunking Payroll Outsourcing Myths for UK School Leadership


Managing a school’s payroll is a complex task that requires careful attention to detail and specialist knowledge. In recent years, the ‘academisation’ of the education landscape and the many Local Authorities pulling out of providing payroll services have led to many schools considering reasons to outsource their payroll processes to an independent payroll provider.

It’s a big decision, and there are several myths and misconceptions that might be holding some school leadership teams back from making this critical decision. In this blog, we aim to debunk some of these myths and shed light on the benefits of outsourcing payroll to an independent provider.

Myth 1: Outsourcing Payroll Is Expensive

One of the most common misconceptions about outsourcing payroll is that it’s more expensive than managing it in-house. While there may be initial setup costs and service fees associated with outsourcing, the long-term savings often outweigh these expenses. Independent payroll providers have the expertise and technology to efficiently process payroll, reducing the risk of costly errors and penalties due to non-compliance.

Furthermore, outsourcing becomes a cost-effective solution when you consider the time and resources spent on training staff, maintaining payroll software, and keeping up with ever-changing tax regulations.

The other factor to consider is that payroll outsourcing is costed on a ‘per payslip’ price, so if your workforce numbers change, your costs reflect that, rather than being a single fixed cost.

Myth 2: Outsourcing Means Loss of Control

Some school leaders fear outsourcing payroll means relinquishing control over a critical aspect of their operations. However, this should not be the case. When you partner with a reputable independent payroll provider, you still maintain control over key decisions and can customise the service to meet your needs.

Outsourcing can provide better control over payroll accuracy and compliance, as experts are dedicated to staying up-to-date with the latest regulations and best practices.

In our experience, the technology provided to clients and the view of their data this provides, often far exceeds what they had previously, especially those who were using a Local Authority service.

In addition, the range of reporting and ability to drill down into data can provide far more insightful data. Data that you can be confident is accurate and up to date.

Myth 3: Outsourcing Is Only for Large Schools

Another common misconception is that outsourcing payroll is only suitable for large schools with extensive financial needs. This is not the case. We work with schools of all sizes, and their services can be tailored to your institution’s specific requirements.

Outsourcing payroll can be particularly beneficial for smaller schools, as it allows them to access the same expertise and technology as larger institutions without needing a substantial in-house payroll department.

Myth 4: It’s Too Complicated to Transition to Outsourcing

Transitioning from an in-house payroll system to an outsourced one might seem daunting, especially something as time-critical as payroll.

However, reputable payroll providers have experience in managing these transitions smoothly. It’s what they do, day in and day out.

At Dataplan Education, we have a dedicated Implementation Team with years of experience working with Local Authorities, in-house teams or other providers to get payrolls set up and move across quickly. Our 5D Implementation process takes new clients step by step through the stages;

  • Discover – an in-depth exploration of your payroll and workforce
  • Define – we map out the points of interaction and processes
  • Data – the data capture phase, including previous payroll and pension providers
  • Dummy Run – parallel runs alongside your current payroll to double–check accuracy before going live
  • Deploy – delivery of your payroll, including the initial first few periods before handing it over to your ongoing payroll teams

Myth 5: Data security may be compromised

There can be a natural reluctance to allow external providers access such sensitive and personal data as is required with payroll and pensions. Whilst this is an understandable fear, the reality is that your data is likely to be safer in an outsourced environment.

Third-party providers, including Dataplan, have invested heavily in their technology and systems to ensure data security. In fact, at Dataplan, we are ISO 27001 certified.

Myth 6: a payroll bureau can’t understand the complexities of school payroll, HR and pensions

This is a partially true myth. Not all payroll bureaus are the same, with most providing a service mainly to commercial businesses. Although there are many similarities, it is the detail of the different things that can catch many of them out and cause problems for the school.

If you move to outsource, check out their education-specific expertise and resources.

  • Do they understand teacher’s pay scales?
  • Can their software manage multiple contracts and job roles?
  • Do they understand the Burgundy and Green Books?
  • Do they have experience of Education Pensions

Outsourcing your school’s payroll to an independent provider can offer numerous benefits, including cost savings, improved accuracy, and access to expertise. School leadership teams need to dispel the myths and misconceptions surrounding payroll outsourcing and make informed decisions that can lead to more efficient financial management.

By partnering with a reputable independent payroll provider, such as Dataplan Education, schools and trusts can free up valuable time and resources, reduce the risk of errors, and ensure compliance with ever-changing regulations and legislation. Ultimately, this allows schools to focus on what matters most—providing quality education to their students.