The Case Against Bundling

Your payroll service almost certainly has a 401(k) administration product and having those two things managed by the same provider seems like it would make a lot of sense. But here’s the truth about bundling the two (and the bundling of any business service!)…

Choice

It’s unlikely that a payroll provider offering 401(k) solutions is going to have the same amount of choice as a 401(k) provider offering 401(k) solutions. You and your employees have unique needs.

Expertise

Payroll and 401(k) administration are different animals, requiring different knowledge sets. Just because you know one doesn't mean you know the other. Oftentimes when a provider that specializes in a particular service adds on other services, they’re simply not as good at the latter as they are the former.

Risk

When a problem arises with bundled payroll and 401(k) administration services, it can have a cascading effect, impacting multiple aspects of your business – and your people. What’s more, if at some point you want to move a service (say, payroll) elsewhere, detangling it from its bundled brethren gets complicated.

Scalability

Your payroll needs and your 401(k) needs may not grow at the same rate. Keeping them separate allows you to scale them appropriately.

Pricing

If bundling didn’t make a payroll provider money, they wouldn’t do it. And combining services often makes it difficult to know what each service costs.

Bottom Line

Bundle with caution. Nimbleness, flexibility and speed are valuable qualities that every business wants. By avoiding bundles, you can be ready for anything.