For finance manager Pär Merlenius of hairdressing chain Nikita Hair, outsourcing payroll management was the obvious choice from the beginning. When he was also commissioned to outsource the accounting he had more doubts and was afraid of losing control – a fear that turned out to be unfounded.
Nikita Hair was established in Norway in the 1980s (yes, the name comes from Elton John’s hit) and today it is the Nordics’ leading chain of hairdressers. By 2006 it was time to establish the company in Sweden, and finance manager Pär Merlenius immediately realised that the company needed a good business partner to handle its payroll management.
Why did you choose to outsource your payroll management?
“It seemed obvious, because I was working alone and didn’t have quite the right skills. We were also growing very fast and, unlike many other salons, everyone who works for us is an employee.
“We evaluated several companies and decided on Azets because their prices are reasonable, their consultants are highly skilled and they have good IT systems. It was also important to make life easy for our employees in the salons, so that they could focus on their clients.”
In 2013 the Group management decided that Nikita Hair in Sweden would outsource its entire finance department, just as it had already done in Norway. Merlenius asked for tenders from several players in the market and once again chose Azets, because of their competitive offering and good customer relations.
What did it feel like as finance manager to outsource the accounting too?
“It didn’t seem obvious like outsourcing the payroll did. At the time I was very keen to keep it in house, because I thought it would mean better control. And I don’t think I’m that different from other finance managers in that respect.”
Did you lose control?
“No. There was a certain degree of adaptation, but I noticed quite early on that I still had control thanks to the good insight into the systems and the collaboration with Azets’ consultants. It’s easy to see the details, I get quick answers and there are no delays. If there had been delays, I would have grown tired of it. So in retrospect, everything turned out well and my misgivings were unjustified.”
What would you say are the benefits of outsourcing?
“Before we were far more vulnerable. There were so few of us in the department that there weren’t any margins. This wasn’t sustainable with the pressure, and there was no delivery reliability. Now I know that I’ll get all the deliveries on time and that the material is accurate. Outsourcing has also freed up time so that I can focus more on establishing new salons. I’m more flexible and not as tied to my desk. This also means I can follow up things better than before.”
How has this freed up time?
“My job became far easier when I started working digitally on invoice management and was spared all the paper invoices. Over the years there have been continuous improvements to the processes, procedures and systems. You can tell that Azets is a driving force in digitalisation and automation. This gives us a boost. Our working method is more efficient and automated than before.
“It’s also more efficient in the salons when employees can report their times and approve invoices directly in their mobile phones between clients. There will be a great improvement in efficiency next year when we digitalise the daily takings and no longer have to handle cash by post. Azets has a ‘near-shore operation’ in Romania, where some of the work tasks are handled. The consultants in Romania work in the same systems and use the same procedures as the Swedish consultants, who are the customer’s main contacts.”
“I noticed quite early on that I still had control thanks to the good insight into the systems and the collaboration with the consultants.”
Can you tell that some of the work is carried out in Romania?
“The only clue is that certain e-mails are in English. There are no difficulties or sluggishness in the processes and I don’t know what Romania does and what the consultants in Sweden do.”
Do you have any tips for anyone thinking about outsourcing?
“I think it’s worth phasing it in, so that you get into your provider’s mindset and they have time to get to know you as a company, because that takes time. A good customer-provider relationship is also important. Our relationship with Azets has always been good. The consultants and I have a personal dialogue and we even have fun together. We’re like colleagues and that makes the job easier. Our journey has been good and I’m positive about the future. I still have control and that’s important to me.”
About Nikita Hair
Nikita Hair is Sweden’s largest chain of hairdressers, with 33 salons and 250 employees. The business was established in Norway in the 1980s and in Sweden in 2006.