Payroll outsourcing is finally becoming part of strategic conversations, and a well-planned holistic approach that can transform your business. Payroll outsourcing services are being widely adopted across the globe by businesses of all sizes. These services can complete payroll tasks more efficiently and cost-effectively, allowing human resource staff to be more productive and focus on other important jobs. With the continuous development of payroll technologies, it is believed that more businesses will outsource their payroll operations in aims of becoming more efficient and well-organized.
Payroll outsourcing in a business means engaging an external party to handle all payroll related activities. Outsourcing of payroll functions is generally done to reduce cost and save time required to deal with financial tasks related to a payroll. Hiring an external firm to handle payroll activities means a business organization can do away with the need to hire and train a large in-house payroll staff, buy appropriate software package for payroll functions and remain constantly updated about complicated tax regulations.
Components of Payroll Outsourcing
Outsourcing of payroll activities is beneficial for all kinds of businesses, regardless of the organization having a large payroll or a mid-range or small payroll.
Payroll outsourcing generally includes all activities related to payroll processing and other payroll-related functions. Payroll processing includes several activities like maintaining employee records, calculating employee salary and wages, computing and adding bonuses, distributing payroll, generating payroll related reports and complying with the taxation laws of the government.
Why to outsource company Payroll Management?
Outsourcing of payroll activities is beneficial for all kinds of businesses, regardless of the organization having a large payroll or a mid-range or small payroll in terms of:
Processing payroll is more expensive than you might think. It’s not just the cost of hiring and paying payroll staff, which can be significant on its own, but rather the cost of keeping the department moving. This means investing in both hardware and software, constantly updating security measures, and continually hiring more skilled personnel as the needs of the company grow more complex. Simply put, this kind of investment just doesn’t make sense when there are more budget-friendly alternatives out there.
When it comes to payroll, you need to get the numbers right or you’ll get into trouble with the IRS and let down your employees. However, with varying tax rates, a multitude of different time sheets and pay scales, different benefits and coverage offered as well as voluntary withholdings, it can be tricky to get it right. When you invest in managed payroll services, you get guaranteed accuracy, so you can ensure that your workers get paid correctly and promptly, every time.
More secure and authentic
Outsourcing is often more secure. While sending out your payroll might seem risky, the truth is that most payroll security issues occur in-house. Again, payroll companies concentrate only on payroll, so their security measures are created specifically with payroll in mind. If you want to make sure that your payroll data is secure, you should trust a company that’s in the payroll business.
No matter how efficient a company is, it is till by nature obligated to follow the statutory & legislative requirements. This is particularly critical in payroll processing, where a company has taxation, superannuation, Modern Award and Enterprise Agreement rules to follow. Simply put, payroll outsourcing improves compliance in both legal and financial fronts.
Payroll Technical Expertise on demand.
One of the overlooked benefits of outsourcing is getting access to better technology. Payroll technology is always changing, but most businesses can’t afford to be on the cutting edge. Since payroll companies depend on technology to provide their services, they’ll make the investments that your business cannot. This means that you’ll always have access to the best in the industry, even if you don’t have to go through the painful process of upgrading yourself.
With payroll outsourcing redirected to the hands of Certified Payroll Experts, you now have a team of world class experts monitored and managing the process.
Payroll outsourcing and it’s Market Dynamics
Payroll outsourcing is the fastest-growing segment of the global human resource outsourcing (HRO) market. Organizations are rapidly adopting payroll services to achieve cost reduction. They either outsource a single process or the entire set of services to enhance the existing function. Most of the payroll outsourcing functions are related to finance and accounting (F&A), human capital management (HCM), and shared service centers. Organizations maintaining an in-house team for tasks such as payroll, time and attendance, workforce administration, and benefits administration spend 20% more than organizations that outsource the same functions.
The analysts forecast the global payroll outsourcing services market to grow at a CAGR of 5.56% during the period 2017-2021. Contributed by – Diksha