According to the Merriam-Webster dictionary, strategy means “a careful plan or method for achieving a particular goal, usually over a long period of time.” Interestingly, the first known use of the verb “outsource”, also quoted from Merriam-Webster, was in 1979.

In this context, payroll outsourcing provides companies with a well-tracked strategy of several decades for business success. Where the phrase “business success” is not clearly defined. I’m going to call it “business goal” because that takes the pressure off a little.

The first step in unlocking success from outsourcing payroll as a strategy for your business is to define the goal of the strategy, which is conveniently the same as the reasons for outsourcing.

Outsourcing payroll has huge benefits for companies at all stages of growth, even a small start-up enterprise.  If you see payroll outsourcing as a strategic investment, the cost in relation to the benefit over time is sure to make any business owner consider it seriously.


Strategic Reason #1: Cost reduction

You read it right. Even though the service might look like a big, regular expense for your small profit-and-loss account, outsourcing payroll means your business pay a single fee every month. Compare this to regular expenses like payroll staff salaries, IT staff because you had to buy inhouse software, more expenses to keep the software updated, security protocols for safeguarding sensitive information, and training.

You can visualize it on a stress dial like the one below. Having payroll inhouse, your stress dial is going to jump to the uncomfortable red zone, whereas outsourcing this function will definitely tip it to a relaxing green.

Additionally, you have peace of mind that you would not miss important deadlines or compliance updates and incur penalties and fines. Payroll third-part providers are at the forefront of compliance updates, know 100% what payments, reports, and compliance are required, and when. All of this while you are sipping a quiet cup of green tea in your office, while reviewing your increasing bottom line and pondering over how to grow your company further.


Strategic Reason #2: Payroll automation

Your business is still small, but growing. You started out as a one-person band, which made manual payroll a breeze. Now your staff compliment is on 25 people, and manual payroll has just gotten less reliable. It takes an immense amount of time for you to ensure capturing of all the necessary staff information, management of their time, collating information from different sources. It is becoming an elephant in a cage. It’s time to set it free.

An automated payroll system is built into payroll outsourcing. The reasoning for payroll automation is quite simple: it makes payroll processing faster – like, a lot. Tracking variable data such as paid time off (annual leave, sick leave etc) and working hours for employees is less stressful, and it reduces the risk of human error. Payroll automation through outsourcing also provides better cyber security. Outsourced payroll services are in the business of payroll, and invest in the best systems they can. Your business will directly benefit from this.

Your staff can access self-service portals to update their information and log their hours, take leave, and so much more, reducing your time spent on all these tasks. You can wholly focus on growing your company.


Strategic Reason #3: Digitization

Once a company outsources its payroll, the route to digitization of the entire HR ecosystem becomes easier. With digitization of payroll and HR, you can access useful metrics to measure performance and an array of other metrics, print reports linking to the metrics to enable more tailored strategizing for your business. Still only for a monthly fee.


Strategic Reason #4: Centralisation

Payroll data is stored in one central location when you outsource the function. You don’t have to enforce deadlines for employees to complete their Excel sheets with the past month’s hours. You know where to find the overtime and absence management information for a specific period. It’s all in one place. If you have just expanded operations with offices in Dubai, Abu Dhabi and Bahrain, of your HR data makes managing all operations simpler, despite their locations. This way you ensure your company remains on track with your overall business goals, and you have uniform measures to track progress and support employees, no matter where they are.


Many more benefits

These are four compelling, strategic reasons to outsource payroll, but there are loads more strategic benefits. You don’t have to look far or think too hard. OPS are experts in offering Middle East-tailored payroll outsourcing solutions designed around the individual needs of each business. Talk to us today.