Payroll management is complex, but critical to any organisation. Payroll outsourcing can not only save time, labour and money, but also offers an array of benefits that can clearly improve any business. HR and other business resources can focus on driving the company strategy, increasing productivity in all areas of the business.
Payroll outsourcing means that a company tasks an external services provider with the payroll function of the business.
1. Save time and increase efficiency
Payroll management demands a lot of time, understanding country-specific legislation, keeping up to date with any legislative changes, collating and managing all payroll information. This function is often on top of other in-house responsibilities and can be burdensome. Often the in-house payroll function would fall to HR. Outsourcing the function means HR staff have time to focus on their core responsibilities, aligning and managing the company’s dearest resource, its people.
Outsourcing also adds another layer of security to your employees’ data. The HR manager has peace of mind that the employees’ information is secure and safe. Outsourcing payroll means the employer does not manage data storage, ensure appropriate ISO certification and worry about the latest updates to safeguard the payroll data from malware or malfunction.
Payroll outsourcing companies offer secure data storage in the Cloud, which is highly secure, utilising gold-standard encryption and backup.
Additionally, HR no longer carries the responsibility to regularly train payroll staff and update payroll software.
3. Mitigate payroll risks
HR avoids issues like errors on payslips, administrative audits and late payments when payroll is outsourced. Third-party providers guarantee accuracy and on-time salary payments and they carry the risk, not the employer.
4. Payroll audits and declarations
Operating across regions with different rules, timelines and monitoring increase the complexity of payroll. A third-party payroll provider helps that company avoid errors and late payments.
5. Save money
The cost of outsourcing payroll is based on the number of payslips a company requires. This means the cost of payroll is clear and simple for budgeting purposes, simplifying HR’s budgeting requirements. HR also no longer need to train staff, renew software licences, or upgrade a system. That is a huge cost saver on many fronts.
When HR is looking to outsource the payroll function, investigate different third-party providers. Not all outsourcing services are created equal.