Payroll is one of those critical functions that may not directly increase sales. But delays or errors in payment can affect employees’ morale and reflect negatively on the financial stability and reputation of the business. With a growing trend towards business outsourcing non-core functions of their operations, it comes as no surprise that payroll outsourcing to third-party service providers is gaining popularity. What do business actually gain from outsourcing payroll? In this article, we’ll explore the benefits of payroll outsourcing and how it helps the employers to focus on other critical aspects of the business.
Channelling time and manpower resources to better use
When you are running a business, time is, quite literally money. Processing payroll in-house is tedious and time-consuming. It requires business to allocate their manpower to support the important but mundane and administrative back-end function of payroll processing. The continually evolving business landscape is pushing the boundaries of HR capabilities. HR has become the key driver in supporting business in strategic areas such as organisation development, talent management, performance management and employee engagement. Outsourcing payroll will free up HR department’s time which can be utilised for core functions that are strategically more important for your business.
Minimising Compliance Risk
Employment regulations and compliance requirements can be complex and constantly changing, and vary from country to country. Business must stay up to date on changes in tax rules and employment legislations. Penalties for errors, omissions or late payment can be very costly and expose the business to additional liability. A good payroll provider will ensure that your payroll process complies with the current guidelines and offers capabilities that go beyond what businesses can achieve on its own. It often has a dedicated team of experts keeping up to date on all the changes that could affect the payroll, ensuring that business is in compliance.
Harnessing Technology and Improving Data Security
How safe and secure is payroll data in the company’s server or network? Do you have the latest security updates installed and processes in place? Quality outsourced payroll providers protect and store data on highly secure cloud-based servers and use cutting-edge encryption technology to ensure your critical and sensitive information remain safe. They also use electronic payment methods so that if an error occurs, it can be easily traced, helping to protect business against potential losses. This is all included in the outsourced services they provide, while attempting to do the same in-house would be very expensive.
Integrating of different HR functions
Human resource management and payroll are critically connected yet remain different disciplines. An integrated robust HR management system allows businesses to manage the entire workforce with one system. It eliminates the need for multiple software platforms and messy integrations. A good payroll provider offers cross-functional collaborations with related systems, which can offer many benefits over separate functions, including time savings, increased efficiency, and reduced IT and administrative costs.
Corona virus has forced upon us the most substantial change in working practices for decades, but it may also provide the best opportunity to rethink how we work. An outsourced solution will deliver peace of mind and free up time in your business, ultimately saving you money and reducing compliance risk.