Blog Post
Quick Read
June 10, 2022

Three ways your organisation can benefit from payroll outsourcing

Outsourcing payroll may seem like a daunting proposition, but it may be what your organisation needs to succeed. Here are the benefits of payroll outsourcing.

Table of Contents

This question seems simple enough: Do you keep your payroll services in-house, or do you outsource this function to a third-party provider?

Payroll is a fundamental function to any business, yet it can be something that’s remains at the back of mind of many organisations, especially when it doesn’t seem broken. But a function doesn’t need to be broken for it to need attention. Payroll is a complex process that increases in complexity as an organisation grows, and the various tax compliance, reporting, and administration requirements require a significant investment in staff, systems, and procedures.

Every organisation has a unique culture that informs its payroll practices. One size does not – and cannot – fit all. That’s why it’s important to have the right payroll services:  leaders have the choice to outsource payroll to an experienced partner or invest in software to give in-house payroll the best tools.

By outsourcing the payroll function, managers help their team grow and focus on other complex tasks that are critical to the business. Here’s more on the benefits of payroll outsourcing.

1. The right decision allows you to take control by letting go

The “right” amount of control in terms of payroll services will be different for every organisation. Some businesses may prefer an in-house approach, while others opt for outsourcing payroll. However, outsourcing a function such as payroll does not equate to loss of control.

When it comes to outsourcing payroll, letting go can deliver substantial gains. Outsourcing can potentially reduce operating costs as bulk of the processing is handled by a team of experts, giving business leaders the ability to focus on business growth while minimising risk in today’s uncertain environment.

2. Outsourcing payroll can give your in-house team a leg-up

One of the outcomes of an outsourced payroll approach is the benefit your team will reap. Payroll efficiency is easily overlooked, and many companies invest in a payroll system once and don’t look at it again for years.

Considering the importance of paying employees, this historical lack of investment can’t continue. Moreover, a payroll manager who is stuck with an antiquated system is a flight risk. If they watch your competitors zoom past with powerful analytics, cloud technologies, increased compliance, and risk and fraud management, you may be looking at an empty chair in the back office sooner than you think.

An outsourced payroll approach means expert payroll practitioners are brought into the fold to support your team and improve your process. Getting pay right the first time and ensuring compliance in a supported environment will keep your payroll team fully engaged.

3. You’ll encourage business continuity

Finally, an outsourced approach also ensures business continuity in times of crisis. Events such as natural disasters and IT infrastructure problems can put incredible pressure on in-house payroll teams, especially if they’re directly affected. What would happen if any of them fell ill, had to take care of a loved one, or went offline? How can you ensure that your staff still gets paid?

Without a payroll recovery solution in place, companies risk facing late or completely missed payrolls, contract breaches, and potential non-compliance to legislation. This is on top of employee morale and productivity suffering from a challenged payroll department. Outsourcing your payroll to a third-party payroll provider gives your HR team the support it needs to simplify the essentials, so they focus on keeping the business running.

But isn’t an outsourced payroll approach a costly one?

As with every important business decision, determining whether outsourced payroll is right for you will include a cost analysis. Outsourcing payroll does come with a larger financial investment, but it can create a bigger ROI down the road by reducing the risk of non-compliance and making more room for strategic work so your team can focus on the core business.

In any case, an outsourced approach is worth investigating, especially given the benefits listed above. Start a conversation with an expert vendor in the continuously evolving Asia-Pacific region who can help ensure your local and international compliance needs are part of any solution.

There are plenty of bells and whistles built into modern payroll systems, and new payment technology leaves clunky, antiquated systems looking like a horse and cart on a motorway.

Perhaps it is time to rethink your approach to payroll and whether it’s really serving your organisation.

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