Having been in the payroll outsourcing industry long enough, I can tell why companies shy away at the very mention of the word. Everybody is entitled to their beliefs, and in this case, it is common to assume that outsourcing is expensive, risky and, like most CEOs think, beyond one’s control. For many companies, outsourcing is an additional burden rather than a solution.
Research by globalpayrollassociation.com in its ‘Next Generation Payroll Services Market Analysis 2017’ pegs the growth of the global payroll services sector at a CAGR of 4.1%. Its report estimates that the industry could be worth more than $21 billion by 2021. Data such as the above, point to the fact that the world of payroll outsourcing is much bigger than what most of us take it for.
Globally, payroll outsourcers are combining people analytics & cloud technology to offer highly-secure HR data in real-time. Services are excelling the once-humdrum routine processes and permeating personal devices like our smartphones, where AI seamlessly supplies users with instant payroll & HR data.
Regardless of such advanced technology, companies still fear the risks involved. But one should take note that outsourcing payroll is unlike outsourcing IT or any other business processes that contain confidential data or trade mark material. Payroll is only about disbursing pay to the company’s employees in a timely manner. It deals with no risk factors and is mostly an administrative task that is handled externally.
If companies are wary of ceding control to outsourcing firms, then I’d say it’s a classic case of misinformation. Many senior executives believe that once they outsource services, they do not get to oversee the functioning and eventually lose control. That’s just a myth.
Outsourcing companies only work according to stipulated guidelines from their clients. Contracts are drawn to such detail that any unauthorized handling is viewed as overstepping that mutual agreement. That said, payroll companies are also obliged to inform their clients of any discrepancies that may arise during the contract period.
Many organizations that have in-house finance departments feel that outsourcing is just a colossal waste of resources; just another white elephant in their long list of get-rid-ofs. But my question is why look at it that way? If you have four people in your department servicing payroll and HR requirements for 200 people, I’d say you need more help than ever!
Every employee needs his payroll on time. And it’s not just that. Their taxes have to be calculated individually and according to the correct deductions. Besides this, you need to offer HR services – which includes leaves, insurance (yes, another complicated issue), claims, bonuses, performance pay and medical expenses (which includes employee’s dependents too).
The in-house department may not have its services available on cloud-based services, making it difficult for employees to get their HR or payroll data on the go. The small team managing all these
