In today's day and age, payroll outsourcing has certainly revolutionized the way businesses operate. Initially when outsourcing took the world by storm, it was restricted to functions such as payroll process and data entry. It later went on to include the customer service operations market, bringing outsourcing to the forefront with more and more corporations taking notice.

Payroll plays a large role in business for a reason. It’s the cumulative sum of all of the financial records for employee salaries, which includes their work wages, deductions and any bonuses. The crucial nature of payroll means that it’s imperative for companies to pay close attention to how it is managed under their financial departments.

2019 reports by the Organisation for Economic Co-operation and Development states that the “GDP in Emerging Asia is estimated to grow by an annual average of 6.1% in 2019-23.” Asia has become a viable opportunity for companies to test their market to potentially set up remote operations. During this period, it is not uncommon for expats to be paid in multiple countries or currencies.

These transactions can create complications with payroll, which can cause further complications for a company that is looking to hasten its expansion in Asia. For this reason, it may not be the best use of time to have the local manager personally handle payroll transactions. Outsourcing payroll offers a solution to this problem, freeing up the valuable time of local managers. Entrusting the matter to an experienced payroll outsourcer also reduces the risk of error and noncompliance.

Processing payroll demands a lot of time and attention to detail. Every pay period follows the next, requiring business owners or their payroll team to enter large amounts of data physically and to be extra vigilant while doing so to avoid payroll errors. This is time taken away from critical tasks like building revenue and serving valued customers.

Even though payroll outsourcing can incur an overhead expense to the firm, it effectively reduces a company’s overall liability and cost, and ensures that more time and resources get spent on critical business functions instead, including the consolidation of their Asian expansion.

Having a pan-Asian payroll partners can help streamline this process.

In 2017 our Client, a worldwide leader in insurance and asset management decided to migrate its global shared services centre from Hong Kong to Kuala Lumpur. The step was in keeping with the company’s long-term strategic plan of innovation and technological advancement in Asia. As a multinational serving 108 million customers across 57 countries, the client was looking for a credible payroll outsourcing partner who could handhold them as they forayed into Malaysia. However they were faced with some rather complexed pain points:

1. Sensitive to Higher Costs in Certain Asian markets
2. Zero Information on the Compliance Landscape in Malaysia
3. Less Support in Terms of Employee Mobility within Asia
4. Lack of Secure, Trustworthy and Automatic Online Payroll System

The client discovered Propay Partners through its allies and tasked us to ensure that no stone was left unturned in the migration of its shared services centre. We understood their need for a transparent outsourcing partner who they could depend on for any kind of trivial or elementary information surrounding payroll and compliance.

For a start, we flew our tax consultants to their office in Hong Kong to train them on Malaysian tax systems so that they could have a well-rounded background in compliance before their transition. This was a novel and extraordinary experience for us, and we made sure that we gave them 12 months of unlimited tax advisory for all their expat staff who were moving from Hong Kong to Kuala Lumpur.

The client was also given a comprehensive payroll plan so that their pioneer team members could access touchpoints without any external support. We also made sure their teams’ salaries were not affected during this period. Our collaboration with the company brought down their internal payroll costs significantly through guaranteed meeting of timelines, constant reporting as well as flagging of issues.

Even though payroll outsourcing incurs an overhead expense to the firm, it effectively reduces their overall liabilities and costs, and ensures that more time and resources get spent on critical business functions instead, including the consolidation of their Asian expansion.

Payroll outsourcing has become one of the most pragmatic and innovative solution that companies are relying on to stay ahead of technology as well as excel in business during expansion. Propay Partners offers end-to-end managed payroll outsourcing services for multinationals wanting to skip tax penalties and inaccurate payslips. To learn more, visit us here.