3 advantages of outsourced payroll
The decision to outsource payroll is not one to be taken lightly as a correct payroll run is vital to your company’s operations as well as employee morale. Outsourced payroll can help you to be successful in this area as it offers many advantages over keeping the process in house.
1) Reduction in risk
Payroll regulations and requirements are not only complex and varied at the federal, state and local level but as well they change frequently. Internal resources may struggle to keep current on the new changes and you may incur technology costs due to applying patches and fixes to address tax changes, not to mention the time and effort spent testing. Outsourced payroll vendors are skilled at managing these changes and can help you avoid government penalties due to late or incorrect tax filings. They will cover compliance topics and auditing too as this is a core part of their operating model.
2) Lower operational costs
Good payroll managers and staff can be hard to recruit and retain. The cost of replacing payroll staff can be costly and require lead time. Continued staff development such as on-going training, certification and professional memberships is often required to counteract this. When all of this is added up, what is your cost per payslip? Additional costs will exist such as software licensing, hardware and other internal staff such as IT.
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Outsourced payroll providers have both the staff expertise and technology to effectively provide payroll processing services as it is the focus of their daily operations and those ongoing costs are absorbed by the vendor. In addition they offer flexibility if you have acquisitions or divestitures, to be able to ramp up or remove staff with little lead time.
3) Enhanced user experience
Your employees live in a world that is 24/7. They expect information at their fingertips, at all hours. An outsourced provider can offer a payroll helpdesk beyond your normal working hours of 9-5, but integrated into your company’s branding and service standards.
As outsourced payroll vendors are providing their software to multiple customers, they offer features and functionality that appeals to users such as a payroll dashboard, online payslips and tax documents. Many offer payroll self-service functionality, saving time for both your organization and your employees.
Your company may find it cost effective to implement some of the additional modules that many of these vendors offer such as time-off or absence management, as these data elements often feed into your payroll system and can save you the cost of purchasing a separate stand-alone system.
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