Reason for Outsourcing Your Payroll Services

October 10, 2017

Experts have long recommended outsourcing non-core functions to the appropriate service providers. These non-core functions do not earn profits as they can’t be charged to customers. Although they are essential, they do not differentiate your business strategically from competitors. In most businesses, administrative and back-office activities such as payroll are non-core functions.

Hence it makes more sense for companies to outsource payroll to the experts. Many wonder what can they actually gain from outsourcing payroll? Would it be worth all their time and efforts to investigate and identify appropriate outsourced service providers? There’s all the added responsibility of transitioning the function outside to the chosen third party service. Will the benefits of outsourcing outweigh the efforts of doing it in-house?

Here are the reasons that make a compelling case for companies to consider outsourcing payroll services:

First and foremost – Cost

While larger companies can afford to maintain big payroll departments, smaller companies find it difficult to do in-house payroll service primarily because it is a major money burner. Calculate the hours your employees spend on payroll-related activities, plus payroll software costs, training costs, printers, printing and distributing payslips, creating tax documents etc, and you would be surprised by the outcome as compared to the cost a payroll service provider can offer.

outsourcing Payroll services

Leverage Expertise

Payroll functions typically consume a large proportion of company’s resources. The staff in charge of the payroll also needs to be trained specifically to manage the payroll function as a smaller part of their overall responsibilities. By outsourcing payroll, these companies can free up these resources and allow their staff to concentrate on more essential tasks. If needed they can even reduce their staff’s size or assign their more important roles. Outsourcing payroll functions enables companies to expand and scala their services as and when required.

Speed and accuracy:

Payroll outsourcing companies are able to process complex payrolls at a great speed, providing a quick turnaround time as compared to in-house services. Most payroll mistakes that take place can be lead to a lot of problems. Whereas a good payroll service provider is far less likely to make a serious error than your in-house staff. They have the expertise, knowledge and finely-tuned checking procedures in place that make them more accurate and fast.


Payroll service, output, speed and quality are not affected by leaves, sickness or payroll staff leaving the organisation when outsourced. There are no risks that you may lose one of the key members of staff that deal with your payroll and all their knowledge walks away with them. It can be extremely difficult to replace them, causing a logistical nightmare on paydays. Management does not have to spend time training new staff or helping them understand the company’s payroll system.


There are quite a few payroll outsourcing companies that offer small and medium sized business total payroll packages in which various payroll requirements can be met. These packages are often flexible and meet specific business model so that companies don’t end up paying for something that they do not need.  There’s a lot to be said for the peace of mind that outsourcing payroll services can bring to a business owner or manager. No headaches, no hassles, no stress, no worries: You’re left to focus on running your business knowing your payroll obligations are dealt with correctly, efficiently and lawfully.

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