Outsourcing departments has become a popular practice for both big and small businesses. It’s a great way to reduce the number of full-time staff you have to pay while still having all of your to-do list covered.
One popular department to outsource is HR. Or, more specifically, payroll.
But is it really worth it?
Let’s find out.
The benefits of outsourcing payroll
Outsourcing saves you time and effort
Processing payroll is a long and tedious task, whether you have two employees or 100. Managing salaries in-house means you’ll need to dedicate a good chunk of time, either weekly or monthly, to calculate timesheets, work out tax and other deductions and ensure everyone’s getting the right benefits and pension payouts.
It’s a lot of effort. And if you’ve only just started your business, you can’t be expected to spend so much time on admin rather than finding ways to improve your offering for customers.
When you use a payroll outsource provider, you can regain your valuable time and reduce your own stress. These companies are designed to work efficiently on your payroll, with the core focus on getting it right – rather than getting it done quickly.
It can actually be cheaper
As mentioned, outsourcing means you don’t have to fork out a full-time salary for a member of staff to do the job. This isn’t the only way you can save money, though.
Everything from payroll software, payslip printing, training, and reporting can cost a pretty penny – something you won’t be paying for if you outsource it. Similarly, there is much more risk of error if you try to tackle payroll yourself, which can often lead to hefty compliance fines.
Payroll software is constantly being updated, too, with new products to boost efficiency entering the market all the time. Whenever legislation changes, payroll software needs to be upgraded as soon as possible – meaning that’s another cost to take into account.
If you don’t do payroll in-house, you don’t need to pay for these upgrades.
Payroll outsourcing provides security and expertise
Speaking of compliance fines, payroll outsourcing services do this day in, day out. They know everything that needs to be done, and the best way to do it. Their expertise is something that would take months or years for you to develop yourself – and you know you don’t have time for that even if you wanted to.
In 2018, around 250,000 companies in the UK were fined for simply missing their deadlines by HMRC – and that’s before any potential fines for inaccuracies and errors.
Very few companies have a payroll specialist that has no other responsibilities. Most employees of the modern business have to wear multiple hats on any given day – meaning there is plenty of room for error.
With outsourcing, these errors are no longer your problem. Not only will they occur much less frequently with the help of the experts, but you also can’t be held responsible if something does go wrong.
So, with more accuracy, fewer costs, and more time on your hands, it’s no wonder why so many businesses are now looking to outsource their payroll.
