When It’s Time to Outsource Your Payroll

As a business owner, you will have to weigh the costs versus the benefits in every decision you make. While maintaining an on-site HR department is the traditional way of managing payroll and other employee services, it’s quickly becoming an outdated method. More businesses are finding that outsourcing their payroll needs to a third-party service is beneficial for a number of reasons, including those listed here.

Save on Operating Expenses

One of the most obvious ways outsourcing your HR will save you money on your organization’s operating budget. When you hire a third-party payroll service, that company will charge you a fee for processing payroll, withholding taxes, and conducting other related services. Click here to learn more about the benefits of outsourcing HR work.

The fees they charge you and their other customers will be used to recruit and train new employees, provide wages and other benefits, and perform other tasks that your own HR department would otherwise have to perform. This saves you the time and wages you would have to pay to your own full-time employees in addition to eliminating the costs associated with recruiting your own qualified HR personnel.

Eliminate Productivity Drains

Each pay period, your office personnel are pulled away from other assignments to process the pay for everyone in the company. This is a very time-consuming process, and it doesn’t do anything to contribute to the organization’s productivity.

When you outsource your payroll needs, your staff can be redirected toward more productive tasks. You can assign them new duties or utilize their expertise to help you take on special projects. They won’t have to stop their regular tasks to process payroll, which means they will be more efficient in everything else they do.

Benefit From Professional Expertise

When you hire a third-party payroll service, you can trust in the high quality of the service you will receive. Their employees will have the education and training to ensure they’re efficient in maintaining accurate records and submitting payments in a timely manner. They will also keep up to date on the newest tax law changes to ensure all of their clients are protected from penalties and other adverse actions that might otherwise result from making tax errors.

In this way, a payroll service serves as a buffer between your business and the government, taking on the responsibility of making sure your organization and its employees remain compliant.

Reduce Your Need for In-House Personnel

Amid the ongoing pandemic, lockdowns forced almost every business to look for ways to make remote working possible. Those lockdowns have lasted longer than expected and, even when people start returning to work, there will be changes to the office environment. Instead of having to make significant structural changes to your business’ offices, it may be more cost-effective to simply limit the number of employees in the office at a given time.

You can allow some employees to continue working from home, but outsourcing services, such as payroll, can eliminate several office positions. This can help you create a safer workplace environment in addition to helping you cut those operational costs. Once those positions are eliminated, you’ll have more room to spread out your existing office personnel to create greater social distancing for your employees.

These are just a few reasons to consider outsourcing your business’ payroll needs. While you may be apprehensive about making this change, taking the time to research the different payroll services in your region can alleviate most of that concern. To get started, ask other business owners in your community which services they use for managing their payroll. You may be surprised to find out how many of them are already outsourcing their payroll and HR needs.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.