The Real Cost of Not Outsourcing Your Payroll
Each and every business is different from the next: different in its size, different in its goals and different in its needs – but at the end of the day, payroll is something that every organization must manage.
When approaching payroll, there are two options: complete it in-house or outsource it to professionals. In running your business, you will undoubtedly be doing everything in your power to minimize financial risks, maximize your core business activity and out-do your competitors. However, turning down the opportunity to outsource payroll is often unhelpful to these aspirations.
Here are just a few reasons to consider outsourcing your payroll:
- You Are Incurring Direct & Indirect Financial Losses
- You Have the Cost of Financing In-House Payroll
Clearly, choosing to complete your payroll in-house comes at the cost of having your own payroll team. This practice is considerably expensive, as you must pay all the associated wages and benefits of employing the team, not to mention the other hidden employment costs, such as staff-retention and recruitment costs. If your business is reasonably small in size, there’s a considerable chance that the cost of employing this team would be significantly greater than the cost of using an outsourced payroll service as required.
- You Must Purchase and Update Expensive Software / Technology
One thing we can all agree upon is that payroll software is not cheap. When choosing to complete your payroll in-house, you will need to purchase and update the latest software for all your payroll needs. Such programs can include “benefits management” software, “time and attendance” management, as well as other services such as the automated sending of pay slips. By contrast, those who choose to implement payroll outsourcing have the privilege of a simple periodic payment. This means that their whole payroll function is taken care of in this one payment.
- You Have the Cost of Providing Training
Having your own payroll team comes at the cost of providing effective training. To ensure compliance, you must ensure that your payroll employees are always up-to-date with the latest government regulations and any changes in policies. Providing this training is time-consuming and costly. Those who choose to use outsourced payroll gain access to payroll experts, without having the worry or financial burden of providing the latest training.
- You Do Not Have Industry Experts to Ensure Compliance
As mentioned previously, payroll mistakes are all too common and all too easy to make. For example, you may assume that the overtime rate is 1.5 times the employee’s hourly rate, but this is not always the case. These unintentional mistakes can place your business in hot water. By contrast, those who choose to use payroll professionals have the peace of mind, knowing that the experts are always up-to-date with every last detail. Choosing to outsource payroll ensures constant compliance.
- You’re Wasting Valuable Time
I’m sure you’d agree that time is one of the most valuable resources. Completing your own payroll is hugely time-consuming, as it requires attention to detail and tedious re-checking of data every pay period. This process consumes efforts which could potentially be invested towards your business ventures. Any alternative which allows you to reclaim this time should be considered as highly worthwhile. Payroll outsourcing is so valuable as it allows you to reclaim this time, rather than spending it on administrative duties.
- The Knowledge Behind Your Payroll May Leave
Processing payroll is hardly an easy feat. Not only does it require a complex understanding of surrounding regulations, but also how to complete it for your particular business. In recruiting your own payroll officer or payroll team, you encounter the risk of the employee/s leaving, and this knowledge leaving along with them. Training and onboarding a new payroll officer for your specific business can be a mammoth task, often leaving your payroll processing in jeopardy while this retraining takes place. If you choose to outsource your payroll, you do not have to solely rely on your internal payroll team.
Depending on the size, structure, and industry of your business, you may find that some of these disadvantages do not apply to you, however, it’s likely that a majority of these setbacks will apply to your organization. Payroll outsourcing often offers a cost-effective solution to completing payroll alongside the added benefits of increased security, time-effectiveness and compliance, giving you complete peace of mind.
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