5 Reasons Why You Should Switch to an Outsourced Payroll Provider
The objective for Payroll service professionals used to be simple: all they had to worry about was paying employees accurately and on time. As organizations increasingly look beyond local domestic boundaries, the complexity of payroll operations has expanded and evolved so that the level of payroll sophistication has increased as a result, the needs and requirements of organizations globally have become more complex.
Companies now want to combine HCM, payroll, employee analytics and forecasting for attracting, developing, engaging, retaining and managing their workforces. With one payroll provider, these needs are combined for a more practical approach, with key benefits including cost saving and visibility.
So, why should you switch to an outsourced payroll provider? Here are five reasons:
Improve Payroll Compliance
Consistency and compliancy can be a challenge. Payroll service errors cost the average FTSE 100 Company between $10 M and $30 M per annum [PWC report]. Evidently, failure to select the right payroll provider can work out extremely expensive for a company, not just in terms of money but also business reputation.
Some payroll problems are commonplace: therefore, it is a good idea for a company to have prior knowledge of these issues, so they can be avoided at all costs. Managing risk and compliance is an unprecedented change for multinational companies that continuously face problems in managing payroll. Investing in managed and comprehensive outsource payroll services in order to drastically improved efficiency, for employees and managers alike, is desirable.
Offer multinational delivery capability and global mobility
As mentioned in Monika Garg’s blog in Personnel Today, companies around the world need to employ the right people in the right locations, for the right salary, to make business sense. Compliance is a key driver in Payroll service, particularly for clients that have small employee populations outside of their key established locations.
Provide additional HR services
The role of payroll is especially important in streamlining key HR processes for a globally dispersed workforce. HR administrative functions, service delivery, talent management applications, workforce management and HCM applications must be in conjunction with payroll and broader integrated offerings to provide companies with precious information about their workforces.
Reduce business costs
One of the smart ways to address the need for an outsourced Payroll service provider is to demonstrate the cost of not switching. It may be costly to integrate an outsourced provider at first, but in the long-term money will be saved, not to mention the fact that increased compliance puts businesses at an advantage.
Organizations that struggle to obtain visibility of the end-to-end payroll processes and effectiveness of controls can find it challenging to maintain clarity in terms of roles and accountabilities.
It is important to think globally and act locally when it comes to payroll, which can be achieved by choosing a global provider with local knowledge. Most companies are facing the inherent problem with HR and payroll systems of not being compatible, as each country has its own system and rules that simply aren’t compatible with the regulations of others. This could potentially be costly and challenging to manage and maintain. If businesses don’t integrate they are faced with dealing with different currencies, tax and social security requirements, as well as different jurisdictions and regulations.
In short, choosing a payroll outsourcing provider ensures that companies are avoiding duplication in terms of effort, overall making for a more consistent employee experience involving just one provider, one contract, one point of contact, and the roll-out of a single payroll system with visibility across all geographies.