HR departments of almost every organisationare largely responsible for a variety of functions. They need to overseeemployee payroll and tax filing along with other functions such as employeebenefit and health administration. HR also manages legal compliance and overseetraining and development of new recruits as well as existing employees. Thusvarious functions of the HR department become too complicated to maintainin-house. Companies who outsource their HR and payroll functions have gained severaladvantages that eventually support the company’s bottom line. And yet payroll and HR are two aspects of acompany that often don’t get the attention that they deserve. The average smallbusiness owner will spend between seven and 25 percent of their working hourshandling employee paperwork.
While outsourcing may seem challenging, it cancertainly free up time of employees and engage them elsewhere. Benefits of outsourcing HR andpayroll servicesReduced costsHiring new employees only for managing HR orpayroll can be a costly affair. Apart from their salary, companies also have topay various other costs such as health care. Taking on a full-time employee tohandle HR and payroll may not always be the best financially safe option. Thereare also other expenses that come with hiring new staff such as placing jobadvertisements or conducting interviews and buying office equipment if needed. Outsourcing isn’t cheap (not in a negativeway) but many companies have experienced a significant reduction in costs byoutsourcing HR and payroll services.
EfficiencyMaintaining an efficient and productive workplace is what every company strivesfor. By outsourcing there can be a significant increase in efficiency within HRdepartment. Outsourcing providers leverage advanced technology to streamlineimportant HR functions, such as payroll, benefit administration and compliancemanagement. It also ensures staff spends less time doing manual paperwork anddedicate more time to improve the efficiency and effectiveness of theworkforce. Higher productivity: Companies who perform these activitiesin-house know how much time it can take them. There are numerous tasks likecalculating payroll taxes, filing forms and trying to keep up with all taxcompliances, which take a large part of the day with these activities.
Outsourcing helps to free up this time andallows employees to concentrate on more important aspects of the company. Whilepayroll and HR may not appear to be important, actually processing all thepaperwork can lead to a decrease in productivity. Due to the cutthroatcompetition these days, companies should ideally focus on growing theirbusinesses by analyzing trends, reducing costs, as well as improving margins. Employee Development:Outsourcing also helps companies manage employee performance and development.They implement performance management plans that help employees understand andcomply with company policies and procedures. These steps can eventually lead tothem successfully meeting their business goals. Outsourcing experts regularly monitor employeeperformance and report all their findings to the management. That is one less worryfor the managers.
Reduce turnover: HR departments also have the responsibility oftaking steps to reduce turnover. This is because higher turnover can reduceproductivity to a great extent which leads to major losses for the company.Instead of forcing this responsibility on the HR department, companies canleverage the expertise and experience of their service providers to manage suchissues. To summarize, while it may appear that thecompany is losing control over some of its functions, it is definitely not thecase. By outsourcing HR and payroll functions,companies can focus on achieving their goals and growing at a much quickerpace.