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6 Reasons Why HR and Payroll Outsourcing is Essential for Small Businesses in India

Client Advisor Team Leader
May 26, 2022

Payroll and HR processing are very complicated activities. Besides paying employees on time, the HR department deals with tax deductions, compliance, benefits and more. To add to the complexity, these requirements can evolve and change so tax laws in force 2 years ago may now be obsolete.

This is why it is best to allow trained professionals to handle your payroll instead of upskilling and learning the skill internally. Payroll outsourcing can be cost-effective, accurate and hassle-free. This article will discuss 6 reasons why HR and payroll outsourcing are essential for your small business.

6 Reasons Why HR and Payroll Outsourcing is essential for Small Businesses in India

While outsourcing is not a new concept, it has recently gained immense importance. It allows businesses to use professional knowledge for HR and payroll without spending a huge budget on it.

Here are 6 reasons why HR and payroll outsourcing is vital for your small business in India:

  1. Saves money and time

Time and money are crucial when a few individuals and professionals manage different tasks in a small business or a start-up. You have to manage your schedule for every task in the business, such as core operations, bookkeeping, HR and payroll.

In this situation, you can easily end up overworking yourself or pushing back HR and payroll functions which can lead to delays in payment of employee salaries.

A better option is to use a payroll management solution that allows you to streamline activities, including the company’s key HR and payroll goals. HR and payroll processing services just mean that a third party handles your HR and payroll saving you time and money. You are essentially paying a monthly fee which is less than the cost of errors, penalties, employee management and software upgrades.

  1. Advanced compliance

Compliance can be a nightmare when you don’t understand the rules and regulations that often change.

A payroll and HR service provider will help you manage compliance, including changing rules and regulations as per the current government laws. For example, how long are you keeping business records, are you deducting and filing taxes of employees correctly?

Outsourcing payroll can help in this case, because you don’t have to worry about changing compliance requirements. The payroll service provider will make sure that they are up-to-date with the rules, which will help them avoid mistakes. You don’t need to worry about if your records are appropriate and calculations are as per legislation.

HR and payroll outsourcing offers small businesses peace of mind.

  1. Employee Satisfaction

Making mistakes on pay checks and paying salaries late can upset your employees. You need to pay your employees on time and accurately as it is known that employees can start to lose interest in your company if they are paid late even once.

So, you can use payroll processing services for a better employee-employer relationship and outsourcing this activity helps to ensure that your employees are paid on time. You don’t need to think of bonuses, tax deductions, etc. The payroll service ensures and sends accurate payroll on time.

  1. Expert Knowledge

Managing an entire business is a hectic, time-consuming task, so even when you have a good understanding of HR and payroll, it can be a lot to take on this responsibility. If you hire a HR team for this, you need an expert to understand HR and payroll tasks properly.

However, for a small business, that is not always possible. HR and payroll outsourcing helps you to receive support from expert professionals without additional hassle. These are industry experts who fully understand HR and payroll activities. They specialize in different areas, which helps them to fulfil the requirements of your business.

  1. Automation Support

Other than support for payroll and HR activities, using HR services offers automation support. With the help of advanced tools and software, you can automatically update data along with many other HR and payroll activities.

This means that your attendance or biometric attendance system automatically connects with systems to help you track information. The employee and HR self-service portals allow tracking of details like leave and attendance and payslips.

  1. Data Security

You might be wondering how data security is managed. HR and payroll outsourcing providers have a secure system and structure. Whether you are accessing HR data via tools or sharing sensitive personal details of employees, it is secure in the network.

In-house, there’s a risk of data theft and fraud because systems are not secure.

A payroll service provider uses advanced security measures because they need to cater to the needs of many businesses. As a result, they take additional care of your data security and employee information. They can also back up your information for disaster recovery and management.

Before you outsource …

When you are finding a HR and payroll outsourcing provider, you should bear in mind:

  • Research the standard pricing structure in the market to evaluate the pricing offered by various providers you wish to work with.
  • Create a list of benefits offered by different HR services and then shortlist must-have services for your organization. Keeping this in mind, move forward and select the right provider.
  • Lastly, always consider the experience of the provider. This helps you to assess their ability to handle HR and payroll processing services.

TopSource Worldwide for HR and Payroll Outsourcing

TopSource Worldwide is a leading HR and payroll outsourcing service provider across the globe.

TopSource Worldwide has several flexible solutions to fit your requirements with appropriate expertise in the area. So, whether you have 20 or 20,000 employees, we have a package to fit your requirements perfectly.

Learn more about our services here.

Why Choose TopSource Worldwide as your Payroll Service Provider in India?

You may be wondering why you should choose TopSource Worldwide for the payroll processing service. Here are some reasons why:

  • Our service is a full-spectrum managed solution that helps you to ensure the efficiency of your HR and payroll.
  • We have automated employee self-service and HR self-service portals that help you to extract information without support.
  • There’s 24/7 secure access to your online data, which can be accessed, updated, and retrieved.
  • We have been in the industry long enough to understand compliance end-to-end. This allows us to ensure statutory compliance in your organization.
  • Our dedicated team of experts can help you with reporting, payroll processing and other HR activities.


You may want to handle HR and payroll processes in-house as a small business. However, at some point, you could start experiencing delays and mistakes. When that time comes, it is best to take help from experts and use payroll processing services.

HR and payroll outsourcing in India with TopSource Worldwide can help you streamline your payroll department. You can create timely, organized workflows for payroll dispatch, calculations and tax deductions. Learn more about our services on our website.


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Nena Petrovic
India Payroll Director
Nena Petrovic is the Client Advisor Team Leader at TopSource Worldwide, a leading Global Expansion services provider. She oversees and guides a team of client advisors, who communicate and collaborate with clients effectively. She is responsible for ensuring the accurate and timely processing of client invoices and payroll, as well as developing strategies and maintaining a client-centric approach.

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