In the past, companies took pride in handling all aspects of business in-house – marketing, HR, sales, finance and more. However, with globalization, the benefits of outsourcing have become prominent, and leading companies now outsource many functions to experts and tech-savvy partners to make operations easier and cost-efficient.
Over the years, payroll has evolved into much more than merely processing payslips. Today, it involves various other elements like managing employee leave, statutory compliances, employee self-service, tax declarations and deductions etc. By opting for payroll outsourcing services in India, your company can focus more on the strategy and core competencies while experts handle the payroll solution.
Payroll outsourcing presents excellent advantages and a few disadvantages worth weighing before choosing the right payroll outsourcing company.
What are the Advantages of Using Payroll Outsourcing Services?
1. Delivers High Cost-Savings
Companies can save up to 40-50% in their operational costs with payroll outsourcing services and choose a far more superior service with 24×7 assistance. On the other hand, in-house payroll processing can be costly with considerable expenses like paying the payroll team, subscribing to modern payroll and leave management software, managing employee queries, ensuring statutory compliances etc. With a payroll outsourcing company, organizations can minimize expenses and quantify their visible and hidden costs related to payroll solutions.
2. Promotes Better Efficiency
For many of your employees/workers, salaries are the only source of income, and their entire family depend on receiving the accurate amount and on time. As a result, companies must focus on maintaining deadlines and processing payroll on time. Any errors can create a negative impact. With the help of experienced professional expertise and high-quality outputs from a payroll outsourcing company, you can ensure that employees’ livelihoods aren’t affected due to inefficiencies or delays.
Once your payroll processing is in professional hands, it will reduce many hassles and offer complete peace of mind. Also, payroll outsourcing services in India provide 24×7 assistance, ensuring that all your business processes always run smoothly.
3. Leads to Lower Upfront Investment
Choosing payroll outsourcing services for new companies or growing SMBs can reduce the investment capital for HR services. When starting up a business, setting up your HR services and teams as well as investing in the software and processing can be costly. Not to mention, you need to hire experts to handle all the payroll systems. Instead, if you decide on payroll outsourcing services, you can divert the funds to revenue-generating functions of the business-like finance, marketing or sales.
For growing businesses, the lower investment costs can make significant difference in helping the business succeed in the future.
4. Ensures Compliance with Local Regulations
Along with ensuring the correct payment to employees, companies also need to follow statutory compliance with local laws and jurisdiction. If you’re a global organization, you must stay aware of the laws and regulations and the mandatory international hiring rules. An outsourcing partner helps businesses implement the correct pay conditions for every employee. Your payroll outsourcing company will follow statutory compliance, set an accurate leave management system and abide by the laws in every country.
The payroll outsourcing company helps you stay on top of compliance and grow seamlessly without worrying about local, regional or national laws and regulations.
5. Accurate Tax and Other Deductions
The deductions in employee payroll can be complicated, especially with the multiple tax deductions. A payroll outsourcing company is equipped to handle all deductions consistently and accurately. Plus, the HR services will ensure that the taxes are paid on time. If any errors are found after filing payroll-related taxes, there are high chances of penalties being imposed. However, with trained teams and leading technologies, payroll outsourcing companies can ensure accurate tax deductions and reliable calculations, eliminating mistakes. They ensure your employees’ taxes are deducted and paid correctly.
What are the Disadvantages of Payroll Outsourcing Services in India?
1. Trust Issues
When you work with a payroll outsourcing company in India, they get access to your employees’ information. As an employer, you must choose a safe and secure company to protect the confidentiality of your data. Many companies are worried about the privacy and security of their data, especially if it is stored on the cloud without the proper encryption techniques and safety measures. Therefore, it’s essential to include the security measures in the agreement so that your employee data is never compromised.
2. Time Spend on Guiding & Training
If the team doesn’t have the knowledge and expertise to handle the HR services, your resources might spend time and money on training and knowledge transfers. Coordination may also be time-consuming if the company doesn’t have a streamlined payroll process. Therefore, working with a highly experienced and expert payroll outsourcing service in India is always recommended.
3. Lack of Customization
Some payroll solution providers offer multiple services and entice businesses to choose an all-inclusive package. However, it increases the overall cost of payroll outsourcing, and some services may not benefit the organizations. In addition, companies may pay for unnecessary HR services if they don’t choose their most convenient payroll outsourcing services. Outline what you’re looking for in a payroll company before selecting a service provider because you might miss out on getting customized and suitable solutions for your business.
By choosing the right payroll partner, companies can offset the risks and disadvantages related to outsourcing and focus on the benefits. It is becoming common for companies of all sizes to work with an outsourced payroll provider. The benefits outweigh the risks.
With TopSource Worldwide, you can minimize the disadvantages of the payroll system and enjoy the countless advantages of outsourcing your HR services to a trusted partner. In addition, we ensure complete control and safety over sensitive data and offer cost-effective, customized payment modules to reduce your unnecessary expenses.
Talk to our experts today and look forward to the benefits of payroll outsourcing in India.