How Outsourcing Human Resources Can Make Your Payroll Simpler

Outsourcing human resources

Outsourced human resources is a great way to achieve small business growth. It can save your business money, increase efficiency, and give you access to HR experts. While many HR functions can be outsourced, payroll is one of the most in-demand functions.

Historically, internal HR staff or a financial department often handled the payroll process, with weekly or bi-weekly paycheck distribution. However, a recent survey by Deloitte shows that nearly a quarter of businesses in North America outsource their entire payroll process. At the same time, 43% use a third-party server to host payroll but complete the process internally.

There are many ways in which outsourced human resources, particularly payroll, can make your business operate more smoothly and with less hassle.

  1. You leave it to the experts. There can be no doubt that completing payroll is a time-consuming task for many companies. Getting it done right can require meticulous calculations that must be very accurate. One small mistake can result in hours of lost work trying to pinpoint exactly where the mistake was made. When you work with outsourced human resource staff, you get access to professionals who are well-versed in completing payroll accurately. The result is fewer errors, cost savings, increased compliance, and less stress. It is a simple process that gives you peace of mind that payroll will be accurate at any time.
  2. You can be sure compliance will be a priority. One of the biggest challenges for many small and mid-sized businesses is ensuring compliance with the laws, regulations, and mandatory rules that impact payroll. And this task is becoming more complex in an increasingly-mobile and remote working environment. Unfortunately, ensuring compliance also means the business must have an in-depth understanding of all applicable payroll-related laws and regulations, which span the topics of labor, tax, immigration, anti-discrimination, and insurance laws. When you outsource payroll, you can be sure that the experts working on your payroll deeply understand what it takes to be compliant, even with laws that frequently change. It also often results in fewer payroll errors, which can result in your business overpaying or underpaying taxes. Outsourcing payroll means your staff won’t have to invest a tremendous amount of time ensuring compliance. Your outsourced HR partner will do it.
  3. Better security with confidential information. Running a business means assuming many risks. One of the biggest risks is a data breach. Payroll information includes many sensitive data points, such as social security numbers, addresses, account numbers for direct deposit, and other identifying information. Keeping this data secure can be done in-house, but many small businesses may lack sufficient data security infrastructure and features to protect this data. When working with an outsourced payroll provider, they have secure platforms, servers, and encryption features to ensure your team’s data remains safe and secure. Additionally, many payroll providers use electronic payment functions. This feature means that in the unlikely event that an error does occur, their system can trace the source and fix it quickly.
  4. It frees up your time. Even if you hire in-house payroll staff, the business owner or manager must still be responsible for compliance and accuracy. This responsibility means you will have to invest a ton of time reading up on laws and regulations to ensure your staff is completing everything they should be completing and all reports are accurate. One misstep can result in stiff fines or penalties. But you don’t need to do the same when outsourcing payroll. The payroll provider will have supervisors verify accuracy and flag compliance issues. This benefit means that your time will be free to pursue other business goals, such as growing and expanding your customer base and building a solid brand reputation.
  5. Easy, reduced payment. While many businesses are under the impression that outsourced human resources are too costly, the reality is that working with a strong HR partner can reduce your expenses in the long run. Outsourced payroll can be costly, especially for companies with many employees, but these costs are often far less than hiring in-house payroll staff. And outsourcing allows you the flexibility to expand. Rather than hiring more payroll staff, you can simply work with your outsourced HR partner to increase their workload. This arrangement allows you to scale your contract to meet your business’s needs.

In the modern business world, leaders know that every decision counts, especially if it can save time, money, or both. To learn more about outsourced human resources, including payroll, contact CA HR Services today!

CA HR Services specializes in working with small and medium-sized companies to help develop legal, efficient, and appropriate H.R. processes and procedures that meet state and federal labor law requirements.