According to a recent survey by Global Industry Analysts – a leading business strategy and market intelligence firm – the global HR outsourcing market is expected to surpass $160 billion by 2015 escalating from $103 billion in 2007.
Of all the HR functions, payroll is one of the most popular choices in HR outsourcing technology. Small businesses are particularly contributing to the shifting trend.
With a host of advantages, payroll outsourcing helps businesses streamline their functions and processes. However, choosing the right third party service provider is a challenging task, especially when businesses have valuable information at stake.
This article is part of an effort to help business owners know how they can choose the right vendor for this critical function to increase productivity and growth of their businesses.
Accuracy and Accountability
Accuracy is the foremost factor that businesses should consider when outsourcing their payroll. Persistent inaccuracies can be frustrating for employees resulting in dissatisfaction. Usually, the rate of error or inaccuracy is significantly low in outsourced payroll firms. However, they must assume responsibility if paychecks or paperwork is delayed or mishandled by them.
The payroll system is influenced by the local laws and regulations. For example, Federal Unemployment Tax Act (FUTA) and Federal Insurance Contribution Act (FICA) mandate employers for record keeping and reporting while state labor laws impose additional compliance requirements.
Outsourced firms should be well versed with the federal, state, and local legislative requirements. They must also have efficient compliance functionalities to help businesses adhere to payroll related regulations.
The Accountancy Age survey states that the most significant benefit of outsourcing payroll operations is cost effectiveness of up to 42 percent. While many firms charge extra for giving additional services or adding or dropping employees, costs can differ dramatically across firms. Businesses can start by asking for the full details of charges before outsourcing their payroll operations.
Many businesses are hesitant when it comes to sharing their sensitive information with a third party. However, an outsourced firm with a strong data security system in place can provide comfort in the protection of valuable information related to the business and its employees.
When it comes to choosing the right vendor for payroll services, business owners should consider the capabilities of their in-house team and compare the elements with what the outsourced firm can offer.
About SimpleX Payroll
SimpleX Payroll is a full-service payroll company that specializes in delivering unparalleled service standards to small-medium sized businesses in all 50 States. SimpleX Payroll is built on providing a cloud-based all-in-one premier Payroll processing suite that includes Employee Time Management, Unlimited Custom Reporting, Calculating Taxes, Accounting & System Integration features.