As a recruiter, you are used to delegating. To focus on your core functions, roles and responsibilities are passed to qualified people in your business. On a larger scale, this is how outsourcing works. You hire a company to take care of administrative tasks so you can focus on income-generating activities. Because payroll is so complex and time-consuming, it is one task that is often outsourced. Here are five reasons why.
Payroll is both time-consuming and complicated. Devoting a significant amount of attention to it each month adversely affects your core activities. Being late with payroll causes unhappy employees. Compliance errors can result in expensive fines and penalties. By outsourcing payroll, you gain peace of mind knowing experts are handling all the details. You have more time to devote to core responsibilities.
Having a business to run means you aren’t able to stay on top of changing tax laws and regulations. Taking on the vast amount of administrative and regulatory baggage involved with payroll administration is a full-time job in itself. Your burden increases, even more, when you have employees in multiple states. Choosing to outsource your payroll means having seasoned experts handle all aspects of administration, so you remain compliant and avoid reputational damage.
Because your job is to increase revenue, you lack the time needed to maintain employee records and report information. You also don’t have time to research options for direct deposit or self-service access to payroll information online. By outsourcing your payroll, you gain access to the latest technology for efficient administration. Experts efficiently handle all of your payroll needs.
Being responsible for core business functions hinders your ability to focus on and comply with payroll laws. You lack the time for understanding the highly technical wage and hour laws, calculating employer and employee portions of taxes, and withholding taxes from an employee’s paycheck. Also, you probably don’t understand all the regulations surrounding reporting and remitting taxes at the federal, state, and local levels. Plus, the complexity of new-hire reporting requirements and state requirements for unemployment compensation and workers compensation insurance demand time to understand and stay current on. Outsourcing payroll takes away these headaches, ensuring compliance with all laws and regulations.
You want to save money whenever possible and pay a reasonable amount for quality work. You do not want to pay for unnecessary office space, equipment, supplies, staff, or training. Outsourcing your payroll means tailoring services to meet your business needs and financial resources. Because you can scale up or down payroll services, you receive the same high level of performance as your business grows or faces challenges.