The core concept of business is trading goods or services with profit as the intention. Without this motive, an activity cannot be classified as a business, no matter how beneficial. The whole idea of a business revolves around the multiplication of assets. Thereafter, those assets are liquidated, or stakes are proportionately distributed among the contributing entities such as employees, vendors, service providers, and brokers. If this ecosystem is not profitable, the business will eventually cease to be sustainable when funds become extinct. Therefore, business leaders and decision-makers must be convinced that a particular trade, service, hire, or transaction benefits the company by upholding, stabilizing, or multiplying its value. Similarly, while companies became besotted with payroll processing service providers because of the pandemic, it's time to infer if there is any real benefit in engaging payroll software and global payroll processing companies today.
How relevant is global payroll processing in the current market, considering COVID has been receding at an acceleratedsss pace? Well, to answer this, we must first realize that the value of profits is not always monetary. As Einstein puts it, "Not everything that counts can be counted; and not everything that can be counted, counts." This implies that the profits of payroll processing services can benefit an organization through other mediums. But unless those eventually transcend into revenue generation, it's a futile element. So, let's look at the direct and indirect ways payroll management services from reliable and efficient providers can benefit an organization:
The Top 3 Advantages of Outsourcing Payroll Processing Services:
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Payroll Outsourcing Reduces Cost-to-Company:
Let’s commence with the obvious. Irrespective of the nature of your business, whether you run a small enterprise, a private business, a family-owned generational company, a public-listed MNC, a conglomerate, or an establishment spanning across continents, outsourcing payroll always works cheaper than running the entire operation in-house. By eliminating the need to source, hire, and maintain an efficient HR department with competent staff, you'll no longer need to factor in these additional cost overheads. Besides, maintaining an in-house HR team is unlike a single-premium-policy payment. Once you set up an HR department, you'll have to accommodate the employment benefits and liabilities applicable to full-time employees. And, even if you have a relatively small team, you're not exempted from these costs. In fact, smaller HR teams incur higher maintenance cost-per-employee. The principle applied here is simple – larger volumes allow businesses a buffer to play with meager margins. Therefore, third-party payroll outsourcing companies can provide exemplary services at rather nominal costs because they profit from higher sales volumes. So, they target a larger market share which enables them to remain profitable, and so they extend that courtesy to their B2B clients responsible for bringing in the dough – you!
Payroll Outsourcing Saves Time:
Do you know which is the most valuable resource in the universe? Sure, money and assets are tangible and easily calculable. But there is something far more precious, and that resource is time. Because time spent judiciously can earn you significant amounts of money, and time spent chasing a futile endeavor is as good as money lost that could have been earned otherwise. So, instead of executing mundane administrative tasks, you'd rather have your skilled employees brainstorming over sales or marketing strategies, designing better products and associated services, or even streamlining and reinforcing operations, elevating the customer experience, and improving employee satisfaction. Why would anyone wish to waste person-hours over repetitive tasks that annihilate motivation, which only drives the productivity out of your team? Outsourcing payroll management to an external source allows your employees and you to concentrate on your critical roles without deviating from your course or losing focus on trivial jobs.
Payroll Outsourcing Reinforces Legal Indemnity:
Another way to safeguard assets and profitability is to plug all leaks. Tax regulations and labor laws can differ drastically from area to area. And they undergo changes periodically. Failure to comply with even one of these updates can have unforgiving repercussions. Innocent negligence or unfamiliarity can usher you into legal battles and penalties threatening to leave company coffers bone dry. Let's consider a practical situation: technical and legal diversities may be contradictory to those practiced in previous locations if you migrate operations. Your headquarters could remain stable, but what if an employee relocates to another branch? Do you follow the payroll laws of the headquarters or the actual location of work? And what if they're remotely working from another continent altogether? Which laws become applicable then? Not yielding to appropriate regulations can result in fines and loss of reputation, a substantial leak in your bucket. Besides, you must have all your information regarding payroll processing service functions available and accessible for audits or any unforeseen circumstances. Apart from maintaining crisp records for auditing purposes, advanced payroll software and enterprise solutions help track essential information that can be studied and analyzed for better planning. It allows the management to conduct regular reviews, clarify their positions, reinforce responsibilities, and plug all areas of concern. Therefore, to mitigate legal risks, it’s best to outsource payroll functions to experts who will safeguard your company by ensuring hard-earned profits stay within your bucket and don’t drain away.
Also Read: The Ultimate Guide to Efficient Payroll Management
Leaving the Numbers Aside…
While profitability is the crux of any business, one cannot neglect the ramifications of payroll on employees. If we were to ignore the math and think of payroll management from a very humane perspective, we'd concur that something affecting a person's livelihood must be dealt with, with utmost care. If money is crucial for corporations with billions in spending capacity, imagine how much your employees' lives must be impacted by their wages! Remuneration is the foremost reason they even come to work. A delay or miscalculation can have traumatic effects on staff and, by extension, their families and all those relying on their paychecks. Efficiency in handling payroll processes is therefore paramount.
Outsourcing companies offer high-quality, experienced professional expertise because that’s just what they do. They do what they do best, so you can concentrate on the rest. Why would you want to knead dough when baking isn’t your forte? Besides, nowadays, if you pick a good service provider, payroll functions can be highly automated, leaving no room for human error. When a process is system-regulated and automatic, there is lesser scope for mistakes arising out of maleficent intent or negligence. The staff gets paid as per the limitations, slabs, and data that is calibrated & fed into the system. There is no scope for unfair, preferential, or punitive treatment. Appropriate software streamlines processes, making it all very transparent. You're also likely to get comprehensive reports without any extra effort, allowing you to make strategic decisions regarding company accounts.
Exela HR Solutions is a world leader in delivering end-to-end HR services, from recruitment and global payroll processing to HRBP services. We’re here for all your payroll needs. Whether you’re a startup, an MNC, or a conglomerate, we have HR software and solutions for businesses of all types and sizes. Exela Technologies also deals in digital transformation and process automation; thus, you can be sure to have advanced automation and technology along with competent HR expertise. Minimize risks, avoid crises, and improve processing TATs, all with a reduced cost price and higher efficiency with Exela! So, get in touch with us today if you need help with payroll or any other HR function. What are you still thinking about? Try Exela HR Solutions today!
DISCLAIMER: The information on this site is for general information purposes only and is not intended to serve as legal advice. Laws governing the subject matter may change quickly, and Exela cannot guarantee that all the information on this site is current or correct. Should you have specific legal questions about any of the information on this site, you should consult with a licensed attorney in your area.