5 reasons why you should switch to an outsourced payroll provider
The objective for payroll professionals used to be simple: all they had to worry about was paying employees accurately and on time. As organisations increasingly look beyond local domestic boundaries, the complexity of payroll operations has expanded and evolved so that the level of payroll sophistication has increased As a result, the needs and requirements of organisations globally have become more complex.
Organisations are now struggling with the increasing complexity and global nature of payroll. With 51% of payroll functions already outsourced across organisations, companies are now looking to payroll to integrate and support cloud and HR platform based processes [Nelson Hall report].
Companies now want to combine HCM, payroll, employee analytics and forecasting for attracting, developing, engaging, retaining and managing their workforces. With one payroll provider, these needs are combined for a more practical approach, with key benefits including cost saving and visibility.
So, why should you switch to an outsourced payroll provider? Here are five reasons:
1. Improve payroll compliance
Consistency and compliancy can be a challenge. Payroll errors cost the average FTSE 100 company between £10M and £30M per annum [PWC report]. Evidently, failure to select the right payroll provider can work out extremely expensive for a company, not just in terms of money but also business reputation.
Some payroll problems are commonplace: therefore it is a good idea for a company to have prior knowledge of these issues, so they can be avoided at all costs. Managing risk and compliance is an unprecedented change for multinational companies that continuously face problems in managing payroll. Investing in managed and comprehensive outsource payroll services in order to drastically improved efficiency, for employees and managers alike, is desirable.
2. Offer multinational delivery capability and global mobility rel="noopener noreferrer"
As mentioned in Monika Garg’s blog in Personnel Today, companies around the world need to employ the right people in the right locations, for the right salary, to make business sense. Compliance is a key driver in payroll, particularly for clients that have small employee populations outside of their key established locations.
Managing payroll for mobile employees and dealing with cross-border issues needs to be managed in a coordinated manner, so the issues in the home and host country can be addressed simultaneously. In addition, payroll managers need to offer employees a self-service form of payroll, so that reporting can be accessed remotely.
3. Provide additional HR services
The role of payroll is especially important in streamlining key HR processes for a globally dispersed workforce. HR administrative functions, service delivery, talent management applications, workforce management and HCM applications must be in conjunction with payroll and broader integrated offerings to provide companies with precious information about their workforces.
By 2020, it is predicted that 25% of global midmarket and large enterprises will have invested in a cloud-deployed HCM suite for administrative HR and talent management [Gartner report]. This statistic demonstrates that payroll professionals need to move to a provider that can offer more than simple payroll services.
4. Reduce business costs
One of the smart ways to address the need for an outsourced payroll provider is to demonstrate the cost of not switching. It may be costly to integrate an outsourced provider at first, but in the long term money will be saved, not to mention the fact that increased compliance puts businesses at an advantage.
Organisations that struggle to obtain visibility of the end-to-end payroll processes and effectiveness of controls can find it challenging to maintain clarity in terms of roles and accountabilities.
5. Embracing ‘glocalisation’
It is important to think globally and act locally when it comes to payroll, which can be achieved by choosing a global provider with local knowledge. Most companies are facing the inherent problem with HR and payroll systems of not being compatible, as each country has its own system and rules that simply aren’t compatible with the regulations of others. This could potentially be costly and challenging to manage and maintain. If businesses don’t integrate they are faced with dealing with different currencies, tax and social security requirements, as well as different jurisdictions and regulations.
If organisations want to avoid the challenges of managing and processing payroll, or find it hard to keep up to date with regulations in various markets, an outsourced payroll provider with an experienced team is the answer. Outsourcing payroll providers are dedicated to handling the full payroll journey while embracing innovative techniques and technology. In addition, outsourcing a provider offers in depth and valuable information, so businesses can focus on their strategy and, their most important asset – their people.
In short, choosing an outsourcing provider ensures that companies are avoiding duplication in terms of effort, overall making for a more consistent employee experience involving just one provider, one contract, one point of contact, and the roll-out of a single payroll system with visibility across all geographies.
To find out more about SD Worx’s HR and payroll services, please contact WeAreGlobal@sdworx.com.