What Is Payroll Outsourcing?
We often hear the term ‘payroll outsourcing‘ nowadays, but do you know what it exactly means? By definition, payroll outsourcing simply means engaging third-party outsourced payroll providers to handle a firm’s payroll activities.
According to recent payroll outsourcing statistics, payroll outsourcing is expected to reach US$10,336 million by 2023 in the global market with a constant CAGR (Compound Annual Growth Rate) of 4.4%. It has even been foreseen that payroll would soon be entirely outsourced globally. So, the first question is, what exactly are these outsourced payroll providers offering to impact the entire business ecosystem?
As a matter of fact, they specialize in providing HR and payroll outsourcing assistance to their clients. For instance:
- Setting up an automated payroll system for the client company
- Recording employee’s data
- Overseeing their work hours
- Calculating wages and salaries
- Withholding required income taxes (in certain countries)
- Making payments via checks and direct deposits
Payroll outsourcing services also help administer employee benefits to assure employee morale, maintain the company’s payroll records, and provide accurate and organized reports.
One thing to keep in mind is that these companies also establish HR compliance to clients. They can demonstrate a clear understanding of legal policies and regulations, and are able to ensure proper and statutory work environment.
From the above, one can see why these payroll outsourcing companies are leading a global business trend. When companies outsource payroll service, their business pressure can certainly be eased.
3 Reasons To Outsource Your Payroll
At this moment, if you think, “why do I need a third party to help me pay for my employees?” There are several reasons for it. But the key takeaway here is that handling an in-house payroll process is more laborious and time consuming than one can expect. By payroll outsourcing, companies can:
1. Relieve HR Burden
First and foremost, it has been proven that payroll outsourcing organizations help reduce a company’s costs. According to recent market research, payroll outsourcing has helped companies result in a cost savings of 20% or more while decreasing in-house business costs. The reason is that maintaining a robust HR department and training sensitive staff can be very costly.
On top of that, the cost of maintaining a payroll software system can also be costly. By hiring outsourced payroll providers, such cost can be wiped out. When a company hires payroll services, it can relieve payroll stress and focus more on its core business and HR management.
2. Avoid Penalties/Violations
The other benefit of hiring a outsourced payroll providers is to ensure HR compliance and avoid penalties. When it comes to payroll, a different country has a specific set of rules to follow. For example, some countries like the US require employers to withhold a certain amount of income from employees as an income tax payment. Places like Hong Kong require employees to fill out tax forms but also ask employers to follow the MPF (Mandatory Provident Fund) guidelines.
As the business is going global, corporations often expand their branches to other foreign countries with little knowledge about the legal policies. Companies violating government regulations may end up receiving penalties and fines, which can be avoided with the help of a payroll outsourcing company.
3. Time-saving
After all, the main reason to outsource a company’s payroll process is to save time for other matters in the business. As mentioned, payroll is a time consuming and redundant work that involves great attention to details.
Tasks like recording each employee’s data and work hours, handling new hires and terminations, and supervising benefit deductions for employees require time and effort. Let alone the time spent on training a team of responsible and sensitive staff. This is when payroll services helps — they take the stress away from you so you can focus on other important aspects of the company.
We Are At Your Service
Yes, payroll can be laborious and tedious. But that’s why WE are here to relieve your stress! Ever since established in 2015 by Shelly Tsao, RedMountain Asia has targeted to provide to our clients nothing but professional services across the Asia Pacific Region. As a client oriented and results-driven organization, we are here to deliver:
1. Precision
Doubtlessly, payroll represents an elemental part of a company’s administrative operation. It encompasses data of the entire workforce within a firm, wages and salaries of employees, and even their various allowances and benefits.
A well-managed payroll embodies accuracy, and that’s what our payroll team in RedMountain Asia values. Our team exclusively hosts a reliable and successful human resources management system called I-Red. With I-Red’s sophisticated features, clients can receive error-free payroll processing and a transparent platform for data access.
2. Credibility
As representing a professional organization, our payroll team also aims to provide security and credibility. With over 20 years of experience in HR and payroll outsourcing, our team serves with professional knowledge and a set of integral code of conduct. We surely respect our client’s private information. We aim to assist our clients and let them be able to count on us on each step of the service.
3. Philosophy
Our philosophy is to help our clients balance their focus on conducting their core businesses by increasing business efficiencies and reducing back-office costs. To provide backend support to our clients, we also incorporate payroll related compliance, employee self-service portal, tax filing, etc. We are here to provide solutions with a human touch – which means, we do, and we care.
