By Julius Milnes Aug23,2021
payroll outsourcing


Payroll outsourcing services have become very popular in recent times with many buisinesses; big , medium and small subscribing to this model. For many persons, outsourcing non-core buisinesses functions like payroll is a sure way to increase operational efficiency. However, others look at the other side of the coin and the accompanying risks that may arise from integrating third parties into the buisiness. Our aim is to x-ray the pros, cons and other eventualities that may result from Payroll outsourcing services and how to take these into considerations when scouting for outsourcing firms.


The pros of outsourcing payroll services cannot be overemphasized in the present world. With high volumes of paychecks to issue, employee turnover, and all the paperwork involved in handling payroll, most businesses are better off outsourcing this function to the experts. This will give the buisiness greater time to focus on core functions that will yield it’s growth.

Daily, new tax laws spring up and will need core financial firms that are well grounded to be conversant with these roles and implement them, to keep tax fines farther from your doors. This sounds easier than re-training your employees on tax issues frequently.Also, the task of cleaning up the financial books may look overwhelming when the tax agency comes knocking, you will need a dedicated team of payroll experts to take care this headache.


Payroll outsourcing services may look enticing until you get to see the other side of the fence that is unpalatable. If an incompetent outsourcing partner with low accuracy levels is hired, who may plunge you into salary delays and disputes with your employees which may impede workers productivity and create a toxic work environment. Also, there is a delayed access to data as the outsourcing firm is not an in-house arrangement. This can take some days before reply is given and is because of the many clients they may have on their plate at the same time. Communication gaps and delays of this nature, can be bad for business especially when the data is needed urgently.

Handing over your payroll operations to a third party gives you less control over the financial information and confidential data associated with it. This presents a loophole where information can get into the wrong hands and can make the employees vulnerable to blackmail, theft and lawsuits. Situations like this, favours the clamour for use of artificial intelligence (AI), AI like websites, tools available in market for doing payroll process.


The cost of outsourcing payrolls are variable depending on the nature of the firm, the arrangement with the outsourcing agency and the number of employees. For small buisinesses, it may be costlier to outsource payrolls than to hire an in-house bookkeeper. Many payroll companies offer other services

and entice businesses to subscribe to them by offering all-inclusive packages. This increases the cost of outsourcing payroll, and it’s possible the additional services offered are not of true benefit to the business. Outlining what a business is looking for in a payroll company before seeking a service provider makes the business better armed against such a sales pitch.


Payroll outsourcing looks simple but is intrinsically complex, hence the reason why one agency’s decision on outsourcing may not be beneficial for another firm. This underlines that before outsourcing, there should be a thorough.considerations on the pros and cons of payroll outsourcing.

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