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Can Payroll Outsourcing Help Your Business in 2021?

Can Payroll Outsourcing Help Your Business in 2021?

As 2020 forced companies to adjust to pandemic operating measures, many are looking for ways to optimize their productivity and efficiency. Many will consider the outsourcing concept for a long list of functions, including payroll. Outsourcing uses the expertise of external vendors to perform certain business functions. This can range from accounting to payroll and IT to customer care.

The outsourcing services available are really only limited by your organization’s needs. Payroll outsourcing provides many benefits as it focuses on a mundane yet time-consuming task. As a result, your HR team can ramp up to manage the changing demands of a highly volatile employment market. Since your company has likely already adopted remote operations for many functions, payroll outsourcing becomes easier.


Here we review the things to consider when outsourcing payroll and how it can help your business.

Reducing Operational Costs

Because so many businesses have already rethought their workforce locations, outsourcing is the next step in helping reduce operational costs. Not only do you have the opportunity to refocus the role of your HR team, but also cut costs related to the technology, man-hours and space required to accommodate a payroll team. Payroll outsourcing takes on the costly tasks of tracking, reconciling, and adjusting payroll issues, as well as the tedious job of managing associated tasks such as tax administration.

Focus On Core Business Functions

Changes and disruptions to HR roles due to the pandemic in hand with recruitment and retainment issues puts more demand on HR departments. Payroll, outsourcing allows HR teams and managers to concentrate on their core functions such as:

When work such as payroll and other HR administrative tasks are outsourced, HR teams become more strategic. They can become people specialists focused on finding and retaining top talent. As a result challenges such as skills gaps that can interfere with progress and company growth are avoided.

Technology Integration

By wisely choosing partnerships with advanced HR and payroll companies, your organization suddenly has access to the best technology. Complete integration of HR administrative tasks provides your organization with time and cost-saving platforms that manage a long list of HR functions including:

With your core HR functions fully integrated, it’s not just your department that is empowered. Your entire workforce is empowered to self-manage their scheduling, benefits, onboarding, training schedules, payroll disputes and more.

Workforce Planning

Workforce planning tends to fall by the wayside in organizations where HR gets caught up in minutia. Payroll outsourcing enhances capabilities for workforce planning as it not only frees up time but also helps you track your team. You can become proactive in:

  • Sourcing top talent
  • Arranging for internal transfers
  • Phasing out retirees and poor performers
  • Being more effective in talent management

You can create defined goals related to talent acquisition with a better understanding of costs, hiring and firing patterns, and success in your talent recruitment.

Simplified Certified Payroll

If your organization manages federally funded projects you understand the headache of certified payroll. Payroll outsourcing ensures you are following the complicated certified payroll process including your certified payroll reports. Outsourced payroll will ensure:

  • You use the correct occupational title or classification to define your business
  • Hourly rates of pay are reported accurately
  • Reporting that lapses in weekly payroll reports were a result of no work during that period
  • The proper form is used for your state

Certified payroll is highly time-consuming and also leaves your organization open for errors that can lead to fines and even loss of future bids. This is yet another one of the important things to consider when outsourcing payroll.  

Competitive Edge for Recruitment

Outsourcing provides smaller organizations with an edge over the competition. Because your HR team is freed up to focus on workforce planning, benefits, training, and other progressive functions, you become more attractive to top talent. People today want to work for companies willing to invest in their futures, with a commitment to training, skills advancement, and upward movement.

While payroll outsourcing might seem like a costly endeavor, it actually saves money in the long run. As we head into what should hopefully be a year focused on economic recovery and growth, the things to consider when outsourcing payroll provide a clear path to success.

About The Author

Ingrid Principe

Ingrid is the Content Marketing Manager at Paypro, managing both inbound and outbound marketing initiatives for the company. She has 15+ years’ of extensive marketing communications experience, leveraging brand awareness and strategic partnerships to increase sales revenue for a diverse group of B2B brands.

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