HR and payroll functions

Almost every company’s HR teamis responsible for handling a variety of functions. In addition to processing employee payroll and filing taxes, they also have to manage employee benefit programs as well as health administration. HR also manages legal compliance and oversee training and development of new recruits as well as existing employees. Thus, various functions of the HR department become too complicated to maintain in-house. Companies who outsource their HR and payroll functions have gained several advantages that eventually support the company’s bottom line.

HR and payroll functions And yet payroll and HR are two aspects of a company that often don’t get the attention that they deserve. The average small business owner will spend between seven and 25 percent of their working hours handling employee paperwork. While outsourcing may seem challenging, it can certainly free up time of employees and engage them elsewhere.

Benefits of outsourcing HR and payroll services

Reduced costs

Hiring new employees only for managing HR or payroll can be a costly affair. Apart from their salary, companies also have to pay various other costs such as health care. Taking on a full-time employee to handle HR and payroll may not always be the best financially safe option. There are also other expenses that come with hiring new staff such as placing job advertisements or conducting interviews and buying office equipment if needed.

Outsourcing isn’t cheap (not in a negative way) but many companies have experienced a significant reduction in costs by outsourcing HR and payroll services.


Maintaining an efficient and productive workplace is what every company strives for. By outsourcing there can be a significant increase in efficiency within HR department. Outsourcing providers leverage advanced technology to streamline important HR functions, such as payroll, benefit administration and compliance management. It also ensures staff spends less time doing manual paperwork and dedicate more time to improve the efficiency and effectiveness of the workforce.

Higher productivity:

Companies who perform these activities in-house know how much time it can take them. There are numerous tasks like calculating payroll taxes, filing forms and trying to keep up with all tax compliances, which take a large part of the day with these activities.

Outsourcing helps to free up this time and allows employees to concentrate on more important aspects of the company. While payroll and HR may not appear to be important, actually processing all the paperwork can lead to a decrease in productivity. Due to the cutthroat competition these days, companies should ideally focus on growing their businesses by analyzing trends, reducing costs, as well as improving margins.

Employee Development:

Outsourcing also helps companies manage employee performance and development. They implement performance management plans that help employees understand and comply with company policies and procedures. These steps can eventually lead to them successfully meeting their business goals. Outsourcing experts regularly monitor employee performance and report all their findings to the management. That is one less worry for the managers.

HR and payroll functions

Reduce turnover:

HR departments also have the responsibility of taking steps to reduce turnover. This is because higher turnover can reduce productivity to a great extent which leads to major losses for the company. Instead of forcing this responsibility on the HR department, companies can leverage the expertise and experience of their service providers to manage such issues.

To summarize, while it may appear that the company is losing control over some of its functions, it is definitely not the case. By outsourcing HR and payroll functions, companies can focus on achieving their goals and growing at a much quicker pace.