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Benefits of Outsourcing HR & Payroll Processes

by: Mary Christine Galang

Wednesday, August 09, 2017 |

Businesses choose to outsource for many reasons. Initially, it was a practical cost-cutting measure but has eventually become a means of competitive growth, by hiring people of varying specializations.

One of the main reasons of outsourcing specific business processes is to ensure quality, efficiency, accuracy, and better productivity in essential, but non-core operations in your company. Your human relations (HR) and payroll are two of them.

Long-term benefits of outsourcing HR & payroll

These functions, although do not technically and directly generate profit from customers, in many ways offer a substantial return on investment (ROI) for the company, especially in an aggressive market. Reallocating your HR and payroll processes have many long-term benefits for your company.

  • Cuts costs. HR and payroll are essential to ensuring your business operations run smoothly, and therefore takes a lot of resources to do so. Having an offshore provider for these functions significantly saves you variable costs, including hiring full-time employees with traditional employee benefits. Furthermore, valuable in-house HR administration duties such as training and recruitment are expensive and are a practical benefit. Outsourcing also means having the access to an otherwise large expenditure, state-of-the-art technology, including updated payroll software needed for compliance changes.
  • Better focus on your core competencies. Having a third-party provider carry out these time-consuming tasks for you allow you to focus and develop your core functions to increase market share.
  • Enhance security and reduce risks. Both these functions involve handling and processing complex and sensitive data. Having a trusted, reputable, and highly experienced outsourcing HR and payroll service provider ensures data protection and security that comply with laws and industry standards. They have the skill and equipment to avoid exposure to security threats and internal risks.
  • Compliance with regulations. HR and payroll require knowledge of laws that govern the handling of funds, taxes, benefits, and incentives. This can be very challenging to execute accurately and consumes a lot of non-billable hours. In addition, HR personnel is responsible for answering inquiries related to compensation, including tax deductions, wage increase, and other related payroll-related concerns.

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