Five Reasons to Consider Outsourcing Payroll and HR Management


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There are a number of reasons that business owners decide to outsource payroll processing and HR management for their company. When you outsource payroll processing and HR management, it frees your staff to work on more valuable work. When you outsource payroll processing and HR management, it saves you money. When you outsource payroll processing and HR management it streamlines the entire payroll processing system, so that your business is more efficient and previously time-consuming and manual tasks are automated.

If you are on the fence about using outsourced payroll services, we’ve put together a little information for you to consider.

Five Benefits of Outsourcing Payroll and HR Management

  1. Outsourcing payroll management frees up your full-time employees to work on more growth-oriented work.

    Processing payroll requires several hours of tedious, repetitive work every pay period. And then, when the pay period ends, it all starts over. Doing this in-house means that you are paying an employee a salary as well as vacation and health benefits to do work that does nothing for your company strategy. When you outsource your payroll tasks, this busy work is handled for a fraction of the cost of using your valuable in-house employees to work on it. This frees your employees to work on more strategic-oriented work.

  2. Outsourcing payroll management reduces reduces errors.

    The payroll laws and regulations that your state has in place are probably extremely precise. If you have in error, it could cost your company thousands of dollars in penalties. Any situation where a human is entering data leaves room for human error. It’s a fact. However, when most outsourced payroll processing providers automate the process. The employee would enter their information through an HR portal, the back-end system would do all the math, tax deductions, and accounting to process it. This removes the risk of human error and your liability to pay penalties if there were a mistake.
  3. Outsourcing HR management empowers employees to manage their own benefits.

    When an employee needs a basic piece of information about their employment status, their healthcare details, their retirement options, and so on, having one of your HR employees do the research and pull the information for them requires time and costs you money. Making changes to their health or retirement options takes more time and costs you more money. On the other hand, when HR management is outsourced, your employee can login to their HR portal and get the information they need at the click of a button. This provides convenience to the employee, and reduces the amount of busy work your full-time employees have to do.
  4. Outsourcing HR management gives you added security.

    Your HR information contains a huge amount of personal information about your employees. Their income, their social security information, their health information, and so on. When your HR is managed in house, it puts a physical person in charge of this information. Unfortunately, many security breaches are committed internally, by your own employees. When you entrust this sensitive information in the hands of a professional HR management company, they employ best practices for security, and so your employee’s personal information has an extra level of protection.

  5. Outsourcing HR management gives you expertise.

    Staying on top of all of the best practices with HR and payroll management is difficult for a small business. When you have an in-house team to manage it, you must constantly invest in ongoing training, so that their skills match the industry standard. If one of your employees leaves, their knowledge leaves with them. On the other hand, when you use an outsourced company to manage your HR and payroll processing, the diversified skills that are needed are kept current by the provider. If you HR management requires the skill set of five different professionals, you don’t have to actually pay the salary and benefits of five different professionals, in addition to the cost of keeping their skills updated.

Payroll and HR management is a necessary evil in the business world. You have to have employees to run your business, and you have to have payroll and HR to manage your employees. When you outsource your payroll and HR management, at least you don’t have to pay employees to management your employees.

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