Common challenges of outsourcing payroll services in India
Common challenges of outsourcing payroll services in India

Common challenges of outsourcing payroll services in India

Payroll outsourcing in India has gained much prominence in recent times. Intricate financial calculations, coupled with critical operations, and time and budget crunch, are making payroll outsourcing a more sought-after option for organizations.

It’s natural to be skeptical as a first-timer. To collaborate with a dependable partner, research carefully and consider relevant factors, What are these? Let's find out.

  1. Whether or not to outsource
    Strangely enough, when it comes to decision-making, most companies are at a fix whether or not to outsource their payroll management needs. Even though the advantages of this service heavily outweigh its challenges. Still, it’s difficult for companies to take the plunge.
  2. Getting the most suitable service provider
    Payroll outsourcing companies have mushroomed in the country. But, selecting a befitting organization is no less a hurdle. Most often, the decisive factor is whether their offerings match your demands. If it does, you have the liberty to check out other credentials as well - their service charges, reputation, years of experience, the technology they use, and so on. Also, there are online portals to fall back on, that review companies which offer payroll outsourcing services in India.
  3. Letting go of control
    If you consider outsourcing payroll management, be ready to let go of certain financial information and data, which you might have easily controlled in-house. To avoid possible discrepancy, pre-decide on the data you are comfortable sharing with third parties, rather than fretting over it in the future.
  4. Error management
    One of the biggest challenges of payroll outsourcing in India is the possibility of erroneous results provided by payroll managing firms in terms of calculation and compliance results. The consequence - delayed salary disbursals for your employees.
  5. Cost of outsourcing
    The greatest advantage of outsourcing a company’s payroll management system is to bring down costs. Most payroll outsourcing companies charge monthly fees. Billing amounts usually vary based on factors like company size, location, payroll frequency, etc. Going for all-inclusive packages is not advisable. You will be left with no choice but to pay for redundant services. Neither is it cost-effective to pay them on a “per-employee” basis. Most economical packages are the ones that payroll companies are ready to tailor, based on their workload.
  6. Lack of employee trust
    In-house payroll management portals go a long way in building employee trust. A single erroneous payslip from the service provider’s end can put a company’s reputation at stake. 
  7. Compromise in confidentiality
    Payroll management involves handling sensitive employee information like their identification numbers, contact details, etc. When a third party manages payrolls for an organization, data leak threats loom large. To ensure data protection, you can check for the policies they follow to secure confidentiality. It’s better to have necessary terms and conditions laid out from your end so that there isn’t any security breach.
  8. Lack of communication
    Poor communication and lagged processing times prove to be a considerable negator. Check whether the service providers are efficient enough to deliver payroll reports within a stipulated time frame and there isn’t too much back and forth.
  9. Vendor instability
    Though extremely rare, this is a significant roadblock faced while payroll outsourcing in India. It happens if the agency you choose is not well funded, and is at the risk of running out of business.


Things to remember before payroll outsourcing in India

  • Make sure you have absolute clarity on the areas of payroll management you wish to outsource. Choose an industry expert capable of providing end-to-end solutions, provided they can customize their offerings based on your needs.
  • Choose your outsourcing partner wisely. Affordability must never be the yardstick of expertise. Don’t compromise on standards just for the sake of your budget.
  • Don’t shy away from checking their delivery standards. Meet the team, check the technology they use, and even request demo payroll runs if possible.


If you are dilly-dallying to outsource your payroll services, we assure you, there can’t be a better partner than EasySource India Private Limited. We are a reputable name in the payroll outsourcing services industry, with more than 15 years of experience in the sector. Having served over 300 clients across 400 locations in the country, so far, we pride ourselves on being the most dependable solution provider for our clients. To know more, get in touch with us now!


Looking for HR Solution for Your Company?
Consistent HR support without hiring full-time HR
Hire Best HR Consulting Services

Looking for Manpower Management Solution?
Contact for manpower outsourcing Process, HR services and HR recruitment
Hire Manpower Outsourcing Services Company