Choosing the right payroll outsourcing firm

Choosing the right payroll outsourcing firm

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Over the years, the number of businesses that are adopting the practice of outsourcing their payroll functions has been steadily rising.

This is hardly a surprise considering the many benefits that payroll outsourcing has over the tradition method of handling all the payroll processes in-house. But as this awareness has increased, there are more and more businesses who are taking nascent steps into this realm and need to be guided as to who or which outsourcing vendor can they rely on.

If you are a business owner or manager looking to outsource payroll, you need to have a clear idea on who you are going to assign this responsibility to.

Let’s look at some of the must-knows for you before finalizing a payroll outsourcing firm:

Is Payroll service your vendor’s core service offering?

Always pick a firm which delivers its payroll services as a primary business function rather than it being just another complimentary offering they pitch to their clients. The companies that focus on a particular service, which forms the core of their business offerings, are always making sure they have nothing but the experts to deliver quality and dedication. They are always in sync with the industry’s best practices as well as the legislations in their clients’ countries.

What are the cost benefits against the quality and range of service?

It goes without saying that while investing in any service, you are always looking to save the associated costs while keeping a vigil eye on the quality of service. In a payroll outsourcing arrangement with a third-party company, the deal for the service may be on a month-to-month basis or on the period of time as agreed by the two parties.

Depending on your business requirements – whether you have a large number of employees to manage payroll for or that you can afford to keep the operations scaled down – you must choose one of the many options at your disposal. Check with them whether as part of their offerings they deliver on features of the nature as integrated accounting, multiple wage rates, accurate bookkeeping and tax management, employee allowance management system, insurance unemployment, paid sabbatical management, TA/DA management system, etc. The features just mentioned may or may not be part of you requirements, the point is that do not leave any area unexplored and get clarity on every single aspect that there is.

What’s their reputation the market?

Look at payroll outsourcing as just another business collaboration in which research or due diligence is of utmost importance. But more than the legal aspects, your research must focus on the track record of the payroll outsourcing firm you have shortlisted, in the terms of their service quality and success history. Get in touch with their existing or older clients to get a fair idea on pros as well as the pain points of dealing with them.


Outsourcing payroll is among the most critical business decisions as it has a direct bearing on your employees’ welfare and their satisfaction with their employment with you. Take time to evaluate multiple vendors and get answers to all the questions that will help you make an informed decision.

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