Payroll is one of the most intricate areas in the world of business.
From medium size business to the very large corporations, outsourcing payroll is now becoming common practice in Singapore.
Outsourcing payroll usually makes sense strategically due to the complexity and dynamic constitution of payroll requirements.
Since payroll is often imbued with human error which always leads to some sort of financial loss, outsourcing seems to be a responsible strategic solution especially if the company is experiencing any sort of growth.
One point to evaluate – Is it best to internalise your payroll services or look to other companies to take on this complex work for you?
The following are some of the differences between internal payroll and outsourcing.
1. Time invested on internal Payroll and Outsourced.
Singapore small to medium sized companies usually manage their Payroll functions as they have a lot less complexity as some of the larger organisations which can have hundreds or thousands of employees.
An independent study found that 60% of small companies do payroll tasks internally.
Around a quarter of companies which have internal payroll departments usually spend more than 6 hours each month on payroll related functions, this equates to around 72 hours annually.
This time could be better spent on more big-picture initiatives within the business to allow for more strategic goals like increasing market share, growth and research into innovation and automation.
2. The cost of internal vs. outsourced Payroll services.
Internal payroll staff usually work an average of 72 hours per year in Singapore.
Internal Payroll staff are usually hired as full-time employees and are severely underutilised because of this fact.
Companies which outsource their payroll tasks have a much higher return on investment as they can do to so with flexibility.
They only have to pay for the actual amount of time that is required for their payroll needs.
3. Compliance and accuracy of outsourced vs internal payroll staff.
With internal payroll, there are usually mistakes caused by compliance errors. This is largely due to changing regulatory requirements in Singapore.
As these types of mistakes lead to financial issues, they are rather serious and shouldn’t be taken lightly.
In a recent survey, it reveals that up to a third of employers have been impacted by payroll errors.
Outsourcing payroll functions to payroll specialists mean that these errors are a lot less likely to occur as they are always more experienced and have a higher level of expertise with payroll matters.
A bonus is that if issues with accuracy do occur, the business can pursue restitution, financial or legal depending on the contractual arrangement between the vendor and the business.
4. Peace of mind resulting from outsourcing Payroll.
Business owners in Singapore have more time to devote resources to growth, marketing, and other strategic goals when they outsource their payroll functions.
This will position their business in a way which will allow for more positive results.With time invested in strategic initiatives, they can focus more on competing in the market, growth, marketing and innovation which will result in higher returns on their investments.
These are four key benefits of outsourcing payroll as opposed to staffing internal payroll specialists in Singapore.