A major part of human resource functions, payroll outsourcing, is gaining momentum as enterprises are resorting to aggressive restructuring measures to meet consumer expectations and retain profit margins. Payroll outsourcing that involves the use of a third party payroll provider to handle all payroll functions, enables enterprises to significantly improve on their productivity by saving time, efforts and costs consumed by in-house payroll operations and staying compliant.
In a recent report Paysquare sees this as a huge opportunity for businesses as well as service providers, especially in a highly competitive VUCA (Volatility, Complexity, Uncertainty and Ambiguity) world.
‘’The emergence of disruptive technologies has opened the doors for unconventional revenue models, which are being tapped by every major enterprise in India. While technology is the key revenue differentiator for these organisations in a VUCA World, they have also realized the business benefits of outsourcing legacy in-house operations like payroll,’’ said Rakesh Jain, Founder and CEO, Paysquare Consultancy Ltd.
Enterprises across the globe are now leveraging next-generation technologies to tap in on unique business opportunities. This is disrupting the business landscape across the globe including India. A large number of enterprises are being led by young business leaders who are adopting a peculiar approach when it comes to allocation of funds, zeroing in on revenue generation processes and outsourcing non-core processes including payroll.
While it’s the most crucial aspect for employees, payroll is just another major expense to a business which involves housing a finance department and HR personnel . Since the majority of enterprises are now shunning low-profit operations, young business leaders are rapidly recognizing the immense benefits of payroll outsourcing, the report said, adding that payroll outsourcing also offers highly scalable services to enterprises as per their budgets and customized requirements. The different modules offered by the payroll outsourcing vendors address the complexities of each company.
Right from crediting salaries to performing a cost analysis, preparing reports, maintaining master payroll and adhering to complex regulations, outsourcing payroll has come as an end to end service for enterprises, particularly those in the process of restructuring operations.
‘’Roping in a credible payroll outsourcing vendor leads to seamless payroll operations for organizations specifically intending to focus on core profit operations,’’ adds Jain.
Market research analysts at Technavio also predicted in its report that the global payroll outsourcing services market will grow steadily and post a CAGR of close to 6% by 2021. It identifies the escalating demand to reduce payroll-related costs as one of the primary growth factors for this market.
One of the latest trends that will gain traction in the global payroll outsourcing market in the coming years is the implementation of automation. Automated payroll operations allow service providers to improve their sustainability in the market since it helps in reducing the wastage of time and also keeps a track of costs. Additionally, vendors are also focusing on building reusable service delivery platforms with scalability and automation by implementing new software tools for automatic payment calculations, deduction calculations, and record keeping, it said.