A recent study from Robert Half and the Financial Executives Research Foundation indicates that 39% of all U.S. companies outsource their payroll processing. That amounts to more than 10 million companies. Furthermore, some 43% outsource their payroll tax obligations.
The numbers indicate that there are plenty of businesses in America that no longer want to handle payroll and HR processes in-house. Some find that payroll and HR are too time-consuming. But there is a lot more to it than that. When you consider all that goes into HR and payroll processes, time is but one factor to contend with.
The Compliance Quagmire
With the start of each new fiscal year, federal and state governments add to already complicated tax codes with even more regulations. In addition to taxation, there is also the issue of complying with the Fair Labor Standards Act (FLSA) and the myriad of additional federal and state laws HR departments have to be fully knowledgeable of.
In short, compliance is a quagmire that is difficult to escape from. Get just one thing wrong and a company could find itself in plenty of hot water. It only takes one mistake to bring the full force of federal and state governments to bear.
Payroll and HR Are Costly
Given the complex nature of taxation and regulatory compliance, it is no stretch to say that handling payroll and HR in-house is costly. Companies have to hire top-notch staff who know their stuff. They need to put financial resources into computer software, hardware, network security, and IT infrastructure. There's a lot of money to spend just to keep HR and payroll running.
Payroll and HR Security Concerns
In-house HR and payroll also come with legitimate security concerns. In the data-driven world in which we now live, data is a prized possession that must be protected at all costs. Failing to secure data opens employees to all sorts of security breaches that could threaten their identities and finances.
Bear in mind that security risks do not always come from without. Sometimes, in-house payroll and HR staff commit egregious acts of identity theft and fraud. Sometimes they are complicit in outside attacks. Still other times, company staff may enable outward attacks through their own ignorance.
Payroll and HR Are Evolving
If all of this is not enough, consider the fact that HR and payroll are constantly evolving. Like every other part of business, there is very little within the payroll and HR disciplines that remains static for long. They must change as business changes. And in the current environment, business is changing quickly.
Outsourcing Is the Solution
Here at BenefitMall, our business revolves around providing payroll and HR services to companies of all sizes. To us, outsourcing payroll and HR is about more than just saving time. The services we provide are invaluable to clients striving to maintain regulatory compliance, keep up on their taxes, maintain data security, and keep pace with the constant change modern business is known for.
We invite you to learn more about our payroll and benefits administration services. Our solutions come in many flavors, offering clients the opportunity to decide how much assistance they need from us. And if you're in the construction or restaurant business, know that BenefitMall offers customized solutions for both.
Yes, payroll and HR processes are time-consuming. But they also represent a regulatory quagmire. They create security risks, consume a company's financial resources, and require constant effort to keep up. Wouldn't it be better to put it all in the hands of a specialist provider like BenefitMall?