Top 5 Reasons to Outsource Payroll

Outsourcing has become an increasingly popular practice for businesses who are looking to streamline their operations and focus on their core competencies. One area where outsourcing can greatly benefit an organisation is payroll management. By outsourcing payroll responsibilities to a specialist provider, businesses can not only reduce the burden on their internal teams but also improve accuracy, compliance, and overall efficiency.  

Here are some of the top reasons why organisations choose to make the switch.  

 1. It’s cost effective 

Data from YouGov stated that cost was the leading issue for outsourcing payroll. Carrying out payroll in house means having the member of staff on hand to do so and with payroll a regular but not daily occurrence, it either needs to fit in as an aspect of another role, or you end up the costs involved with a full-time member of staff for a single function.  

41% of companies that outsource payroll do so because it’s more affordable than doing it in house. An additional 28% of companies stating it reduces staff costs, with this being significant for larger businesses.   

2. Increased compliance 

While ensuring accurate - and timely - payment of salaries and wages is obviously important, staying on the right side of the law and meeting statutory compliance requirements is also critical. Non-adherence with regulations can result in serious legal and financial consequences. 

When you consider that there are at least 174 pieces of legislation affecting payroll in the UK at the moment – and that changes to these rules are perpetual – specialist knowledge is needed to keep on top of compliance and regulatory updates. Specialist providers of payroll services will always be up to date with the latest legislations and best practices without the need for you to pay for and implement the ongoing training. 

3. Expert support without interruption

Payroll professionals are true experts in their field and well placed to offer advice and support in this area, and having one on site doesn’t mean you have one available to access at any time. 

Unexpected occurrences can occur at the worst possible time and illness, or a domestic emergency can leave you without someone to manage payroll at short notice. There is also a well-documented skills shortage where 80% of UK businesses are reporting persistent difficulty filling jobs - more than double the pre-pandemic high of 35% - and should the on-site person choose to leave, sourcing a new individual with the necessary level of skill might not be straightforward. Outsourcing payroll with a provider means they will have numerous individuals able to meet your needs at all times. 

4. Employee engagement 

Getting payroll wrong can have a significant impact on the everyday lives of your workers – and cause employee engagement to plummet. Getting pay wrong sends a message that you don’t care about the wellbeing of your workers and can even leave them in a financially precarious position. And errors happen more often than you may think. In fact, research suggests that 60% of workers in the UK have noticed errors on their pay slips - and 20% have actually quit their job after a poor payroll experience. 

It is cheaper and easier to retain talent rather than find new talent, and so ensuring that your employees are happy and secure is vital. Reliable payroll is one important aspect of that. 

5. Focus on what your business does best 

Around a quarter of organisations (24%) choose to outsource payroll specifically to focus on other areas of their business. When you are busy with your day-to-day activities, managing payroll can be a distraction, even if you have a dedicated person in-house to manage the process as a part of the role.  

By outsourcing payroll, you are free to concentrate on the rest of your business. 

Outsource payroll with Comensura 

Outsourcing payroll has become a strategic choice for businesses seeking to streamline their operations, reduce costs, and improve accuracy and compliance. By entrusting payroll responsibilities to specialised providers, you can focus on your core competencies, enhance efficiency, and allocate resources effectively.  

As both the availability of talent and traditional routes to talent have become increasingly challenging, more and more customers are asking us about how to payroll workers not only in the UK, but globally. For them, having one provider that helps them navigate this complex area is game-changing. Take a look at our outsourced Payroll solutions page for more information.