The 4 Things You Must Consider Before Outsourcing Payroll

Last updated: 2021-05-26 (originally published on 2016-11-28)   — by Alex

As your company grows and payroll management becomes difficult and time-consuming, outsourcing your payroll process to an external vendor might seem like a solution. Most third-party payroll vendors help to take care of the nitty-gritty details of payroll – from calculating overtime hours and allowances, to taking into account legislative changes and amending the payroll calculations accordingly.


However, before you decide to outsource your payroll function, there are a few long-term results and consequences you must consider:

1) Losing control

When you enter a contractual agreement with an outsourced payroll vendor, you are bound by their terms and conditions. This means that they get to decide how to to store your employee and payroll data, as well as the services rendered to your organisation. Furthermore, the security of your company’s confidential and sensitive information now lies in their hands.


2) A bottleneck when accessing data

As your company’s data now resides on an external party’s server, this creates an additional layer of communication when you attempt to retrieve information. For one, your outsourced payroll vendor might charge you a service fee for extracting the data that you require. Secondly, they might not act as promptly as you require.

3) Lack of company familiarity and identity

In the absence of an in-house Payroll Manager, you will naturally point your employees to a client service agent in times of dispute. Depending on your service level agreement with the vendor, your employees may have to deal with a different client service representative each time. This is not ideal and may create frustration among your employees when they have to repeat their issues each time.

4) Higher cost

Not all the services provided by outsourced payroll vendors will be suitable for your size of company. At times, you might end up paying more than what you really need – budget that you will much rather spend on growing your business.

While outsourcing payroll management may sound like the easiest way to resolving your payroll woes, it is not the only solution. Instead, take time to do your due research and consider other options such as adopting payroll software. One such example is Gpayroll who provides a similar framework as an outsourced payroll vendor – end-to-end payroll processing software at an affordable price. Remember, make the right payroll decision that is the best fit for your company!

Also read: Our CEO’s favourite productivty tools:Infographic

This a guest contribution submitted by Gpayroll. The views expressed here are of the author’s, and Zegal may not necessarily subscribe to them. You, too, are invited to share your point of view. Learn more about guest blogging for Zegal here.

About Gpayroll

GpayrollGpayroll is an easy to use, self-run online payroll service that will redefine and revolutionize the payroll industry. Its intuitive and automated system will help business owners focus on their core business without the hassle of managing payroll. Follow on Facebook



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