People Management

Payroll nightmare?

If you know at least one person who takes care of payroll, then you’re probably familiar with all the annoying stories of disgruntled people they have to deal with every day.

Going out for a Friday drink with a friend of mine, who’s a Finance professional, means one thing – listening to her frustrations over payroll, accounts and the constant backlog she has to deal with.

As much as I can imagine payroll being a routine job, to say the least, I still cannot understand why is it such a headache for most companies! At the end of the day, if you’re running a business, you also have to pay your employees and somebody has to deal with this crucial process. If you get the employees’ pay wrong, you’re most definitely asking for trouble.

Working at Quad Consultancy gave me an excellent opportunity to do a bit of research to see why they claim that by outsourcing payroll, people’s life can be made easier.

As it turned out, it’s not payroll itself that is a nightmare but rather the way the companies decide to go about it. If like my friend, you work for a small or medium-sized company, then most likely you don’t have a separate payroll department. It’s either HR or  Finance who ends up doing it, and…guess what? Because of deadlines and other urgent matters, payroll sometimes ends up being seen as a “side job”…and additional task…a nuisance!

They both seem to be thinking that accountants are there for numbers and HR to… well, deal with people. Unfortunately, payroll needs a bit of both and hiring a payroll administrator equals additional cost to your business.

I can imagine how the time to run the payroll function is a cost, but when you add the initial investment in the software, and the yearly costs of software updates, and maintenance agreements, plus the employee’s leave, sick leave, bonuses, NI and other costs, then the natural question is: “is it REALLY worth it?”

And let’s not talk about the headaches of payroll administrators needing to take sick leave at the end of the month. What about replacing them when they leave? Now THAT is a nightmare!

But it CAN get worse! Have you considered the issue of confidentiality? How many times have companies experienced leaks of information about salaries and – horror of horrors – those EVIL performance bonuses?

So, it seems like I got a pretty straightforward answer to my question about payroll being a company’s nightmare.

What’s the solution?

OUTSOURCE!

I’m neither a business owner nor a frustrated employee dealing with payroll. However, I cannot understand why anyone would want to go through so much hassle and expense. It’s just easier to leave it to professionals who will take a headache away at a CHEAPER cost!

Why would you waste time and money on payroll when you can free up the time and boost the productivity by investing in skills they will actually want to learn and use at work? Outsourcing will definitely work out cheaper than hiring a payroll administrator, training them and then watching them leave because they got bored of doing the same thing month in month out…or because they were offered more by someone else. REMEMBER, a good, reliable Payroll Administrator comes at a cost. A huge one indeed!

Now I’m off to meet my friend, and guess what I’m going to be talking to her about! Yes, you’re right. I’m going to talk to her about payroll outsourcing… Maybe in a few weeks, we’ll be able to talk about boys, clothes, hangovers, gossip and other interesting stuff…

What Are You Waiting For?

by Mark J Galea

Many employers are outsourcing their payroll service to third parties, and here are some of the reasons why:

Free up time – Payroll computation is a time-consuming process. Outsourcing payroll can free up staff time to pursue more important value-added and revenue-generating activities, thus boosting productivity.

Reduce costs and boost productivity – In addition to the Payroll Administrator’s salary, as an employer you need to pay NI contributions; statutory bonuses and other entitlements; leave and sick leave (over 1 month of unproductive hours paid to an employee). The direct costs of processing payroll can be greatly reduced by outsourcing this function. In addition to enjoying great savings on the cost of employment, you will save the opportunity cost (not to mention once again the lack of productivity) spent on time dedicated to hiring any possible replacements for long absences and backfills. When, you also factor in other expenses related to the investment and maintenance of hardware and software (yearly updates, license renewals, maintenance agreements etc), you will realise that the saving you make by outsourcing payroll is actually much bigger.

Ensure confidentiality – By outsourcing this function, you are reducing the number of people within your company who are privy to information related to pay packages, pay rises, and other information that can easily be leaked to other parties within the company.

Ensure continuity – If your Payroll Administrator falls ill, or needs to take leave around the end of the month, the timely issuance of employee’s pays and salaries will disrupt other operations (it’s usually Finance that takes the hit). Pays and salaries need to go out on time in order not to demoralise your employees. When outsourcing your payroll function, you are protecting your business from these risks.

Alleviate the pain – In-house payroll is a headache at best and a nightmare at worst. By outsourcing this function, you will eliminate a tiresome source of regular pain.

Avoid technology headaches – A constant question is whether they have the latest version of their payroll software and the most recent tax and NI bands installed on their computer. Using the wrong tax computations will result in penalties and big employee dissatisfaction.

Leverage outside payroll expertise – Most business professionals tend to be so focussed on meeting targets set by ambitious budgets, that they tend to overlook constantly changing regulations (both statutory and those issued by the EU), yearly changes in NI categories, and frequent changes in tax bands.

Losing the Payroll Administrator – If your Payroll Administrator gets a new job, you will have to spend considerable time and money looking for a resource that is getting scarcer due to a number of different reasons. Consequently, salaries for Payroll Administrators are shooting up. Using an outside service eliminates that business risk.

Should You Make Yourself Indispensable?

by Ian Sammut Dacoutros

Keeping your cards close to your chest guarantees your survival as an individual, right? This idea may have been popular a long time ago but in this age of knowledge and information, it is a big no no.

If you as an individual, a Manager, or an entrepreneur choose to keep your knowledge to yourself, you are essentially slowing down – or even hampering your own and your organisation’s growth and development. If you have employees keeping knowledge from you then it’s even worse.

What happens if these employees want to leave the organisation or if they have an issue with the organisation? Can they effectively hold the organisation at ransom with their knowledge?

Knowledge management is a very wide term and several people define it differently. The main differences come from an exact answer to the question: What exactly is knowledge? Even without this though management in organisations are focusing and investing more and more in it.

Essentially knowledge management is a process that organisations undertake to generate value from the knowledge in and around their organisation. They look both at the knowledge held in their people and the knowledge held outside through their customers.

The ultimate aim is to get this knowledge together and use it throughout the organisation so that the whole organisation will have access to all its knowledge, all the time. Imagine a company where the sales team know all the complaints the company has received and how they were resolved, the sales team could be helped so that the complaints would reduce.

Unfortunately in the age where there is an app for everything many organisations are being fooled into thinking that by simply buying a system all their knowledge problems will be solved, then after spending a hefty amount the project fails because the solution is not the system. A worker can have all the best tools but if they do not have the skill to use them or the training then tools are useless.

In the next article we will discuss what exactly knowledge is and the different types of knowledge.

Jobs in Financial Services – The Reality

by Cyril Chanson

Advertising many positions on the web, I realised the significance of financial job offers. Wanting to further my knowledges I researched it and you could find my research below. I hope it would be useful.

 

What are “Financial Services”?

First of all, before digging into the topic, I thought that it is relevant to explain what financial services means. In fact, this term gathers all services offered to consumers and companies from a broad range of organizations such as insurance companies, banks, investment companies. The proposed services include corporate services, financial planning opportunities and money management, as well as providing information.

The financial services has several functions such as enabling exchange of goods and services in the economy, mobilizing savings and transforming risk, just to mention a few purposes.

Malta, thanks to its location in the Mediterranean, is an interesting place for doing business. It became more fruitful since the country became an EU member and has enjoyed the benefits from this market.

 

How has the financial industry in Malta changed since joining the EU?

Since Malta became an EU member in 2004, Malta has accelerated its growth in all sectors of its financial services industry. Malta’s legal and regulatory framework met EU standards in 2004 which encouraged financial advisors to invest in a strong economy and framework. A few years later Malta adopted the Euro in 2008 and this step has made the financial services sector grow much faster.

The introduction of passporting rights has provided companies the chance to establish branches on the island, and thus many opportunities have opened up between Malta and the EU. In these days, the financial industry benefits from the EU international market of over 500 Million people and 28 countries.

Malta has set an objective to become the European financial centre and has achieved a lot towards that goal.

 

What has helped the financial market to flourish?

I was wondering how Malta could be so attractive to foreigners’ investors. After some research and questions I was able to highlight several assets. Malta owns a stable macroeconomic environment in which every streetlight are in the green. The current legal situation remains to be focused on attracting investors by the government and the status-quo is maintained. Malta is viewed as a safe country and stable one, which make the country interesting when a CEO is looking to it. The politic system is predictable and extremist parties do not have a place in it. For a financial perspective, the investors like nothing more than predictability continuity, which can be fully offered by Malta.

In January 2015 the minimum wage set up at 720 euro per month which corresponds to 50% of original EU 12 states.

The booming of Malta’s financial centre has happened due to its pro-business attitude, excellent regulation and competitive cost of doing business. The successive Maltese governments have gone about concluding double taxation treaties with 70 countries. This policy encourages trade not only with important trading partners but also with emerging countries.

The location of Malta in the Mediterranean Sea helps the island benefit from the Islamic finance as it has stronger links with North African countries such as Libya, Tunisia and Egypt. Financial companies from these countries who locate their subsidiary in Malta benefit from the EU market and an attractive and efficient tax structures.

Indeed Malta’s labour costs are comparative to the newer EU member states and lower than other established members of EU. Malta labour costs offer greater value for money than two thirds of those in the Western European countries.

 

What are the consequences on the labour market?

At a glance, the financial service market contributes to GDP up to 13% with more than 10,000 employees. In Malta, the GDP has being increasing at over 3% per annum compared to the EU average of 1.3%.

This growth is not predicted to decrease due to positive actions by the government to encourage the sector to prosper. For instance, the annual expansion of Malta’s financial sector stands at 25% meaning many new positions are appearing into the work market.

Furthermore, ranked the third lowest unemployment rate of the EU with 5.1% -behind Germany and the Czech Republic- Maltese workplace is highly active. For a decade, focus has been made by the government on the academic front. More than 60% of Maltese students are going to further education, although it is an English speaking nation, people are also trained to different professional such as Italian, Arabic, Spanish or French.

With a low unemployment rate, companies and especially HR firms are faced with the shortage of candidates; they have to find highly qualified people to fit their positions. In fact, integrating the EU has facilitated the mobility of EU workers; employers now have access to a much larger pool of workers than before. Actually, to attract further foreign talent Government offers 15% off on flat tax rate to highly qualified persons into key positions within those industries.

 

Why are professional HR firms better placed at handling this growth?

I interviewed Simon Casolini Operations and Recruitment Manager for Quad Consultancy’s Malta branch  in order to further my knowledge about the move appearing in the Financial Service field.

In fact the work market is currently changing, the global rapid growth from the EU’s companies in the Financial Sector in Malta has created a lot of new positions but the pool of candidates isn’t big enough.

 

Outcomes from my interview

First of all, the sector has seen much more movements than previously, many new positions have emerged and wages have been incressing steadily for the last 3 years. Indeed, applicants are in a stronger position nowadays than they were in the past.

At the same time, the requirements, including experiences and qualifications has been going down due to the scarcity of talent. For example, where companies previously sought candidates with a specific degree and 5 years’ experience, they are now seeking people with a related degree and 3 years’ experience. Companies are reducing their requirements due to a lack of employees.

By reducing requirements, moves have been observed in terms of certifications related to the financial service. In this field, background in banking, accountancy as well as financial compliance is needed by companies without degree; certifications in those fields would be of advantage for candidates.

A good candidate with a moderate experience has now several advantages that applicants had not before. The wages have been going up and applicants have more opportunities within several companies.

Nowadays, employees are exposed to more duties and areas of competence compared to the past when they spent much more time focused on functions in one or two areas. Therefore, they are increasing their employability skills and general responsibilites.

This new trend is interrelated with the growing of Head-hunting. Moving people has become an issue especially because the market is small and people physically know each other and companies provided services.

It is at this stage that the professional Consultant comes into the process. By “professional Consultant”, I mean HR professionals who are able to fit position on behalf of companies. The professional Consultant has various assets such as a great database of candidates which can serve the demand effectively and professionals who are very well connected. Using a reputable HR firms allows companies to save time and money, such as advertising expenses and CV screening.

As the professional Consultant, having a very strong network of valid candidates, knowledge of their background and professional expectations is a great benefit. HR firms are able to offer an efficient and effective way of helping the client to find perfect fit, and providing their manpower needs.

They make sure the candidate understands what the company is looking for, going deeper than just the job description, giving them the background required about the company and ensuring that they have the right cultural fit. Therefore candidates are better prepared, and both of candidates and clients are reducing the risk.

The Right People At The Table

by Mark Fritz

There is old saying that always stays current: People Trump Strategy. In fact, people often trump processes, procedures, and methodologies. It is not that these other things are not important, it is that their effectiveness or ineffectiveness is driven by the people executing the processes, procedures, and methodologies. You don’t really say: “That process let me down!”…you say; “That person let me down!.

CHANGE is really 80% PEOPLE and 20% the rest…if we use the traditional 80/20 rule.

To drive successful CHANGE, it is often about getting The Right People at the Table; and there are two outcomes that successful leaders invest more focused time to create than others.

  1. Quality of the Output from the Meeting

(Driven by the quality of the discussion and that is from the quality of the people)

  1. Quality of the Influence after the Meeting

(Driven by the attendees’ ability to influence others to take action on the output)

These two outcomes determine who needs to be there, and if the right people are not there; the perceived quality of the output of the meeting is always suspect.

Consider this situation:

You have a meeting on the change, and another department only provides you someone that is available; and not their best person (knowledgeable and with influence both inside and outside his/her department). Now the key questions…

  • When others see this person attending the meeting, do they feel this meeting is important? Probably not.
  • What will others feel about the decisions/solutions coming out of the meeting? They would probably have low expectations given the person who is attending.
  • When this person goes back to his/her department, do you feel anyone will be listening to him or her? Again, probably not, because they do not have the respect from their peers. They were just available!

As you can see, the people you get to your tables (the meetings) have an impact on the quality of the meeting before a word is even said, and then any influence on the results after the meeting too.

There are three key habits I have seen in leaders who get The Right People at the Right Tables, and if you practice these two habits; you will have more success getting the right people to your tables.

  1. Frame Meetings to Achieve, not to Discuss

How many times have you been invited to a meeting with this phrase: We need a meeting to discuss… Probably all the time, and now here is a great question: Is discussion an activity or an outcome? Right, it’s an activity, and this is why these meetings you are attending are wasting your time.

When you frame the meeting as a discussion, what do you get more of? Discussion! Also, you often get people talking not because they have something useful to say, but because they just like the sound of their own voice!

If you want to run more successful meetings, you need to frame the meeting as an OUTCOME, not as an activity. You need a meeting to ACHIEVE.

From a leadership perspective, the majority of your meetings only have three outcomes…because you need:

1. ACTION You want progress, and people owning their Action.

2. DECISION You need a Decision that enables more action.

3. ALIGNMENT You want Alignment that drives teamwork and more effective action.

Next time, don’t frame your meetings as an activity (to discuss), but as an outcome (to ACHIEVE)…and more of the right people will want to come to your table.

  1. Build the Key Relationships Before You Need Them

If you remember the story about Noah from the bible, did Noah start building the ark before it started raining or after it started raining? Before, right? You need to build your key relationships before you need them. In getting the right people around the right tables, it often comes down to the quality of your relationships with other key stakeholders. When you have built strong relationships, you then have more influence in getting the right people from their organizations to come to your meetings.

To gain that key influence with others, you start by wanting others to listen and engage with you, and that means starting with them (not your) and using:

their Door: You enter the door of what they are most interested in (their self interests), and then wrap what you want within what they want. This has them wanting to listen. How many times do you instantly switch off at the start of a conversation when others begin by talking about only what they want!

and then on their floor: You focus the conversation on the level of details that they are most interested in discussing. This has them wanting to engage with you because you are having the conversation at their level of interest. If you are a leader, you have probably experienced this…your people come to you and want to tell you all the details before getting to the point! They say that a leader’s maximum patience is about 90 seconds in this situation. If you want more influence with others…enter their Door (so they listen) and discuss on their Floor (so they engage). Also, teach your people this and they will package their conversations with you in more concise ways.

  1. Choose People Who Can Both Contribute and Influence

There are many leaders who look at the organization chart in determining who they need to be at their meeting representing that department or area of the company. However, the most successful leaders never think in terms of represent. They think in terms of contribution and influence.

The Right People you need at all the tables are the people who can contribute the most towards gaining the best decisions and solutions, and who can then go away and influence others within their own areas and organizations across the company. It is might be difficult to gain both of these in the same individual and therefore you will then need to invite two people to gain the impact your need both in the meeting and after the meeting. Far too many managers think of the meeting only, and not about the impact after the meeting (when the action is needed and has to be reinforced with others).

Lastly, there are two feelings that fuel people to support the decisions in meetings and to take the necessary actions after the meetings. They are:

It’s Worth It and I Can Do It.

These two feelings are what drive people to sustain the right mindset and keep taking action.

It’s Worth It (They ask themselves…What’s in it for me?)

People need to feel that it is personally worth it to them? Far too often you share why it is worth it to the company, but real change happens at a personal level. A company change is simply the collection of enough personal changes. That’s why people who are great at driving change are also great at adapting their communications…because that’s the way to make it personal to others.

I Can Do It (They ask themselves…Can I handle the conflict?)

This is a confidence and character issue. Decisions often require doing something different and differences drive conflict. Most people don’t change because they feel they are not able to effectively deal with the conflicts they will have with others. They say that people rise in organizations to the level they can deal with the conflict that comes with the role.

Therefore, next time you need to get The Right People at the Table, consider these:

Two OUTCOMES

Quality of the Output from the Meeting

Quality of the Influence after the Meeting

Three KEY HABITS

Frame Meetings to Achieve, not to Discuss

Build the Key Relationships Before You Need Them

Choose People Who Can Both Contribute and Influence

Two FEELINGS

It’s Worth It

I Can Do It.

When you focus on these two outcomes, three key habits and two feelings, you will get more of The Right People at the Table….and GAIN you more influence and more achievement.

 

MFAbout The Author

Mark Fritz is an “International”, having lived and worked across the world (Singapore, Egypt, Netherlands, Italy, Japan, UK and the USA), and lives in London with his Japanese wife and their cat Smokey.   His international career included leading enterprise systems implementations, leading international operations, and also coordinating business model development and changes.  Mark understands how to lead CHANGE and to get your people to OWN IT!

 

Are You 1 Of The 500?

In just 12 days, over 500 people have made use of our new service: a daily e-paper that is packed with information related to personal development, tech news, business & finance, art & entertainment, and other interesting topics.

We are very delighted with the increasing success of this service – especially the number of return visitors on a daily basis (around 30%). In addition, a number of people have been sharing our e-paper, or some of the articles contained within, on facebook and LinkedIn. This means that our readers are finding the articles relevant and interesting.

The paper is a collection of articles – carefully selected by us – that are published by highly reputable websites, blogs and e-magazines. This service is completely in-line with our quest to add value to whoever we interact with.

In case you still haven’t taken a peek at our new service, please feel free to visit at: http://paper.quadconsultancy.com

 

Two Tribes

by Andrew Morris

We come across two tribes of people in the business world. The Do-ers who do what they say or agreed to do. And the Talk-ers, who do not.

We know where we are with the Do-ers. They like responsibility and are fulfilled by getting things done and pleasing us. Once we’ve delegated, it’s out of our head and into theirs. Organisations and relationships thrive with Do-ers.

Talkers say, with sincerity, `leave it with me` but quickly forget what it was we left. They pretend to make notes. They make excuses for letting us down and ask for deadlines to be extended, often more than once. In short, they over-promise and under-deliver. Organisations and relationships can be destroyed by the Talk-ers.

Which tribe would you prefer on your team?

 

About the Author

andrewbmorris_medAndrew Morris is Chief Executive of the Academy for Chief Executives, helping businesses to accelerate growth through better leadership.  Andrew describes himself as a creative businessman, who enjoys meeting people from all facets of life. His mantra is ‘take your job seriously, but not yourself.’

Andrew describes himself as a creative businessman, who enjoys meeting people from all facets of life. His mantra is ‘take your job seriously, but not yourself.’

L’Inglese Di Barby

by Barbara Mazzarelli

Eccomi tornata con un nuovo post dell’angolo di Barby.

Come avevo anticipato, in questo blog darò qualche consiglio su come migliorare il livello di inglese.

In questi anni ho sperimentato un po’ tutti i modi per accrescere il mio inglese, rendendomi conto che, purtroppo, studiarlo in un contesto italiano non è sufficiente, poiché si migliora molto lentamente. È necessario quindi uscire dai confini italiani, viaggiare, fare nuove conoscenze ed esperienze.

Se si è ancora studenti, si può pensare a uno stage all’estero, considerando che in molte università è un percorso obbligatorio, quindi tanto vale sfruttarlo appieno. Ci sono molte aziende disponibili ad accogliere tirocinanti, in questo modo si può fare un’utile esperienza di lavoro in un ambiente internazionale. Ho fatto questa scelta io stessa l’anno scorso, lavorando tre mesi in Irlanda.

Un’altra possibilità è frequentare un corso di lingua disponibili. Sono organizzati dalle classi elementari, per chi è alle prime armi, fino agli avanzati, per chi desidera una conoscenza professionale. È una scelta abbastanza costosa, ma può essere considerata come un investimento. Anche una breve esperienza può aiutare molto: nel mio caso è stato così.

Due anni fa ho frequentato una scuola di inglese a Edimburgo, in Scozia. Era la mia esperienza all’estero, svolta completamente da sola, ed è stata un’ottima decisione: ho conosciuto persone di diverse nazionalità, evitando di stare solo con italiani. Sono stata ospitata da una host family locale, entrando in contatto con il loro modo di vivere. Anche se durata poche settimane, è stata un’utile esperienza che mi è servita soprattutto per superare l’imbarazzo iniziale, interagendo con ragazzi di diverse nazionalità, dai kazakistani ai brasiliani, condividendo esperienze e raccontando usanze del proprio paese. Con alcuni conservo ancora un rapporto d’amicizia grazie ai social, anche se siamo sparsi nel mondo!

Un’altra alternativa è cercare un lavoro stagionale estivo. È una scelta presa da tanti ragazzi per migliorare la lingua. A Malta ci sono moltissimi locali, bar, ristoranti, pizzerie che cercano costantemente nuovo personale, anche senza esperienza, per un lavoro serale. Solitamente, non è richiesta un’approfondita conoscenza dell’inglese per iniziare. L’ideale è lavorare in un contesto dove l’inglese è la lingua veicolare: stando in un ambiente interamente italiano e creando amicizie con compatrioti, si migliora veramente poco.

Altri consigli utili sono quelli di vedere film o programmi in lingua, per abituarsi al suono e al linguaggio: se inizialmente non ci si sente abbastanza confidenti, si possono usare i sottotitoli.

Inoltre, per implementare la conoscenza dei vocaboli, aiuta molto leggere. Se si reputa troppo complesso un libro intero, si può iniziare con dei testi un po’ più semplici: posso consigliare la serie Black Cat, che riassume i grandi classici della letteratura in modo più facile e breve, per sciogliere il ghiaccio con la prima lettura. A scuola avevo iniziato così, per poi gradualmente passare a libri più complessi.

Al prossimo appuntamento con l’angolo di Barby

Is This The Way You Exercise Judgement?

We came across this story on the internet, and it’s so powerful that we’d like to share it with you:

One Saturday Afternoon, Doctor James entered the hospital in hurry after being called in for an urgent surgery. When he got the call wasted no time getting to the hospital, changed his clothes and went directly to the surgery block. He found the boy’s father pacing in the hall back and forth waiting for the doctor.

On seeing him, the father yelled in a very stern voice, “Doc, why did you take all this time to get here? Don’t you know that my son’s life is in danger? Don’t you have any sense of responsibility?”

Doctor James smiled and said, “I am very sorry, I wasn’t in the hospital and I came as fast as I could after receiving the call and now, I wish you’d calm down so that I can do my work”.

The father said angrily “Calm down?! You want me to calm down??? What if your son was in this room right now, would you calm down? If your own son life is in danger while waiting for doctor than what will you do??” Doctor James smiled again and replied, “We will do our best by God’s grace and you should also pray for your son’s healthy life”.

“Giving advises when we’re not concerned is so easy” Murmured the father.

The surgery took a few hours after which the doctor James went out happy, “Thank goodness! your son is saved!” And without waiting for the father’s reply he carried on his way running by saying, “If you have any questions, ask the nurse”.

“Why is he so arrogant? He couldn’t wait some minutes so that I ask about my son’s state” Commented the father when seeing the nurse minutes after the doctor James left. The nurse answered, tears coming down her face, “He lost his son yesterday in a road accident, he was at the burial when we called him for your son’s surgery. And now that he saved your son’s life, he left running to finish his son’s service.”

Never judge anyone because you never know how their life is and what they’re going through. Pass this on if you feel this is true.

Let The Specialists Deal With It

by Mark J Galea

As businesses become more focused on delivering what they’re good at, the concept of outsourcing services to specialised providers is on the rise. While the cost of outsourcing a service may seem unnecessary at a first glance, it is easy to understand why businesses see this as a long-term investment.

Through their own experience, businesses found out that it pays them more to focus their energy to research, study, focus, and deliver the products or services that they’re good at, rather than running multiple “mini” operations from within thus giving rise to issues that end up being a distraction rather than added value.

It is precisely for this reason that the outsourcing of payroll is on the rise. It is extremely important to deliver employees’ salaries accurately and on time. If this is achieved, then payroll becomes invisible, but the very instance when employees lose trust in the payroll process, this becomes a really huge and sometimes insurmountable issue. Believe me, in one of my previous jobs I have experienced the latter, and I can confirm that it is very difficult for an organisation to recover from a situation where its employees lose trust in its payroll department. Especially when they end up thinking that this is being done deliberately by the organisation as a means to cut its payroll cost.

As the number of companies that are outsourcing their payroll service is on the rise, they must see some benefits in doing so. These are some of the benefits yielded by their decision to outsource payroll.

  1. Productivity – Payroll processing is time-consuming. With this burden removed, teams can focus on doing more productive things that have a direct impact on the organisation’s cope operation. So, rather than running a number of mini ancillary operations internally, a number of businesses prefer to just focus on what they should be doing, and what they’re good at
  2. Lean – With businesses “trimming the fat”, many have realised that it’s actually better to outsource services to providers who have the necessary expertise and infrastructure, rather than to set up a mini infrastructure in-house. When you add on the additional burden that one needs to strive to attract and maintain expertise, the whole process becomes even more taxing on the organisation’s energies
  3. Cost – It is generally more cost effective to outsource the service than to employ a reliable payroll clerk (salaries are reasonably high for payroll specialists), invest in a payroll software system, pay for service updates and maintenance
  4. Focus – Business owners, especially SMEs, are so focussed on the regulatory processes of their core business, that they tend to lose sight of new employment regulations that come into force from time to time. This may give rise to actions that, if challenged in a tribunal, may lead to hefty fines and bad branding through suspicion of intentional wrongdoing
  5. Accuracy – A business is likely to enjoy a more reliable payroll service if this is delivered by an experienced specialist, than if this is being performed as an additional task by an employee
  6. Continuity – With an outsourced payroll service, a business will not affected by leave of absence, sick leave, or resignations. If, on the other hand, an in-house payroll specialist leaves the organisation, the whole process together with its reliability, efficiency and accuracy is in jeopardy
  7. Accountability – In case of irregularities (no matter how genuine the mistake), it is the payroll service provider’s responsibility to make things right. On the other hand, if payroll is handled in-house, it is that business that has to deal with the tax authorities thus resulting in a considerable opportunity cost
  8. Confidentiality – Leaks about people’s salary are not a rarity in organisations. If, on the other hand, someone somewhere is processing the payroll remotely while only being in touch with only one or two business liaisons, it is more likely that this sensitive information is contained and therefore confidentiality is ensured

Generally speaking, these are some of the advantages of outsourcing payroll. Indeed, every company has its own needs and circumstances; yet productivity, cost efficiency and employee engagement are common factors that have a direct impact on the success of any organisation. No matter how big or small.