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Why outsource your payroll?
Posted on 01 July 2011 by Noreen Munro
Outsourcing has achieved a bad reputation over the past few years. Small wonder when most of us have been directly affected by it. Many of our high street banks use outsourced offshore call centres, which often are the cause of much frustration for customers. Or maybe you had to speak to one when the PC crashed and you phoned the manufacturers technical support line for help.
Speaking to offshore call centres is not the only reason why outsourcing gets so much bad press. Countless employees in the UK lose their jobs to outsourcing companies based abroad each year. The I.T industry is a prime example of this because the ability to work remotely over a network is now so easy. Corporations look to cut costs wherever possible and the UK's I.T workforce is often the prime target.
However, the need to streamline your business is essential in order to remain competitive. This is more important than ever considering the current economic climate. The hard truth is that it is better to reduce some of your head count in order to maintain financial stability for the company and its remaining employees, rather than risking the demise of the entire company. Reducing costs by outsourcing is unavoidable.
Call centers and I.T support are not the only areas where outsourcing can reduce operating costs. Company Payroll is another area where the savings can be significant. The ongoing financial commitment of running an in-house payroll department can often run into tens of thousands of pounds a year. Employing experienced payroll staff is the obvious and most significant cost. But the associated costs of setting up and supporting the payroll infrastructure on an ongoing basis can also add up. Software licenses and support agreements alone can run into thousands of pounds a year. For a small or medium sized business this amount of financial commitment could represent a major slice of the operating costs.
At this point outsourcing starts to become a serious alternative. One which could turn the company accounts from red to black. You also do not need to go abroad to benefit from outsourcing. There are many established payroll outsourcing companies operating in the UK. They are usually referred to as payroll bureaus. Finding one that suits your business is essential. Most offer fully managed payroll services. This means you receive all the benefits of an in-house payroll department at a fraction of the cost. A large payroll bureau can handle clients who may have over 10000 employees. Yet they may also take on clients with only 200 employees. Quite often the smaller clients receive an inferior service as the payroll bureau allocates its resources to its main clients. This is certainly not an intentional mistreatment of smaller clients but an unfortunate circumstance when a large client payroll can take so much time to process.
You do not have to be a corporate giant to benefit from payroll outsourcing. Depending on the size of your payroll the potential to reduce your operating costs could be as much as 80%. This could make the difference between your company sinking and swimming.
Find out more about outsourced payroll and Firefly at http://www.fireflypayroll.com
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