HR And Payroll Outsourcing in 2022

Payroll outsourcing entails handing over all or most of your payroll management to payroll outsourcing services. The payroll software you select will integrate with your current business architecture, including your HR department, and provide services each pay cycle. The availability of cloud computing and a number of software applications has significantly improved the services that managed payroll services may deliver to their customers.

Did You Know? According to industry research, the worldwide payroll outsourcing market would increase at an annualised pace of about 6% between 2017 and 2021.


  1. Payroll functions are typically outsourced to save money and time when dealing with financial duties related to payroll.
  2. Hiring outsourced payroll providers to handle payroll activities eliminates the need to hire and train a big in-house payroll staff, purchase proper payroll software, and stay current on difficult tax requirements.
  3. HR and payroll outsourcing benefits all types of businesses, whether they have a large payroll, a mid-range workforce, or a small payroll.

How Often Payroll Timeline Is Managed In Businesses

Current Employment Statistics has been providing annual length-of-pay-period information in response to interests of the public in how frequently businesses pay their employees.


Issues At Hand: Client’s Story

Our client’s mother company is based outside of Bangladesh. They have their liaison branches here in Dhaka but they do not have enough qualified workforce to maintain their standard. They have tried hiring payroll outsourcing services before but they faced so many problems. In this section we will discuss those issues:

1. Cost: Payroll outsourcing incurred additional charges, depending on the additional services they required.

Basic payroll outsourcing will cost you around $200-$250 per employee per year.

2. Paycheck Delivery: Obtaining the necessary information for processing payroll by the cutoff times was a common payroll difficulty. This, in turn, had an impact on payroll timeliness and when staff receive their paychecks.

3. System Integration: Our client’s systems didn’t work with their outsourced payroll provider’s platform

4. Data Security: Our customer was previously concerned about entrusting sensitive employee information to their payroll services supplier. 

5. Vendor Stability: Their managed payroll services provider didn’t have sufficient reserves to handle the processing period’s total cash flow.

Let’s see how difficult it would be to meet financial obligations if paychecks were delayed according to a 2021 survey from service holders:

Solutions We Provided 

  1. We offered our client the DIY solution which included the client taking care of employee maintenance, payroll entry and report production. This helped our client to reduce their payroll  cost by 50%.
  2. We provided paperless payroll outsourcing solutions like direct deposit and pay cards. Which made payments more immediate and eliminated late fees.
  3. All our platforms are cloud-based and plug-n-play. So our system integrated with our client’s system easily.
  4. We have a really good reputation in the HR and payroll industry so the client was assured with their data security.

Advantages of Payroll Outsourcing

Payroll outsourcing, the practice of delegating payroll functions to an external service provider, offers several benefits for businesses. Here are some key advantages of payroll outsourcing:

  1. Time Efficiency: Payroll processing involves complex calculations, data entry, tax deductions, and compliance requirements, all of which can be time-consuming. Outsourcing payroll frees up valuable time for business owners and HR personnel, enabling them to focus on core business activities and strategic initiatives.
  2. Expertise and Compliance: Payroll service providers specialize in payroll management. And stay up-to-date with constantly changing payroll regulations, tax laws, and compliance requirements. This helps minimize the risk of errors, penalties, and legal disputes.
  3. Accuracy and Reliability: Payroll errors can be costly and lead to employee dissatisfaction and compliance issues. Professional payroll service providers have robust systems, processes, and quality controls in place to ensure accurate and reliable payroll processing.
  4. Data Security and Confidentiality: Payroll data contains sensitive employee information, including social security numbers, bank account details, and salary information. Payroll outsourcing providers implement stringent data security measures to protect this confidential information.
  5. Scalability and Flexibility: As businesses grow or experience fluctuations in their workforce, payroll processing requirements may change. Outsourcing payroll offers scalability and flexibility, as service providers can easily adapt to accommodate changes in employee numbers, pay structures, and payroll schedules.

How Payroll Outsourcing Impacts Business

Payroll outsourcing refers to the practice of hiring an external service provider to handle payroll-related tasks and responsibilities on behalf of a business. Here are some ways in which payroll can impact a business:

  1. Cost Savings: Payroll outsourcing can result in cost savings for businesses. This can be more cost-effective, especially for small and medium-sized businesses.
  2. Time Savings: Payroll processing involves various time-consuming tasks, such as calculating employee wages, deducting taxes and benefits, preparing payroll reports, and staying updated with payroll regulations.
  3. Expertise and Compliance: Payroll outsourcing providers specialize in payroll processing and stay updated with the latest tax laws, labor regulations, and compliance requirements. This helps minimize the risk of errors and ensures compliance with legal and regulatory obligations.
  4. Enhanced Accuracy: Payroll mistakes can be costly and lead to employee dissatisfaction, legal issues, and penalties. Outsourcing payroll to experts reduces the likelihood of errors, as the service provider typically has robust systems and processes in place to ensure accurate and timely payroll processing.
  5. Data Security: Payroll data contains sensitive and confidential employee information, such as Social Security numbers, salaries, and bank account details. Outsourcing payroll to a reputable service provider can enhance data security.

Bottom Line

The workforce of today is evolving. However, paying employees, freelance workers, and independent contractors is still an important component of the puzzle. Payroll trends are important to understand since they might put your firm behind the curve and expose you to legal risk. For your small business, standardising your procedures internally or working with managed payroll services solutions like us can be easier and more cost-effective.