What Is The Role Of Payroll Outsourcing In SMEs Growth?
What is payroll outsourcing?
Payroll Outsourcing is the practice of hiring third-party companies to perform tasks normally performed by employees. These tasks may include processing employee paychecks, paying bills, calculating taxes, etc.
The term “outsourcing” comes from the Latin word “ex-officio” meaning “outside office”. When referring to the business world, the term means that a company hires someone else to do work that would otherwise have been done internally.
1. Payroll outsourcing — SME’s take-up
According to KPMG’s Global Outsourcing Monitor 2018 report, the global payroll outsourcing market grew at a CAGR of 14% between 2015 and 2017. According to the latest survey, around 18% of small businesses (SMB) were using third party payroll services.
2. Why do SMBs use payroll outsourcing?
Payroll outsourcing gives SMB’s access to cost effective solutions. In addition, they also get access to a variety of business processes associated with human resource management. These may include flexible work schedules, employee training, HR administration etc.
3. Benefits of SMEs using payroll outsourcing
- Cost saving
- Increased operational efficiency
- Improved cash flow
- Access to qualified labor
- Reduced time and effort
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