10 September 2013
HR Outsourcing
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Adoption of Payroll Outsourcing in Europe

Payroll outsourcing statistics suggest that adoption of payroll outsourcing as a service is increasing in European countries. However, there are still many differences between the adoption rates and many factors responsible for the same.

Ask any payroll specialist in Denmark about payroll outsourcing rates in European countries and their answer will generally be 50%. They think it is a safe figure but it is far from the actual figure. Among the European countries, the payroll outsourcing rates range from 1% in Switzerland to over 80% in countries of Belgium and Denmark.

There are many factors which influence the adoption of payroll outsourcing in Europe, some of which are as discussed below:

Europe Payroll Outsourcing

Differences in national cultures

According to payroll outsourcing statistics, northern European countries are more open to adopting outsourcing than are southern and eastern European countries. Their individual national cultures are said to be one of the major reason behind this difference. Also, historically speaking, Northern American organizations were more open to the strategy of outsourcing in comparison to European countries.

One other reason why northern European countries have a higher adoption rate is that the UK was the first preference for any American organization to set up their business. Hence, payroll outsourcing in the UK became a growing trend, with it becoming the origin of payroll outsourcing among European countries. Payroll outsourcing has gradually been spreading southwards and eastwards, growing steadily.

Payroll vendors’ dynamism

Innovation in the services offered by vendors for payroll outsourcing, is another factor. GSI, a payroll and human resource services company headquartered in Paris and now a part of ADP, introduced well-tailored business solutions. It consolidated relevant business cases in the French market and succeeded in convincing small as well large scale enterprises that payroll outsourcing will prove advantageous for them.

Today, with a variety of service offerings under payroll outsourcing in Europe, hardly anyone wonders about whether payroll outsourcing is relevant for mid-scale organizations or not.

The enterprise culture

One other factor that influences payroll outsourcing in the UK and other European countries is the core business and different business models of organizations. For example, manufacturing enterprises prefer to retain some of their processes in-house while service enterprises are more accustomed to outsourcing their services to a reliable and trustworthy external provider.

Enterprise size and the right fit

There is a difference in which enterprises of different sizes perceive and adopt payroll outsourcing in Europe. Small enterprises (with employees fewer than 50) generally do not have the payroll expertise in-house and hence outsource the process. Middle scale enterprises are generally of the size that can afford the hiring of in-house payroll expertise.

In their case, outsourcing only comes into picture when they face any kind of disruption. For large scale enterprises, payroll outsourcing is more of a strategic implementation rather than a need. Most large scale organizations tend to focus more on their core business and streamlining their costs. The HR is utilized more in terms of managing their human capital and non-core processes such as the payroll are outsourced.

The above mentioned factors have played a major role in the gradual growth of payroll outsourcing in Europe and are continuing to do so. Rishabh BPO has the necessary expertise that can help you outsource your payroll process in sync with these factors. For more information on our payroll outsourcing services, call us at 1-877-RISHABH (1-877-747-4224) or fill in the contact form.

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