1 January 2014
HR Outsourcing
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How to Assess ROI on Payroll Outsourcing

The success and satisfaction of employees increases by delivering timely and accurate payments. Payroll function plays a very strategic role in the organization by its accuracy to audit the expenses and deliver the right results to the decision makers. Besides keeping employee morale strong, timely payroll processing can help an organization increase its credibility.

In the good old days, payroll processing was strictly an internal process so as to protect accuracy, control, flexibility, responsiveness and data security. However, due to increasing competition and slow economic growth, many organizations have started to outsource its payroll services. With time and availability of professional payroll outsourcing services, the scenario’s changed for the better. There are newer techniques available today that eliminate payroll calculation errors and delays in processing the payroll.

Payroll outsourcing ROI and trends

Times, trends and technology are changing at a rapid pace. Once considered to be an expensive solution, payroll outsourcing services today have become a fundamental part for organizations with employee strength over 100+. Apart from maintaining accuracy and showing better results, payroll outsourcing has also proved to be more cost-effective. Payroll outsourcing also faces strict competition from in-house payroll software as well as traditional payroll processing.

Payroll Outsourcing ROI

Let us review these payroll processing methods, which can help you decide the best method for your organization:


  • Traditional payroll system: Prone to errors
  • Payroll outsourcing: Minimal error, improved accuracy
  • Payroll software: Zero software errors but prone to human errors
  • On Time Delivery:

  • Traditional payroll system: Prone to delays
  • Payroll outsourcing: No room for delays
  • Payroll software: Depends on nature of humans for timely payments
  • Control:

  • Traditional payroll system: Full control
  • Payroll outsourcing: Lesser control compared to traditional payroll system
  • Payroll software: Full control
  • Return-on-investment:

  • Traditional payroll system: Expensive
  • Payroll outsourcing: Comparatively cost-effective
  • Payroll software: More cost-effective than outsourcing but needs specialized staff that have technical know-how of the software
  • Assessing Payroll Outsourcing ROI

    Payroll outsourcing involves standard payroll processing, bonus payments, labor calculation, tax filing, new hire enrolling, direct deposit, reconciliation services, W-2 processing, and more. An average mid-sized organization consisting 500+ employees may pay only 10% of the gross payroll costing $20-$30 million a year as opposed to a staggering $50-$100 million a year (in-house payroll). This figure can be reduced through the use of sophisticated payroll software. However, the cost of hiring trained software professionals to use the software can prove to be more expensive.

    Through our Rishabh RPO services, we provide an array of services like Payroll outsourcing, HR, and recruitment services to take care of your HR and payroll processes.. We can help you significantly increase payroll outsourcing ROI by implementing best practices and eliminating errors. Call us at 1-877-RISHABH (1-877-747-4224) or fill in the contact form here.

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