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5 Reasons Why You Should Consider Outsourcing Your Payroll

Payroll remains an essential part of every business, a department that underpins the productivity of employees and ensures the ongoing strength of operations. While many businesses have historically performed their payroll in-house, managing their own payroll department, a growing number of business leaders are now outsourcing their payroll to reputable third parties.

If remain on the fence about the decision or are unsure about the benefits that outsourcing might bring to your business, then we have five reasons for you to consider.


An immediate benefit of outsourcing payroll responsibilities within a business is that employees are able to be reallocated. Their focus can, as such, be applied to more important tasks, those that are unique to the business and can best be performed by internal individuals and teams.

Reallocating staff resources can even save on costs with teams being able to resize according to the new capabilities and responsibilities, allowing businesses to streamline their operations.


Payroll is a process fraught with risk. Missed invoices or overpayments are, for example, issues that can have significant known-on effects not only on cash flow but on business reputation. It is in the interest of a business to eliminate mistake-making as much as possible but, unfortunately, human error will often occur.

Outsourcing to a well-regarded and reputable payroll service, such as People Group Services, reduces this risk far more easily than is possible internally. This is because teams of qualified employees are dedicated to the accurate operation of payroll and will ensure that each transaction is performed correctly.


With changing tax laws, as well as the general changes that occur with invoicing and salaries, there are a number of ways in which a business can fall out of compliance, opening themselves up to risk and even penalisation. Dedicated third-party payroll services remain up-to-date with guidelines and regulations surrounding payroll removing such risks from the process.

Obligations also include deadlines and these can occasionally cause issues for businesses who handle their payroll internally, especially if there are staffing issues. By outsourcing payroll processes, businesses eliminate the possibility of missing deadline obligations.


Businesses are seldom equipped to optimise their payroll departments, having to consistently upgrade payroll software and train employees, both of which can lead to significant financial costs. Outsourcing payroll processes eliminates this ongoing responsibility with dedicated external payroll departments incorporating these developments into their practice, offering a consistently high-quality and efficient service.


Internal departments are likely to be greatly affected by the absence of staff members. Payroll can, for example, become slowed or even halted should an employee become ill. It is possible to ensure cover is available but this, of course, comes with a staffing cost. By outsourcing the department, payroll services are ensured and reliable.

Additionally, many service providers will also offer competitive support services that, should managers or employees need to seek help regarding their salary or a specific transaction, there will be someone available to handle the case.

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