• Date

    04 Sep 2023
  • Category


What is payroll outsourcing and why you should consider it?

Outsourcing of payroll presents an opportunity for businesses. It’s an opportunity to not only save the company valuable time and money, but also to ensure the business operates a risk free, secure, and compliant payroll function.

The need to comply with regulations imposed by HMRC and The Pensions Regulator means payroll is now a complex and significant legislative burden, so there has never been a better time to consider outsourcing it.

A fully managed payroll service offers end to end processing of a company’s payroll, including the setup, administration and support with auto-enrolment, payroll reporting and provision of ePayslips and eP60s.

Grant Saunders, Service Development Director, discusses in greater detail the benefits that come with outsourcing payroll.

Reduce payroll related costs

Companies can save money in a number of different areas when they outsource their payroll, including:

  • Training – Training payroll staff is essential to keep up with legislation and remain compliant.
  • Software – Depending on employee numbers, it’s likely businesses will be paying a licence fee for in-house payroll software.
  • Salaries – Reduce the time spent on payroll processing, research, and training.

Save time through payroll outsourcing

Outsourcing payroll will give business leaders back time to focus on growing the business versus time spent on an admin intensive exercise. We see many cases with clients who switch to us from an in-house provision where senior figures within the business are spending valuable time processing payroll.

Compliance peace of mind - payroll is more than ‘pressing a button’

When it comes to payroll, it’s often said that ‘it’s just a case of pressing a button’. However, there is much more to it than that. There are currently 174 pieces of legislation which directly affect payroll so it’s essential that payroll staff are up to date in this ever-changing area. This takes time and resources but it’s crucial to reduce the risk of non-compliance. Market leading payroll software now exists, but this is no substitute for knowledge. Without the knowledge of what you are processing, there is the potential of opening up to risk of error and non-compliance. This will not only lead to possible penalties but also unhappy staff.

Outsourcing relieves businesses of the legislative burden and provides access to a pre-existing robust and comprehensive compliance process.

Eliminate the risk of a single point of failure

We have been approached by businesses on a number of occasions who require urgent, temporary support for a pay-run. This is usually because they have one employee who processes their payroll, and that person is then unexpectedly absent from work. If there is no back-up support and knowledge within the business to cover this period of absence then who will step in and process the payroll, and more importantly, correctly? It’s not best practice to function with one single point of failure and by outsourcing payroll this risk is eliminated. Businesses can take comfort that every pay-run is covered by payroll professionals who have comprehensive knowledge of their payroll.

Access to trained and qualified staff

In March 2011 the Chartered Institute of Payroll Professionals gained their chartered status, recognising the payroll industry and the professionals within. Outsourced payroll staff are trained and can study for various qualifications beginning at entry level certification right up to a master’s degree. Having trained and qualified staff will ensure that when businesses outsource their payroll, they have trained professionals looking after this crucial business function.

Safe and secure storage of data

It is essential that all payroll related data is stored in a safe and secure manner. With some in-house operations retaining data on paper and using unsecure storage methods, it enhances the risk of a data breach which can have severe consequences both financially and reputationally.

The introduction of GDPR in 2018 gave employers in the UK yet more to think about in relation to the security of their data and the need to ensure compliance to avoid significant penalties. Given that the majority of personal data is held within payroll, it is essential that businesses are aware of their responsibilities in relation to GDPR.

A fully managed and comprehensive outsourcing service will utilise the latest cloud-based technology to help ensure that business and employee data is safe. Outsourcing payroll to Azets means your data is held securely and safely.

Direct access to related employer solutions through a dedicated payroll advisor

Payroll has touchpoints with a number of related employer solutions, including employment tax and HR. While a business may wish to look at these services out with payroll outsourcing, working with one provider across the full spectrum of employer solutions can remove any personnel worries. A provider of these services can directly assist businesses throughout the full employee lifecycle.

At Azets, we work seamlessly with our HR Consultancy and Employment Tax colleagues and these offerings bring real added value to the fully managed payroll provision.

Get in touch

For more information on the benefits of outsourcing or to discuss your requirements, please get in touch with a member of our specialist payroll team.

About the author

Grant Saunders Photo

Grant Saunders

Service Development Director Gloucester
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