While the whole world has diverted its attention to the situation that COVID-19 pandemic has brought uponthe entire world, there is tremendous pressure exerted on organisations of all sizes in terms of profitability and business continuity. Many business operations have either slumped or come to a stand-still as many employees are forced to work from home due to the fear of spreading the virus, threatening an eventual decline in corporate turnover. Business processes such as payroll are one of the major areas which can be affected due to this reason. Sub-contracting or outsourcing your payroll process to an external party can benefit your business greatly during this challenging time period. Here are some of the salient benefits of outsourcing your company’s payroll at this unstable situation:

  • Freeing time to focus on Core activities

At this very moment, many companies around the country are revving up their business operations in order to stay ahead of the market as local, as well as global economies,areat a breaking point. As the processing of payroll is a mundane activity and does not necessarily add value to business processes, your staff can be freed from such and allocated to activities that directly impact your bottom-line.

  • Savings in costs

The above benefit of freeing employees for more productive activities in itself is a great saving in terms of costs. There is a greater cost saving as most organisations do not realise or factor in with regard to outsourcing. The cost of maintaining in-house staff is actually about 3 times the direct cost of the employee. This means that if the basic Salary is Rs. 50,000/- the actual cost to the company is roughly about Rs. 150,000/- per month. This is the case if you factor in the office space, direct overheads, recruitment and training, bonuses and allowances, medical and insurance, cost of leave, just to name a few. Given that, even if you pay an outsourced provider twice the basic salary of that employee, you will still save money. 

  • Expertise and being up-to-date

Outsourced payroll providers have to stay ahead of their field as that is their core operation. Not only are they up-to-date with the latest tax regulations, they are also aware of the various reporting requirements, both of which can change dynamically and especially so in Sri Lanka. This mean that you do not have to worry about reading up the latest gazette notifications or tax laws passed with regard to employment; it is the outsourced provider’s duty to know and to update you and also ensure that the calculations are in compliance with regulations. 

  • Minimising lay-offs and disruptions to work

The unprecedented circumstances of the Coronavirus pandemic has brought upon the world economy have proven a difficult situation for the Sri Lankan corporate sector as most local companies have not been faced with such an emergency situation before. This will drive many companies to downsize in order to cut costs and keep the business up and running. Furthermore, when you run your payroll internally, in the event one or more staff either fall ill, go on leave or at worse, resigns, there is added stress and disruption since you need to either assign alternate staff of hire. However, in the case of outsourcing, the services have to be delivered on the agreed dates irrespective of holidays or work stoppages.

Taking these factors in to account, considering athird party professional organisation to manage your payroll might be just what you need at a time like this.One inhibiting factor could be the risk of confidentiality which is understandable. At the same time, the reputation and reliability of an outsourcing partner hinges on ensuring that this is guaranteed with a proven track record. So it is of critical importance for outsourcing companies not to compromise on security, confidentiality and consistency.