How to Outsource Payroll Services: 4 Scenarios to Consider

outsource payroll service

Businesses today have many needs. But employees find it hard to fulfill those needs and stay productive when asked to perform duties they’re unfamiliar with. Especially HR duties. 

One of the most commonly outsourced HR functions is payroll. 

While it may sound simple, those who have found themselves undertaking payroll duties will tell you it’s a headache and hard work. But for experienced HR and payroll specialists, it’s no longer that difficult. 

Still, as a business you need to decide which payroll outsourcing services you want and the best scenario for you. 

In this article, we’ll be tackling the 4 scenarios for outsourcing payroll services, along with the benefits of working with outsourced payroll providers. 

Payroll outsourcing vs manpower outsourcing 

payroll outsourcing vs manpower outsourcing

Payroll VS Manpower

Before we dive into the benefits and scenarios, there’s something we need to get out of the way first. These are the differences between payroll outsourcing and manpower outsourcing. 

For the inexperienced, payroll is one of the most tedious HR tasks. It involves employees’ end-of-the-month salaries. However, payroll also factors in sick leave, absences, early-leave or late-in permissions, income taxes, and social insurance. 

By choosing to outsource your payroll needs to a payroll service provider, then you’d be giving this task to a third-party service provider like Tawzef. 

Meanwhile, manpower outsourcing involves outsourcing various hiring and staffing tasks as well as payroll. In other words, manpower outsourcing is the larger or broader umbrella, where payroll is one of the services provided. 

Why should you consider outsourcing payroll services? 

benefits of outsourcing payroll service

benefits of outsourcing payroll services

There are many benefits that come with outsourcing one or more HR services. Outsourcing your payroll means fewer headaches and mistakes. 

Here are 5 more reasons to outsource payroll:

1)  Save time

The biggest problem for non-HR people when it comes to payroll is that it’s time-consuming and hurts their productivity. 

Naturally, by outsourcing your payroll needs, your team can be more productive and better focus on the tasks they were hired to do.

2)  Save money 

Another major benefit of outsourcing payroll services is that it saves the company money. 

How so? 

1)  You don’t have to worry about hiring a payroll specialist full-time for a task that’s only required towards the  end of the month. 

2)  When your team’s productivity increases, you spend less money in overtime and lost productivity. 

3)  You only pay for the services you ask for. Not all outsourced payroll services cost the same. 

In the next section, we’ll be covering 4 scenarios where companies outsource their payroll services. Each one involves additional payroll-related benefits compared to the other.

3)  Reduces mistakes in payroll

One of the biggest problems of payroll is the mistakes. Whether it’s someone new to payroll or a non-HR employee doing the task, mistakes are bound to happen. 

And payroll mistakes can cause a massive headache for a company. Employees become disgruntled and unproductive. 

Outsourcing your payroll needs means you don’t have to worry about all of this.

4)  Faster payroll with automation

Another benefit to outsourcing your payroll to an HR service provider like Tawzef is that it means you can get your payroll done faster. 

Companies not only have the skills to get the job accurately but they also rely on software and automation tools that facilitate and speed up payroll processing and delivery. 

 5)  Ensures government compliance

The reason payroll is a tricky service is because it’s not just about the company paying the salaries at the end of each month. 

The government of the country where your business operates is an element to consider. Part of payroll services is ensuring the government gets its income taxes and the employer’s portion of the social insurance. 

Working with an HR service provider like Tawzef means you don’t have to worry about these requirements. 

4 scenarios for outsourcing payroll services 

4 scenarios for outsourcing payroll service

4 scenarios for outsourcing payroll service

When choosing to outsource payroll services, you’re likely to fall under 1 of the following 4 scenarios. 

After over 15 years in the Egyptian and Gulf markets, Tawzef has compiled these scenarios based on companies’ needs. 

Outsource payroll service scenario 1: The bare minimum

There are 2 sub-scenarios that fall under this one. 

In the first, companies don’t want their HR person to know how much each employee in the company makes, so they choose to outsource their payroll. 

In the second scenario, companies have a small head-count and don’t want to hire someone to do this full-time. So, they, too, choose the outsourcing option. 

In both sub-scenarios, the company needs someone to process its payroll, though not necessarily in-house. Accordingly, the company opts to outsource its payment processing needs to an HR service provider like Tawzef. 

In this scenario, the outsourcing service provider only acts as a payroll processor or calculator. Their job is limited to receiving attendance and absence sheets and calculating employees’ salaries, taxes, and social insurance at the end of the month. 

  

Outsource payroll service scenario 2: Payroll and labor needs 

One of the reasons payroll is a headache is that while salaries form the largest portion of the hassle, they’re not the only element. 

Companies need to adhere to the laws and regulations of the countries’ governments where they operate. They need to ensure that their paperwork is up-to-date, that they deliver monthly social insurance fees, and more. 

They not only need someone to calculate salaries, taxes, and insurance, but also finalize labor-related requirements with government entities. 

In this scenario, companies have more payroll needs than just processing. They need a dedicated executive to manage the processing and government-related requirements. 

Accordingly, they choose to outsource all these requirements to the payroll provider to handle. 

  

Outsource payroll service scenario 3: The full manpower package

Often times, companies want to outsource more than just payroll. They want to leverage a company’s experience and better understanding of the job market to handle payroll and recruitment. 

In this scenario, the company or client hands over all of their HR needs to an HR service provider like Tawzef. The service provider becomes responsible for the company’s HR needs from start to finish. 

They manage the company’s entire recruitment cycle, from creating and sharing job descriptions till a new employee is hired. 

  

Outsource payroll service scenario 4: HR Consultancy Service 

The final scenario involves a company looking to provide HR training to one or more of its employees. In this case, the client chooses to hire someone and then train them, which isn’t very common. 

 

How to outsource payroll services

steps to outsource payroll service

steps to outsource payroll services

So how do you go about outsourcing your payroll services? 

Here are a few steps to follow: 

1) Determine your needs 

The first step in choosing any service provider is to define your needs. You may want to break down those needs to ensure you and your service provider are on the same page. 

2) Ask questions 

Just because you’ve determined your needs doesn’t mean you shouldn’t ask your service provider questions. Be sure to clarify the tasks you want and what your service provider calls these services. 

Make sure you know what you’re paying for and what you’re getting in return. 

3) Evaluate one or more payroll service providers 

Depending on your needs and budget, you may choose to look at several payroll service providers to compare their offers and benefits. 

If you’re looking at several service providers, be sure to ask them the same questions for better comparison. 

4) Sign a contract 

Once you’ve settled on a service provider, make sure you sign a contract. If it’s the service provider’s contract you’re signing, make sure you read it carefully. 

Ask for legal advice from your legal department or a friend if you’re a small business. 

 

Why outsource your payroll to Tawzef 

By now you should know how outsourcing payroll works, the different scenarios companies use to outsource their HR needs, and the benefits of working with an HR outsourcing service provider. 

We’ve also mentioned that Tawzef is an HR company that provides payroll, manpower, and HR consultation services. 

In other words, Tawzef can help you skip the headache and hassle of payroll, hiring, or both. 

Here are a few reasons to consider outsourcing your payroll and recruitment needs to Tawzef: 

1) 15 years’ operation experiences:

Established in 2007, Tawzef has providing companies with various HR services including overseas recruitment. 

2) Uses best practices and tech:

As a leader in the HR field, Tawzef follows and uses HR best practices both in-house and with all the company it collaborates with. 

3) Works across various industries and specializations:

Having been in the market since 2007, Tawzef has worked with small, medium, and large-sized companies in various industries. It has also helped hire personnel across various jobs in many countries in the Middle East. 

4) Offers consultancy services:

Some HR services are vaguer than others, while some cannot be performed in-house or they’d be too costly. 

As an HR consultancy, Tawzef offers various consultation services to its clients. These can be one-off long-term requirements like creating an HR strategy. 

5) Offers services through partners and subsidiaries:

Another reason to consider working with Tawzef is the benefits of getting services you normally wouldn’t know where to find. 

These services include: 

  

Conclusion 

As you can see, there are many things HR service providers and consultancies can help you with. Similarly, there many services or sub-services that fall under payroll outsourcing. 

The whole purpose of outsourcing is to get your employees and teams to focus on the business and its needs. 

As you can expect, the cost of payroll outsourcing services differs based on your needs and the services required. 

Working with an HR outsourcing service provider like Tawzef can help you make the most of your outsourcing experience. 

Want to learn more about Tawzef’s services and prices for payroll? Get in touch with the Tawzef team today! 

  

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