Almost all businesses outsource their payroll services. A business can have several reasons or objectives to meet. However, the result should always be better service to the employee and reduced cost and effort for the employer.
For the employer, the benefits can be to reduce their in-house training, concentrate on their core business or ensure that they are providing the best services to their employees. The benefits to the employee should be access to knowledgeable resources. This can be through personal contact or employee self-service.
Business payrolls are complicated. Assorted taxes must be filed consistently and accurately to applicable regulatory agencies. These regulations are in a constant state of change. To be an expert resource for employees is a tremendously difficult task. To take the role of the expert on these changing regulations creates a business risk that is unnecessary.
Management should look for ways to outsource activities which are outside the company’s in-house expertise. When a company recognizes internal business processes are being done, which are not part of the core business, alternatives should be considered for improved efficiency.
The core business is that which supports the company’s reputation. It is how the company is known and recognized within the market it participates. The core business establishes the primary activities that a company focuses through its in-house expertise. When new employees are hired, the skills pursued are those that will support the core business. In addition to determining the skills and expertise of its employees, the core business will often times establish the entire culture within the organization. The culture will naturally develop from the people who have the required skills to perform the core business activities.
A business should outsource those activities that are not within the realm of the core business. However, a small business can sometimes find itself performing activities that are not within their area of expertise. This situation can occur because there is so much to do and so little time to do it all. Even though there may be recognition by upper management that activities are happening which are not part of the normal business, decisions are not made to take the steps to outsource those activities.
As long as a company stays focused on its core business, the business will run efficiently and more cost effectively.
The desire for general self-service did not start in this millennium. The first vending machine was actually made in the late 1800’s, soon followed by self-service gas pumps in the early 1900’s. Although quickly getting candy and fuel was good, easy access to information was the ultimate desire. Nothing would be more valuable to us than easy access to our personal information.
Large amounts of employee data began to be collected in the 1970’s and stored in large computer mainframes. The computer room, in those days, was labeled ‘the glass house’ because many businesses built their computer rooms within a glass enclosure. You could see the computer, but you could not get in to touch it. Access was strictly restricted, as was your personal information the computer contained.
When the Internet became available to the average person in the 1980s, we were given access to public information never before imagined. In the 1990’s, we saw Internet services start-up such as Amazon, eBay and Google to name only a few of the ground-breakers. By the 2000’s, businesses recognized the need to unlock the personal information they were holding in their computers. Businesses began to deploy online services for their employees with access allowed through account names and passwords; enabling the employee to have immediate access to their own personal information.