Outsourcing Payroll
The size of a company, type of organization, the profitability, the services and/or products being sold, all involve employees that need to be paid, consistently. Over time, more and more legislations are being passed with a trend showing it will only continue in the future causing the process of payroll to become more difficult (Alter, 25) The process of paying individuals is becoming something that involves multiple employees within a human resource department to ensure the delivery, consistency, and accuracy from the different payrolls between employees. Besides the legislations what becomes difficult for the human resource department from many different aspects is the different payment plans between employees, which makes the accuracy extremely important when focusing on payroll for employees. As the years have gone on, it has become more popular to outsource certain areas of a business to third parties that are specialized. Outsourcing payroll activities is the beginning process of a human resource management transformation to bring the human resource department of a company to the next level. Payroll can be considered the most important aspect of human resource and also the most difficult. The process involves taking transactional activities away from the current human resource managers and sending it to those specialized third party. Since the outsourced company would be considered a human resource business partner a main concern will be the trust between the companies including the many employees that will have their information shared with the trusted business partner. This will allow the human resource department to have more time to focus on more real strategic human resource activities that will better the company. The human resource department becomes more effective from the complete transformation and will save the company money due to the reduction of members in the human resource group. Every management team ultimately wants to increase profits