The entire ecosystem of market is emerging rapidly. Pattern of businesses has changed as they focus on strategic decisions more than investing time in performing tasks which can be outsourced. Payroll outsourcing is one of them. Outsourcing payroll activities not only saves time but gives you better scope to work on better business forecasting and new strategies to expand the business.
Defining payroll outsourcing: Payroll outsourcing is a process in which organization use the services of third party to take care of its complete payroll functions such as such as processing employee salaries, managing tax deductions, generating form 16, attendance and leave management, payroll related reports, full and final settlements, and compliance management-PF/P.TAX. /ESIS/Taxation returns filing are some of the services provided under payroll outsourcing.
The year 2020 is near to end and the field of payroll outsourcing has seen visible growth over the years. Organizations have understood the value of time, money and resources they can save by outsourcing the payroll activities.
As per a recent study conducted, payroll outsourcing will touch an enormous growth by the year 2025. This growth is because of forecasting the pattern on which businesses are going to run. Managing employees and various issues associated with the inhouse payroll management are the major reasons entrepreneurs are evolving rapidly.
Payroll processes powered by artificial intelligence (AI) is a dream for HR professionals. In near future, association of payroll and artificial intelligence will produce a system that automatically flags anomalies in time tracking, finds patterns in employee absences, generates smart audits that can spot potential problems, and recommend steps for better compliance. It will allow companies to make more smart decisions in no time. The AI (Artificial Intelligence) driven payroll systems will identify payroll inconsistencies and gaps using algorithms that rely upon historical data and not just the expertise and judgment of payroll analysts.
Cloud based HR software makes the HR and Payroll smooth. The systems have now become more secured, active and extremely flexible for organizations. During the old days, HR and Payroll cloud-based solutions were rigid, but now, the systems are highly interactive and open for customized solutions as per organizational needs and work processes.
SMEs are partnering extensively with HR and payroll outsourcing service providers to take care of their challenging issues related to workforce, payroll management, and compliance. Easier access to the system, security of data, and ease of use as the three main reasons which make cloud-based payroll outsourcing profitable to them. For SME’s, payroll outsourcing is the solution as it gives to benefits of compliance management, streamlining payroll functions and maintaining confidentiality and transparency.
A start-up creator has to focus on core business functions and profit-making strategies. Performing too many tasks like monitoring inhouse payroll activities not only hampers productivity but also leads to wearing down early in the process.
It is found that one in three start-ups are penalized for non-compliance of regulatory procedures related to taxation or labour statutes making the founder directly liable.
India has the second highest number of start-ups after the USA but 90% of them perish due to cash running out in the initial years of inception. Saving costs and focusing on revenue-generating activities is a priority for start-ups in the initial years. Outsourcing non-core functions like payroll is no longer an option but a survival tactic for start-ups in the coming years.
CONCLUSION: As organizations have become aware about the importance of HR and payroll management and the need of seamless process. An increase in demand of outsourcing payroll are foreseen in coming years. Payroll outsourcing in India will not only bring changes in organizations work culture but will directly contribute to the growth of businesses. Indian payroll outsourcing is all set to blend in organization’s daily work culture and become an integral part of their process. It will gain same importance which any other investment has in a business.