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How payroll outsourcing works

Payroll is one of the vital parts of every business. One of its primary functions is to ensure that all your employees are paid correctly and on time. 

When your business is growing, this also means hiring more employees to support your daily operations. As your in-house staff continues to multiply, it may be the right time to evaluate your workforce needs. This is where payroll outsourcing usually comes into play.  

Farming out your payroll processes can be pretty challenging. This is why you must weigh the pros and cons of payroll outsourcing before making any decision. 

Payroll outsourcing functions 

In terms of payroll functions that can be outsourced, payroll outsourcing providers typically offer payroll solutions according to each client’s needs. 

Payroll outsourcing services often include the following: 

  • Payroll tax filing 
  • Payroll and custom reporting 
  • Issuing employee salary checks or depositing funds directly to employees’ accounts
  • Employee record-keeping 
  • Pension, medical, and social security contributions 

Organizations that acquire payroll outsourcing services usually lack resources both in the workforce and technology to handle their payroll effectively. 

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Payroll outsourcing functions

Payroll outsourcing pros

Just like any form of outsourcing, contracting out your payroll can bring you tons of advantages, including the following: 


One of the major perks of payroll outsourcing is its cost-effectiveness. Through this strategy, companies can save up to 60% on overhead costs!

Access to payroll experts

Outsourcing providers always have dedicated teams ready to take on new clients. Apart from having various experiences from working for clients in different industries, they also undergo continuous training to enhance their skills and knowledge. With payroll outsourcing, you won’t need to worry about hiring and training your staff, as your BPO partner will do all that for you.

Access to top-notch technology

A good outsourcing provider is always up-to-date with the newest technology. Your cloud staff or remote team will not only be equipped with their industry expertise – they’ll also have access to top-notch technology to complement their skills.

Overall, tapping into these benefits will help you augment your payroll processes. 

Payroll outsourcing cons 

But of course, there are also downsides to payroll outsourcing that you should be aware of: 

Security risks

When you outsource your payroll, you will also need to share your employees’ private information, as well as your company. 

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This is perhaps among the few reasons why some companies are hesitant to outsource as there is always a risk in sharing confidential information with a third party. Despite this, do note that BPO firms are equipped with the latest technology and the best cybersecurity measures. While security risks are a concern, this is not a problem once you’re partnered with a trusted cloud staffing firm.

Loss of control

Payroll outsourcing involves handing over particular payroll roles and tasks to a third party. In many cases, this may lead to a loss of control, and some businesses are not comfortable with this arrangement.

What these leaders may not know is that outsourcing allows business owners to be as involved as they want with the delegated process. They can train and manage their cloud staff directly, or they can let their BPO partner manage this process.

Payroll outsourcing cons

Why hire a cloud staff to manage your payroll? 

Payroll outsourcing providers like Cloudstaff fully understand how crucial data security is to all organizations. Cloud Staff adheres to ISO 9001 standard for quality assurance. 

Hiring a cloud staff to manage your payroll allows you to fully leverage seasoned experts while tapping into the latest tech innovations. 

Contact Cloud Staff today to know more about their services! 

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About OA

Outsource Accelerator is the trusted source of independent information, advisory and expert implementation of Business Process Outsourcing (BPO).

The #1 outsourcing authority

Outsource Accelerator offers the world’s leading aggregator marketplace for outsourcing. It specifically provides the conduit between world-leading outsourcing suppliers and the businesses – clients – across the globe.

The Outsource Accelerator website has over 5,000 articles, 450+ podcast episodes, and a comprehensive directory with 3,900+ BPO companies… all designed to make it easier for clients to learn about – and engage with – outsourcing.

About Derek Gallimore

Derek Gallimore has been in business for 20 years, outsourcing for over eight years, and has been living in Manila (the heart of global outsourcing) since 2014. Derek is the founder and CEO of Outsource Accelerator, and is regarded as a leading expert on all things outsourcing.

“Excellent service for outsourcing advice and expertise for my business.”

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