To outsource the employee payroll is an important business decision. It involves delegating the preparation and communication of payrolls to a third party outside the company. As well as the management of the payment of these to the workers for their services rendered. According to the legal and sectorial regulations in force, and according to their respective employment contracts. This also involves the use of confidential employee data, such as bank details or personal data.
With its advantages and some disadvantages, which we will develop in this article. And that is seen differently, even depending on the size of the company or its vital moment.
It is true that, if we speak purely in terms of efficiency, companies are increasingly focusing their employees on their core business and on high value-added tasks. However, costs and benefits must be taken into account, both in terms of time and money. And very importantly, in terms of security.
Why should we outsource employee payroll?
Cost optimization is one of the main objectives of any company. Outsourcing payroll makes the Human Resources Department more profitable.
By doing so, the company focuses its work and strengthens the strategic competencies of the human resources area. Human capital is, undoubtedly, one of the most valuable assets for a company and therefore, with an adequate outsource of the labor area, it will be possible to obtain security, peace of mind and profitability of the personnel that make up the company.
Benefits of outsourcing the employee payroll
The following advantages can be obtained.
Security and guarantee in legal matters
We comply with current legislation without effort. It is the outsourced company that constantly analyzes and updates the legal regulations and their changes.
Therefore, conflicts with Social Security and other social organizations due to errors are reduced to a minimum. Delays in the payment of social insurances imply surcharges of 20%, for example.
It is important to work with a company that, before hiring, advises you on the profile of the employee and the most beneficial type of contract. As well as the conversion of any of the current contracts.
Or also, when it is necessary to dismiss an employee, it is necessary to have professionals to advise and assist you before the Labor Inspection, in the SMAC (Mediation, Arbitration and Conciliation Service).
And something more complicated and that can become key to the survival of the company itself at a given time. To carry out an Employment Regulation Expedient (ERE or ERTE).
In all these cases it is essential to have a team experienced in the subject to manage it optimally.
Risk reduction
Legal, operational and technological risks for the company, with a specialized and continuous service, establishing constant communication with specialists in the field.
Substitution of fixed costs for variable costs
By not having a dedicated staff in the HR department itself, these expenses are reduced. And the cost will depend on the number of payrolls at the time. No labor cost burdens or unnecessary commitments.
Outsourcing allows you to reduce costs and better control the overall budget by including only external costs.
Saving time and money
For the previously highlighted reason of legal updates, outsourcing employee payroll will save the company time and money. Especially when it comes to training and recruitment.
The company will only deal with a simplified interface in addition to its dedicated contact person.
Simplification of processes
In the calculation and regularization of the % of IRPF of the workers, and the presentation of the models of Treasury and Social Security such as 111 and 190, etc.
But, in addition, it allows us to take advantage of all the possible bonuses and reductions to the Social Security.
At the time of dismissal of employees or conciliations, it is necessary to have professionals to advise and assist you in Labor Inspections, as well as the SMAC (Mediation, Arbitration and Conciliation Service).
And above all, when you need to carry out an Employment Regulation Expedient (EREs), or salary reduction … it is essential to have a team experienced in the subject that manages it in an optimal way.
Possible disadvantages
As far as disadvantages are concerned, we can highlight the following:
It is clear that outsourcing employee payroll involves delegating one of the company’s key processes to a third party outside the company. For this reason, it is essential to hire a reliable technological expert with proven experience.
In addition, it involves the use and therefore the transfer of confidential employee data. Such as bank details or personal data. Which may pose a risk in the treatment of these data.
In conclusion, perhaps in other times payroll management was a more or less simple or mechanical process. Now technological advances are increasingly favoring the interconnection between companies and the Administration. And this is something that will increase over time.
This sometimes requires considerable investment in increasingly sophisticated software and the corresponding training.
On the other hand, it is necessary to constantly update legislation and labor regulations, which requires certain specialized knowledge.
And as we have already said, to outsource the employee payroll, it does not depend on the size of the company. All this is valid for the self-employed, entrepreneurs, SMEs and large companies.
