Outsourcing the mission-critical business of payroll

Ian McAlister, General Manager at CRS Technologies.

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Pressure on payroll administrators is mounting as the ripple effect of increased regulation, a strained economy and a skills shortage spreads throughout the labour market.

These payroll professionals are much more than mere pencil-pushing number-crunchers. Without consistent meticulous attention to detail, a business’s payroll will implode and potentially cripple the operation. But competent, experienced payroll administrators are not easy to find and not every business operator is fortunate to have a permanent skills resource readily available. This is why BPO or business process outsourcing is growing in popularity.

Human capital management specialist CRS Technologies says the option to appoint an outsourced payroll services provider to manage this business discipline has become more attractive.

“This is because an experienced BPO payroll services provider offers up several benefits for businesses, most notably improved efficiency, reduced operating expenses and less risk,” says Ian McAlister, General Manager, CRS Technologies.

But before a company can begin to benefit, it is important that leaders understand the fundamentals of BPO.

There are two types of BPO – front office and back office. Front office outsourcing focuses on activities that are external to the company, such as marketing and customer service, while back office BPO is all about the internal facets of the business, such as payroll and human resources. 

Businessprocessincubator.com notes that payroll outsourcing generally includes a range of activities associated with payroll management, including generating payroll reports, calculating employee salaries and ensuring compliance with tax laws.

BPO originated with large manufacturing companies needing assistance with supply chain management, but it soon grew to include all sorts of sectors, including services companies.

Today, an extensive range of technical and non-technical services can be outsourced to a third-party vendor, and businesses of all types and sizes, across all industries, make use of BPO.

McAlister says it makes sense because a challenging economic environment and the need to do more with less is forcing decision-makers to become more agile, more inventive, innovative and explore markets they would otherwise most likely overlook or side-step.

“So global expansion, improving efficiencies and maintaining flexibility are identified as top benefits,” says McAlister.

CRS Technologies says it is very important for businesses to tread with caution and take the necessary time and effort in selecting the right partner.

“There are a few reasons for this,” says McAlister, “but the main one is that by investing in BPO, your company is essentially entrusting data, internal systems and the blueprint of the operation to a third party. Taking this into consideration, it is incredibly important that any prospective outsource service provider has experience, as well as knowledge of software, regulations, and payroll administration processes and procedures. They have to demonstrate a level of proficiency and technical understanding to be considered.”

CRS Technologies says aside from the obvious risk to a business’s reputation and the financial cost that mistakes in payroll cause, the most critical consideration is the protection of data.

Moore-Southafrica.com lists the need to keep payroll data secure and confidential as a top priority.

McAlister adds: “While there is no doubt that outsourcing payroll saves time, enables businesses to focus on their core strengths, and boosts efficiency – and gives managers peace of mind that regulations like POPIA and GDPR are complied with – company data in the wrong hands can be catastrophic. The best way to minimise risk and maintain security, but also score with BPO, is to partner with the right outfit. Ask about software knowledge, about documents, how much support the outsource provider is willing to offer and system integration.”

CRS Technologies explains that BPO is a growing trend and with the amount of boxes that payroll administrators need to tick these days, it makes good business sense to take on the services of a reputable, established provider.