7 Benefits of Outsourcing Your Payroll and Benefit Administration

ByContent Manager
Nationwide HR services

There’s no denying that more and more companies are discovering the benefits of outsourcing payroll and benefits administration. There has been a sharp increase in these third-party services in recent years.

The benefits to expect when outsourcing payroll and benefits administration include:

  1. Reduced costs: This is arguably the biggest benefit any company receives when outsourcing these HR functions. The reality is that even though many companies think that contracting with an external provider is cost-prohibitive, many small- and mid-sized companies cannot afford to have a full-time HR expert responsible for the myriad of growing HR tasks and responsibilities. Therefore, when they contract with a nationwide HR service provider, they can expect it to cost less in the long run. Additionally, by using a nationwide HR outsourcing and consulting firm, a company can significantly reduce the risk of compliance violations, which in turn can save a lot of money on both a short and long-term basis. These violations can be experienced as fines with local, state, and federal agencies or manifest into sizable and costly lawsuits or class action claims.
  2. More benefit options: Another major hurdle for smaller organizations is providing competitive benefits packages to employees. Often, signing up for benefits alone means you have limited options since your organization is small and cannot benefit from economies of scale. When you work with a nationwide HR service provider, you can work with their trusted brokers to access more options, often yielding much better rates. Employers can often offer employees much more sophisticated and enhanced benefits without hiring additional employees to manage them. In many instances, employers that could not previously offer a 401(k) plan can now provide one. In a competitive job market, providing these enhanced benefits can be crucial in attracting and retaining industry talent.
  3. Enhanced compliance: Keeping abreast of all the changing labor laws and regulations can take tremendous effort. But when you contract with a nationwide HR service provider with expertise in different state laws and legislation, you can rest easy knowing that you work with professionals who stay abreast of these changes. This benefit reduces the likelihood that your company could be fined or penalized. It also reduces the risk of tarnishing your brand name for compliance failures.
  4. Minimizing errors: Timekeeping errors are common, and they can drain your company’s resources since it often takes a lot of time and manpower to track down the error and correct it. Payroll providers often automate the tedious and redundant aspects of data entry by leveraging the power of AI and their expertise to minimize costly errors.
  5. Better planning: Third-party HR providers aren’t just companies that can take on the work you need them to; they can also be a long-term partner that helps with strategic planning. When you contract with a nationwide HR services company, you often get access to some of the top professionals in the HR field. They provide key insights that can boost your company’s long-term performance. As the market moves towards greater competition, this benefit can be exactly what you need to stay one step ahead of competitors.
  6. More focus time: Many smaller companies understand they can’t afford a full-time HR professional, so they tap into anyone they can for payroll and benefits administration functions. Often, this means that it ends up on the owner’s desk. And while most owners will do anything that needs to be done for their company, taking on HR tasks takes time away from actually running and growing the business. It also drastically increases the risk of mistakes and non-compliance. When you contract with nationwide HR service providers, you can free up your time and be sure you use it on activities that will keep your company poised for long-term success.

There are many benefits to working with an external outsourcing and consulting firm for payroll function and benefits administration. To learn more about the benefits of working with a nationwide HR firm, contact CA HR Services today!

CA HR Services specializes in working with small and medium-sized companies to help develop legal, efficient, and appropriate HR processes and procedures that meet state and federal labor law requirements.