3 Big Reasons for Expert Payroll Outsourcing Companies

Payroll Outsourcing Companies

“Do what you do best, and outsource the rest.” – Peter Drucker

Though born in the early 1900’s, we know management consultant and professor Peter Drucker as the father of modern management. Drucker believed individuals and their knowledge to be a company’s most important assets. Yet, he also knew how to streamline processes. And, this often meant outsourcing critical functions, which Drucker promoted as early as 1989 in a Wall Street Journal article. He said, “If clerical, maintenance and support work is done by an outside independent contractor, it can offer opportunities, respect, and visibility.”

In the event and experiential marketing industry, agencies and brands often want to hire their own field teams and manage them directly. This is especially common in the case of market and field managers. However, in directly hiring field staff, especially on a nationwide basis, there are many challenges and considerations. In addition to offering in-house payroll, other HR issues such as benefits, compliance, insurance, employee classification, and more can be daunting. And if done incorrectly, can open a company to additional costs and even legal liabilities. Hiring HR and payroll outsourcing companies to Experiential Employee Management (EEM) services for event teams can achieve Drucker’s benefits.

The ABCs of Payroll Outsourcing Companies and EEM Partnerships

The role of a payroll partner or experiential employee management provider is more complex than just processing checks. First, teams must be hired in a way that is compliant both with the IRS and on a state-by-state basis. In event marketing, the risk of employee misclassification is high when it relates to these on-demand employees. And when executing across the country, it is important to be extremely well-versed in employment laws as it relates to each and every state. Healthcare laws and other federal employment regulation must also be considered.

Once staff are onboarded, much detail goes into managing the payroll and benefits process every single pay period. For some companies, this is weekly, bi-weekly or otherwise. Wages are calculated, including overtime pay where applicable. HR teams must manage withholdings, such as taxes, insurance, 401K contributions and more. And, since these on-demand employees can come and go, teams must keep details for each person up-to-date. It is a challenging job that requires immense resources. But, what does it contribute to your bottom line? Many companies find here is no direct correlation. So, is managing this task internally worthwhile?

Payroll outsourcing companies can remove these HR burdens. And an experiential employee management partnership can allow for better use of your resources. This was Drucker’s primary argument for outsourcing. The offloading of “back room activities” lets organizations focus on their core competencies. He told Forbes, “Never try to be an expert if you are not. Build on your strengths and find strong people to do the other necessary tasks.” In doing so, you can reallocate HR and payroll resources to areas impacting your bottom line. And, lucky for businesses, outsourcing can produce several other great benefits.

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3 Smart Reasons to Outsource 

Your business may have been holding on to payroll and HR out of habit, or fear of information sharing. You might perceive costs to be higher with outsourcing, but are now considering its potential value. Or, your organization may have growing pains and need to offload some of its clerical burdens. It doesn’t matter your reason for contemplating payroll outsourcing companies or experiential employee management. You’ll find appeal in one of these three benefits.

1. Reduced Costs.

Many businesses believe experiential employee management services or payroll outsourcing companies to be out of their budget. Yet, consider the cost of in-house management. Maintaining an HR team and paying the salaries for an HR manager, payroll processor, payroll administrator, and more, is expensive. Especially if your event needs can vary, take place in different states, and/or payrolls can be complex.

Other related expenses include software and maintenance, HR team training, and supplies. Expenses continue to add up as you consider office space, data security/privacy, expertise in employment law (critical when hiring field teams), and more. In comparison, experiential employee management services can be more cost effective.

Payroll outsourcing companies allow you to not only reallocate resources to core business, but provide you with more money to spend, too.

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2. Diminished Risk.

On the topic of privacy, one might expect corporations and personnel to place a high importance on information security. This is especially true with cyber attacks becoming more common. Yet, when surveyed by Ponemon Institute, 71% of employees report having “too much access to confidential corporate data.” Further, the study actually finds employees to be the cause of data leakage. That’s right; the majority of end users (64%) and IT personnel (59%) believe “insiders” to be the “most likely” culprit. And, when you consider the sensitivity of HR and payroll information, this is cause for great concern. 

[Tweet “Do HR and payroll tasks contribute to your company’s core competencies? If not, outsource.”]

Both employee personal information, social security numbers, corporate bank details, and more, are at stake. Partnering with a payroll outsourcing company gives fewer people access. An experiential employee management provider can better secure the integrity of this information.

Next is government regulations. These are ever-changing, whether for taxes, employee classification, mandatory sick leave, healthcare, and more. When rules are missed or taxes are processed incorrectly, your business may incur fines and penalties that cut deeply into revenue. And, Accounting Today reports, the risk high. The IRS is “paying a lot more attention to employment tax issues and pursuing penalties with a diligence” not seen before. Payroll outsourcing companies stay abreast of new guidelines to ensure your legal compliance.

3. Increased Capabilities.

Experiential employee management providers and payroll outsourcing companies should be able to offer you a technology platform that would have required immense investment if adopted internally. This lends to your abilities to conduct business and maintain employee satisfaction. Through their platform, you can view payments, update personnel information, track paid time off and more. It can also supply comprehensive reports.

Payroll outsourcing companies can lift other burdens with automation. These might include digital check signatures and direct deposit. Yet, for printed checks and W-2 forms, their printing and mailing services will save you time. All these functions deliver Drucker’s benefits. And, they provide greater visibility into operations.

[Tweet “Employees report too much access to confidential corporate info. This may put payroll data at risk.”]

And while payroll outsourcing may assist you in other business areas, if you want comprehensive service that extends to HR, you are looking for experiential employee management. These services can include on-boarding and off-boarding, insurance, managing benefits and more. With experiential employee management, you have the resources to better pursue revenue opportunities and gain the eye and respect of your customers.

As an experiential employee management service provider, EPS can remove your HR and payroll burden, providing critical tasks that reduce your team’s time and financial investment. Our expertise ensures your employment-related risks are mitigated. We can also help you find the right people for your project! Click below for a customized proposal. 

 

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About JESSICA STACKPOOLE

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