Payroll: To Outsource or Not That is the Question

A recent article from Business Week presents a fair description of the pros and cons of outsourcing. Our advisors at First Place Employer Services wanted to share our thoughts on the benefits of outsourcing.

For small to medium businesses, an in-house payroll service can be a costly overhead. If you consider the number of hours employees devote to payroll-related activities, along with production costs such as printing and distributing checks and creating tax documents, final costs can mount up. Compared to plans offered by payroll-service providers, it is easy to see why an increasing number of companies are choosing to outsource its payroll.

Fact:Payroll management is a time-consuming activity. By outsourcing this responsibility the administrative burden is removed, allowing employees more time to focus on being more productive on the core business.

Fact:Payroll mistakes can be costly for a company. Outsourcing your payroll will give you peace of mind knowing that every aspect of your payroll is being taken care of by professionals with very high accuracy.

Fact:In-house payroll activities function as reliably as the people doing the work meaning annual leave and sick days can affect productivity.

With a payroll service, output speed and quality will be constant as a trained professional will always be on hand. It will also save time on helping new hires understand the business’s payroll system.

Fact:Since payroll-services providers are specialists with vast technical resources at their disposal, they can process even the most complex payrolls to your satisfaction.

A good payroll-services provider will know all the ins and outs of payroll-related tax laws and regulatory mandates on the federal, state and local levels. Many companies have a generalist on staff and do not employ the skill set to understand the ever changing rules and regulations behind governmental regulations.

This compliance is the value propisition behind outsourcing your payroll. If pay checks are delayed or paperwork is mishandled, it’s the payroll-services provider’s responsibility to fix things.

With a professional client-centric like First Place Employer Services on your team; You can switch to another service provider in a snap – even if you have to absorb a portion of an existing service contract. Try firing, hiring and training in-house payroll staff in anything less than several weeks.

Boring, repetitive payroll work can act like an anchor on your business. Your staff, when freed of payroll responsibilities, will be free to focus on other, more creative work.

Do you have the time and energy to closely supervise your business’s payroll for time and rate abuse? Most payroll services firms have technologies that can spot and alert clients to various types of payroll abnormalities.


There’s a lot to be said for the peace of mind that outsourcing payroll services can bring to a business owner or manager. No headaches, no hassles: You’re left to focus on running a profitable business.