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Payroll Outsourcing: Why Don’t HR and Payroll Professionals Outsource Payroll?

Industry Trends

07 December, 2022

Payroll Outsourcing: Why Don’t HR and Payroll Professionals Outsource Payroll?

Michael Kammer

Michael Kammer

Content Marketing Expert

As we gear up to enter 2023, the benefits of HR and payroll outsourcing are simply too numerous and obvious to ignore.

The evidence is overwhelming that allowing an external provider to manage payroll simplifies legislative compliance. It also relieves staff from massive administrative burdens. 

That’s why the size of the HR and payroll outsourcing services market is expected to grow by $6.15 billion by 2025, according to a survey by Technavio. 

Still, not everyone is ready to jump on board the outsourcing bandwagon just yet. There are a variety of factors that make leaders feel the need to put the brakes on the rush to outsource payroll. 

In this post, we’ll take an in-depth look at 3 of the most common myths about outsourcing HR and payroll. We’ll also discover how partnering with the right provider can ease outsourcing anxiety.

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Myth #1: “Outsourcing HR and payroll means a loss of control!”

There is a common perception that it’s not possible to hand over your payroll and HR operations to a third party without limiting control over processes and reducing access to information. It doesn’t have to be the case, however.

Outsourcing your HR and payroll processes actually gives you MORE control of your business management, not less. Not only that, there will always be a place for in-house expertise and responsibilities.

Some best practices to consider in order to have a successful outsourcing relationship and keep control of your business include:

  • Choosing the right outsourcing partner
  • Communicating effectively with that partner and being involved in every process
  • Creating guidelines that help your partner perform to your expectations

Follow these practices, and you’ll be able to enjoy the best of both worlds – the freedom of having payroll and HR-related tasks taken off your plate as well as control over your processes when you need it.

Myth #2: “Outsourcing HR and payroll will threaten the security of my data!”

For some businesses, granting access to the kind of sensitive employee data needed to run HR and payroll processes will always conjure fears of data breaches and the legal nightmares that come with them. 

It’s understandable – in business and in life, allowing others into our “circle of trust” can be difficult!

The key to maintaining the security of your HR and payroll data (and your peace of mind) is establishing rock-solid confidentiality and data protection policies and agreements with your outsourcing partner.

A reputable partner should have their own set of security and confidentiality safeguards and best practices established and ready for your inspection at any time. In addition, you should:

  • Establish clear expectations with your outsourcing partner
  • Understand and review all certifications 
  • Continually review technology and security needs as threats develop and evolve

As always when dealing with an outsourcing partner, the key is open communication. 

If you can add to that an understanding of where HR and payroll data security risks lie and what measures you can take to keep your data safe, you should be able to sleep soundly at night without fear of a data breach.

Myth #3: “Outsourcing HR and payroll will make coordination too complicated!”

Here is where realistic expectations can be of real value. HR and payroll outsourcing is a fantastic problem-solver with real-world benefits, but it’s not magic. 

The truth is that you’ll still need to set time aside to coordinate certain tasks and activities with your HR and payroll partner. 

You’ll also need to provide ongoing support to make sure your partner achieves your desired results. On top of that, it’s a good idea to:

  • Focus on your partner’s reputation and experience
  • Stay on top of changes to regulations and taxes
  • Take time to select the right partner and make sure all aspects of your arrangement with them check out

A solid understanding of outsourcing’s pros and cons, along with accurate information on your existing payroll and HR management costs, can offer valuable guidance when it comes to streamlining cooperation with your HR and payroll outsourcing partner.

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Outsourcing HR and payroll: conclusion

Payroll and HR are the twin fuels of your company’s engine. Factor in the sensitivity of the data involved, and it’s easy to see why decisions about outsourcing HR and payroll should never be taken lightly. 

Everything we do at Symmetrical is geared toward helping you take care of the core of your business – people. That means having an ultimate HR database that stores all employee data and automates all people processes.

It also means replacing cumbersome spreadsheets with a smart, automated, payroll service that fully integrates with all your existing technology and systems.

Symmetrical is the first payroll solution you won’t hate. We enable fast-paced companies to onboard at scale and run their payroll invisibly. To run your payroll hassle-free, contact our experts to learn more!


Technavio study