1. SME Business Outsourcing
ADP Insider
SME business outsourcing - what you need to
consider.
September 30, 2014 - by ADP Insider
The number of businesses that are making the
switch to outsourcing in Australia is increasing.
Small to medium sized businesses (SMEs)
in particular can gain the greatest benefits,
according to the Australian Payroll Association’s
Payroll Benchmarking Survey, 2014.
Complying to changing legislation, increasing
costs and risk associated with payroll processing
are some of the main reasons why SMEs switch
to outsourcing their payroll. Although every
business’ needs are different, it’s important
to consider the benefits and challenges of
outsourcing payroll which can affect each
enterprise differently.
1. Cost
ADP Research has shown that smaller
businesses and larger corporations, in particular,
experience the greatest cost benefits when it
comes to outsourcing. For a small business,
this is often due to lack of a dedicated resource
- unlike a mid-sized company where there is
often in-house expertise. And according to
the Australian Payroll Association’s survey,
for businesses with less than 200 employees,
processing payroll in-house can cost twice
as much than outsourcing to a third party.
Conversely, large companies tend to outsource
payroll in order to free up their resources, focus
on core activities and streamline processes.
2. Compliance
Legislation in Australia is complex and frequently
changes. Staying on top of these changes is
critical to avoid penalties and unnecessary costs.
For the SMEs with limited resources, this can be
a burdensome and risky task. One of the main
benefits of having a third party supplier manage
your payroll is that it ensures your business
meets any payroll legislation requirements and
changes.
3. Data security and protection
Keeping employee data and information secure
and protected against system risk or disasters
is critical for any business not just small to
medium. Businesses need to ensure that data is
protected with various restricted access levels
and that data can be easily accessible in case of a
system failure or a disaster. Third party suppliers
are generally fully equipped with superior data
protection and disaster recovery protocols as well
as back-up systems and multi-off-site data centre
facilities.
4. Managerial Control
A major concern businesses have with
outsourcing payroll services is losing managerial
control over their payroll function, particularly
with regard to their employees’ confidential
information. Another concern is a third party’s
ability to maintain quality standards, delivery
formats, timing and data integrity that the
business is accustomed to.
5. Customer Service
On time and accurate delivery of wages, flexibility
to make ad-hoc changes and immediate response
to employee queries are critical to employers.
Small to medium businesses often perceive that
by outsourcing, they lose control of these aspects.
There are other factors that also need to be
considered:
The best-fit model
Regardless of whether you decide to keep your
payroll in-house or outsource, there are many
options to cater for different business needs.
Software-as-a-service (SaaS) is a way of providing
software that makes applications available over
the internet, typically using a web browser which
removes the need to install and maintain software
locally. In a SaaS model, the supplier manages
access, security, availability and performance
which reduce the need to purchase hardware or
software.
With Managed Services, the third party supplier
manages the whole payroll process from start
to finish. This model can minimise business
risks, relieve organisations of any legislative and
compliance concerns, and is suitable for any
businesses needing expert assistance.
The ADP Logo and ADP are registered trademarks of ADP, LLC. ©2015 ADP, LLC.
"Complying to changing legislation,
increasing costs and risk associated
with payroll processing are some of
the main reasons why SMEs switch
to outsourcing their payroll."
ADP Insider
What you need to consider

2. SME Business Outsourcing
Would you like more information?
For further information relating to our products, please contact our team on:
Phone: 1800 000 729 Fax: 1800 880 729 Email: information@au.adp.com
Partnering with the most suitable provider
Choosing a payroll provider when outsourching
depends on many factors such as: expertise –
product and local market, understanding of your
business’ needs, breadth and flexibility of offering,
superior levels of customer service, financial
viability and the right culture fit for your business.
Large providers often have the breadth of service,
product coverage and flexibility to match varying
needs that can support businesses at different
stages of the business cycle. Smaller providers,
on the other hand often specialise in niche
markets.
Case for outsourcing payroll
While businesses face many options when
implementing a payroll process, it’s important to
consider these factors. And although businesses
of all sizes can benefit from an outsourcing
solution, the benefits for small and mid-sized
businesses are the greatest.
It is important to remember that researching and
choosing an appropriate method of outsourcing is
essential. Outsourcing can enable your business
to remain legally compliant, provide your business
with further cost savings as well as help ensure
stability within your business.
See more at: www.adppayroll.com.au/adpinsider
The ADP Logo and ADP are registered trademarks of ADP, LLC. ©2015 ADP,