Did you know that businesses that don’t outsource functions like payroll or HR spend 20% more money than businesses that do outsource? In the HR department of your organization, there is a multitude of processes related to payroll, employee management, hiring, retention, training, and whatnot. In between all these activities, there’s ideally no room for mistakes because you absolutely need to get everything right. However, in small and medium enterprises this is rarely the case because the team is so overburdened that they end up making mistakes. For this reason, outsourcing the HR function is emerging as an optimum solution. Keeping this in mind, we have discussed everything from payroll outsourcing trends to benefits in this article. Keep reading to gain some insights.

Key Signs You Need To Think About Outsourcing the HR Function

If you are not sure whether you need to outsource your HR or not, then read on. We have identified some factors, check out:

Sudden Growth

It is a common belief that a business that is growing is also succeeding in every business department.

But, stop right there before you start celebrating.

Understand that your excitement is because you are growing your core business functions, which means more employees and resources. This clearly means more responsibility for your HR department. They now need to manage a higher number of people. They now need to manually calculate the payroll of more employees.

To reduce the burden, outsource your HR and remove any hindrance from your growth.

Failure To Adapt To Changes

Many businesses simply fail to adopt new law changes. While they check and follow new laws, they don’t understand how to operate with this law. As a result, mistakes are made.

A better – more effective – solution would be to considering outsourcing the HR function. With the experience of the provider, you will receive the knowledge to follow any modified law or regulation.

Poor Cost Management

Whether you are a big, small, or medium organization, you need to save your money. You can’t keep spending recklessly just to regret it later.

Fortunately, the best way to save your money or to optimize your budget is to outsource your HR. This will help you:

      • Avoid buying new tech
      • Avoid errors
      • Avoid data security mistakes
      • Meet deadlines

Missed Deadlines

As your company grows, you have more responsibilities to take care of. Even your core business function expands, which requires more hands on deck. In the middle of this, it is not really difficult to miss deadlines – miss payroll dispatch date.

If you delay payroll for one month, then your employees might understand. However, consistently making it a habit will only lead to high turnover.

Benefits of Outsourcing the HR Function

Before you check out the future of outsourcing and trends in HR outsourcing, let’s explore its benefits. The decision of outsourcing the HR function is packed with so many benefits that you will immediately start looking for an HR solution after reading this section. Our suggestion would be to check out Paysquare’s website to get optimum payroll outsourcing services.


As already discussed multiple times throughout this article, outsourcing the HR function is cost-effective.

The simplest reason behind this is that you don’t need to hire and manage extra HR resources. You can have just one person to look after the entire management and employee engagement, the payroll is entirely taken care of by the outsourcing provider.


Apart from cost-effectiveness, outsourcing the HR function keeps your data secure. The HR department saves the data of your employees. This is sensitive data that should not be leaked. In-house this data can be stolen, lost, or attacked by viruses and malware.

However, when you outsource your HR, you are able to secure your data. The outsourcing service provider has better tech and security structure to secure your data. They are better equipped for the given task.


More than anything else, we need people who have experience.

When you need to follow compliance, you need skills and experience.

When you need to follow a new tax rule, you need experience and expertise in the area.

When you need to resolve inaccuracies in the payroll, you need experience.

Most of the HR activities require experience, which comes with an outsourcing partner. They have the skills and expertise to accurately execute everything and still dispatch your payroll on time.

When you are stuck at some payroll processing or on a functioning question, you can easily draw upon this experience and resolve your issues.

Future of Payroll Outsourcing

The reason we are discussing the future of payroll outsourcing before payroll outsourcing trends is that the pandemic has changed a lot. Since the onset of the COVID-19 disease, it is spreading to every country and impacting the working pattern of each business. There’s no exception in this case – quite literally.

The HR department is struggling a bit more than other departments because remote working is making engagement and employee management harder. This means that your HR already has hands full and they need support in payroll. For this reason, we are currently observing a rise in payroll outsourcing, which is leading to many trends in HR outsourcing.

Trends in HR Outsourcing

Payroll outsourcing has a market size of around USD 4.8 billion. Of course, there are trends in HR outsourcing, which we are going to discuss in this section. Many outsourcing providers are already adopting these trends but you need to know the details to make the right decision. So, keep reading:

Automated Service

One of the widely known payroll outsourcing trends is automated service.

Why are you still struggling with spreadsheets?

Are you not able to calculate the accurate salary of an employee because your spreadsheet has discrepancies?

With spreadsheets, you need to spend a lot of time on payroll. We live in the world of automation, where the attendance data should directly flow into your tech or software, which should help you prepare payroll automatically with minimal supervision.

This is easily possible with outsourced HR services.

Employee Self Service Portal

Other than automation of the payroll functions, another trend in HR outsourcing is the ESS portal. Almost every outsourcing provider will help with an employee self-service portal.

This portal is designed to help your employees access their records and payroll details.

      • Leave management
      • Holiday calendar
      • Payslip downloading
      • Paid and unpaid leave record
      • Bifurcation of the payroll

These are simple HR questions that your HR team should not have to answer. The ESS portal is designed to make the task easier for both your HR team as well as employees. Without this portal, your employees would struggle to get data out of the HR department. The pipeline will further increase with the outsourcing provider in the picture.

Cloud-Based Execution

The trend of cloud is simply unbeatable. It is everywhere, in every department and every industry.

You can’t surpass this in HR outsourcing as well.

Many providers are now offering cloud-based payroll execution. You just need to utilize the cloud-based solution to login to your payroll software and access data securely. From transparency to the cost of management, everything is streamlined in cloud-based payroll management.

Cost Reduction

Lastly, we already know that outsourcing the HR function is cost-effective. With the payroll outsourcing trends that we just discussed above, we can reduce the cost even more. You can receive these services at better pricing and low hassle.

In a few years, both the cost-effectiveness and hassle-free functioning of outsourcing will definitely surpass every other way of managing payroll.

Is Payroll Outsourcing a Long-Term Solution?

Many companies worry about whether payroll outsourcing is a long-term solution or not. In reality, it depends on your organization and the outsourcing provider you select. If you choose someone with experience and resources, you will keep getting optimum services even when the market changes and the verticals inside your organization modify.

However, if you select a provider with less industry experience, then you may get stuck when your team is too large for them to handle. Hence, if you are expecting an outsourced solution to be a long-term solution, then choose your outsourcing provider appropriately. For example, Paysquare is an outsourcing provider with decades of experience. They have just the right skills to handle unforeseen situations. In Paysquare, you can find a perfect partner for your growth.


Outsourcing the HR function is a growing trend in every industry. To reduce the burden that COVID-19 has created, many organizations are considering outsourcing some functions for better accuracy. But, before you move on with this decision, it is necessary to check the growing trends in HR outsourcing. It will help you choose the right outsourcing provider for your business. Hence, go through the above data, understand payroll outsourcing trends that seem relevant for your organization, and reach out to Paysquare. Outsource your HR today and receive hassle-free services every month.

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