In House Payroll or Outsourcing Payroll - Essay Example

The identifying of two alternatives for pay roll administering was done and the recommendations for picking up one were done according to the needs of the management of NB enterprises. Recommendations were made keeping in view the size of the NB enterprises. The requirements for the option chosen were also mentioned with time bound plan to execute the decision taken. What is Pay roll: Payroll can be termed as a list of employees who receive regular pay from the organization. It is a system through which the employees of an organization are paid.

The salary structure, schedules of tax, benefits, allowances, pay frequency and pay dates are the internal parts of the payroll structure If the system is computerized it can be understood as the process that was used by a company to process and pay the salaries of the workers and employees. 1 Identification of two alternatives for maintaining the pay rolls: The pay roll administration can be done in two different ways. First one is to have a payroll Unit in the company which administers over the payments of the employees and prepares the lists regarding the pays and advances.

The other method is to outsource all the activities regarding the payments and advances of the employees to company which offers computerised pay roll administration. The outsourcing company renders the needed services as a final output, which depends on the information supplied by the company. According to Vanessa Robinson1 a resourcing adviser, the outsourcing of Pay rolls will give more time to HR personnel to concentrate more on the strategic roles that increase or enhance the performance of the organisation.

Some of the advantages are listed as follows:1. It may reduce costs, but the cost benefit must be analysed by cost effectiveness of other processes. 2. There is a chance to outsource the work to a company having higher expertise in the field of pay roll work. 3. The values of HR can be increased by decreasing the burden of pay roll from the department. The HR department can concentrate more on policy and decision making. 4. The rapid growth in organisation is capable of leaving HR department in a freezing position.

This situation can be avoided by outsourcing the pay roll to a payroll bureau. The precautions that should be followed and the disadvantages in outsourcing the pay roll work. 1. The need of outsourcing must be identified accurately. The functions that are suitable for outsourcing differ from company to company. 2. The foremost thing is estimating the cost effectiveness of the outsourcing. If it is not cost effective, it is better to rethink about it.3. Along with pay roll, some other services like tax effectiveness also must be outsourced in case of outsourcing of pay roll. 4. The level up to which the service has to be outsourced must be estimated accurately.5. The information supplied to the company to which we outsource the work must be accurate to ensure that the output will be correct.6. The cost of the service and the time for the services are offered for that price should also be mentioned in the pact. 7. The time allotted to the outsourcing process should be significant to avoid the negligence of staff/manager relationships.

Disadvantages of outsourcing the pay rollThe details of expenditure on salary and tax encumbrances will be revealed to others. The policy decisions that are taken to avoid tax restrictions on pay rolls must be conveyed to the company. Though the process