Why should I or what are the benefits of outsourcing payroll? After working with business owners in Thailand for the past 12 years the decision of whether to outsource payroll or keep doing it themselves, we have summarized the 10 key factors why businesses decide to outsource their payroll to an established firm like Smart Search Recruitment as follows:
1. Productivity and Time Savings
Payroll processing inside your business is a time-consuming process. Keeping track of benefit deductions, garnishments, new hires and terminations, paid time off as well as Thailand regulation changes can be frustrating tasks and often can consume a great deal of resources within a Human Resources Department in all sizes of companies. Each year significant employee hours are spent preparing Thai Revenue Reporting and Social Security contribution and ensuring that they are sent out timely to meet the Thai deadlines for reporting and payments. Outsourcing payroll allows employers to concentrate on their core business and frees up the business owner, Human Resources or Accounting personnel to work more on strategic tasks that could ultimately affect a business’s bottom line. Regardless of the number of people employed by your business, attending to payroll demands a great deal of time and attention to detail. Pay period follows pay period, requiring the business owner to input critical amounts of data and double-checking for any keying errors- time taken away from tasks a small business owners and large multinational corporations must attend to. Those repetitive tasks should not be hours taken away from a key management or owner’s daily productivity. Outsourcing payroll immediately frees up precious time. Employers only need to make contact with their outsourced payroll provider like Smart Search Recruitment once a month for a very brief (few minutes) each month.
2. Cost Reductions
The direct costs of processing payroll can be greatly reduced by working with a n outsourced payroll provider. Large Corporations can afford to maintain substantial Compensation and Benefits (payroll departments) Division, however, SME businesses, having an in-house payroll process can often be a large source of manpower and cost loss. If your business has fewer than 150 employees, there’s a very good chance that you can save money by outsourcing your payroll operations. Do the math. Figure out how many labor hours your employees are devoting to payroll-related activities, (Calculating payroll each time period, printing, signing, and distributing paycheck, computer software and program maintenance, training and support, keeping up with changes in Thailand’s tax rates/laws, preparing and remitting payroll taxes and returns to Thai government agencies, Annual Tax Returns, garnishments, new hire reporting, generating reports for in-house and accountant use) calculate how much you’re spending and compare the amount to the plans offered by several payroll-services providers like Smart Search whose fees are generally less much less.
By outsourcing a company’s payroll in Thailand, you don’t have to worry about your payroll provider company calling in sick, resigning, wanting to take a vacation, or other common factors each employer faces with their staff. There’s also the matter of confidentiality when it comes to payroll. If an employee wants to “share” how much a fellow employee is making that can cause severe challenges to managers in the workplace.
3. Avoid Late Reporting Fines / Mistakes
In 2020 the Thailand Revenue Department maintained that 28 percent of SME businesses pay an average penalty of 28,950 TJHB per year for late or incorrect filings and payments. Penalties for errors, omissions or late payroll tax filings can be very costly. Payroll mistakes are painful, upsetting employees and not reporting timely or accurately to the Thai government can cause real challenges for companies in Thailand. SME Business Owners aren’t experts in the challenging world of Thai Tax Regulations. At the same time, they are legally responsible for any cases of misrepresentation or a failure to accurately report employment taxes to the Thai Revenue and Social Security Departments lead to audits and penalties—situations no business wants or needs. Thai Government Regulations are always changing, and business owners can’t be expected to stay on top of these changes. Professional payroll providers like Smart Search Recruitment must stay current with rules, regulations and changes in payroll regulations and statutory withholding. A good payroll outsourcing services provider in Thailand like Smart Search Recruitment with years of experience is far less likely to make a serious error than an initial payroll specialist. Many outsourced payroll providers calculate payroll taxes, manage taxation filings and payments and will assume the cost of penalties due to incorrect calculations or late payments so long as you provide the necessary information and remit funds as per your business agreement.
Most business owners and Payroll Specialist have time to research and study constantly changing regulations, withholding rates, and Thai government taxation changes. By outsourcing payroll, a small and large business can take advantage of expertise that was previously available only to big companies. The most valuable payroll companies have a team of experts who handle many areas of Human Resources and Payroll functions and are often much more highly skilled comparing to in house payroll Specialists. Make sure you engage a qualified team of experts who can administer all the aspects of your HR and payroll needs as their businesses and people are often the best in knowledge and expertise in Compensation and Benefits Administration in Thailand.
Payroll processing is a complex and potentially risky business operation. Even with Senior tenured employees, there is always a risk of identity theft, embezzlement of funds, or tampering with sensitive personal data for personal gain. There’s also a known risk when using in-house payroll software: How safe and secure is payroll data on the company’s server or network or cloud-based payroll (HRIS) system? This very real question can consume a business owner’s energy and attention as well. Do you have the time and energy to closely supervise your business’s payroll for time and rate abuses and other unethical activities? Smart Search Recruitment employs technologies that can spot and alert its clients to various types of payroll fraud. Additionally, our HRIS Solution offers a “safe haven” for maintaining confidential payroll data in accordance with Data Protections Regulations not only in Thailand but meeting all international certifications as well. In addition to redundant backup and multiple server locations, a quality payroll provider invests in state-of-the-art systems for storing and protecting data, simply because it’s part of the service provided to clients and their systems are often much more advances than in house HRIS systems and solutions.
6. Human Resource Information System (HRIS)
Human Resource Information Systems (HRIS) have become one of the most important tools for many businesses. Even the small, 20-person office needs to realize the benefits of using HRIS to be more efficient. Many firms do not realize how much time and money they are wasting on manual human resource management tasks. It allows companies to cut costs and offer more information to employees in a faster and more efficient way. Smart Search has researched all available HRIS solution and has been using a state-of-the-art cloud based HRIS system that its clients and employees can access remotely from anywhere. Using the right payroll company with an HRIS system allows small to medium sized business access to this platform without having the expense of buying and maintaining it, another large company benefit of outsourcing payroll.
7. Avoid Technology Advancement Costs
A constant question for business owners is whether they have the latest version of their payroll software that complies with the complicated Thai Revenue and Payroll regulations. Most Global HRIS System like SAP and others were designed for larger international markets but have not been able to develop or keep up with the constant changes of Thailand’s Payroll Regulations. For Example, in 2020 there were 4 statutory withholding changes for Income and Social Security Deductions that almost all HRIS system were not able to keep track of. Using an HRIS System that is not able to cope these constant payroll changes with the can result in large penalties and again a further cost to employers.
8. Payroll Expertise
Payroll responsibilities with an overworked Human Resources Manager or Accounting colleague or whatever the situation, every business with in-house payroll runs the risk of receiving notice that your payroll person is taking an extended vacation, takes sick leave, took another job or simply will not be able to do payroll. In such common situations the person will walk out the door with their knowledge of the payroll process and can be a real challenge many businesses face when it comes to paying their employees. Outsourcing your payroll will assure retaining the knowledge of payroll-related Thai Tax Laws and Regulatory Mandates is maintained at all times. Payroll companies Like Smart Search Recruitment Experts are trained to do and part of the provided services toothier clients. Savings in time and money, greater data security and the comfort of knowing experts are handling your payroll functions are compelling reasons to explore the benefits of outsourcing. Your staff could try to achieve the same level of understanding, but it would take a large investment in time and effort. With a payroll service, output speed and quality won’t vary in accordance with vacations and illnesses. You also won’t have to spend time helping new hires understand your business’s payroll system. If you experience employee turnover or inability to work for periods of time in your payroll area of your business, outsourcing payroll provides a framework to be able to train an employee to report hours and communicate the payroll data without experiencing the pain of a missing skillset of an expensive in-house payroll professional. This one of the key benefits of outsourcing payroll.
9. Employee Self-Service Features
A 2020 Thailand Survey of HR Directors and Business Leaders identified that providing self-service options to employees is a key to their success. Smart Search Recruitment’s HRIS system was designed as an integrated payroll platform with employee self-service options as their main focus. Our HRIS system allows all employee to handle common tasks on their own, including:
When these key business functions are outsourced, many reputable payroll providers Like Smartt Search also offer mobile applications and remote access for employee self-service resources that can help preserve HR teams’ time and resources.
10. Worry/Peace of Mind
With the help of a professional outsourced payroll service provider, the hassle and pain often associated with processing payroll will disappear. Each Business that outsources their payroll will only need to provide basic information, and your payroll company takes care of the rest. And with guarantees of error-free payroll and tax filings and payments, you can eliminate the worry that many experiences when it comes to paying employees and taxes correctly and on time. 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. A clear focused mind is one of the true benefits of outsourcing payroll.
In Conclusion, when you encounter a business owner or manager who can identify with 1 or more of these 10 factors that prevent productivity and hinder profitability centered around the time and cost associated with administering your own payroll, one can usually find a business case to make the switch for outsourcing payroll. These are the key benefits of outsourcing payroll. Assuming the payroll provider does a quality, job and serves the client, these outsourcing relationships become long standing business partnerships.
Smart Search Recruitment is Bangkok’s leading executive recruitment consultancy. We serve multinational and local companies, sourcing high-caliber candidates and placing them in mid and senior-level roles. For recruitment service inquiries contact us. We are committed to meet our client’s needs by delivering an exceptional level of service. We have insightful HR resources updated everyday. Please keep in touch with us via our social media.