Driving organisational growth by outsourcing payroll

While more organisations are finding that it is taking more than just compensation and benefits to attract and retain the best talents, employees still expect to be remunerated fairly, and on time, for the work they do.

However, not all organisations have the resources or expertise to manage their own payroll, leading to an exponential increase in payroll outsourcing. Speaking exclusively to HRM Asia, Albert Liew, Managing Director, Singapore & Indochina, BIPO, said, “Increasingly, in today’s globalised business context, payroll outsourcing is seen as a necessity that supports business by transforming manual HR practices, as well as improving productivity and cost effectiveness.”

“Partnering a full-service provider that has the capabilities to take on salary calculations, tax submissions, reporting, and e-Payslips enables companies to focus on strategic initiatives to grow their business. Additionally, by reducing time and manual efforts spent on routine administrative tasks, HR professionals are empowered to champion an employee-centric culture.”

Essentially, payroll outsourcing allows organisations to transfer the administration of a key business function to a full-service payroll provider. This minimises payroll calculation errors, reduces costs, increases time savings, and provides added flexibility for HR to play a more prominent role in driving key strategic human capital and workforce planning initiatives.

Payroll outsourcing can also allow organisations to leverage best-in-class expertise to mitigate risks and reduce the risk of financial penalties arising from non-compliance of labour and employment regulations.

Liew cited, “An amendment to Singapore’s Employment Act made it compulsory for all employers to keep employment records, provide written records of key employment terms (KETs) and itemised pay slips to employees. With any breach of these requirements resulting in hefty penalties, this led to a quick uptick in employers outsourcing their payroll functions to ensure compliance and access to ePayslips.”

In Singapore, BIPO is one of the selected vendors pre-approved under the Productivity Solutions Grant (PSG), which supports companies keen on adopting IT solutions and equipment, and outsourcing services to enhance business processes.

To be selected as a PSG-approved vendor, companies need to be registered and operating in Singapore, offer a solution that has been identified as contributing to at least 15% in productivity gains per year in the relevant business processes, and having at least five SME clients that have used the solution for the past six months and are continuing to do so.

Established in 2010, BIPO provides payroll outsourcing solutions that include payroll processing, contributions to the Central Provident Fund (CPF), Singapore’s savings and pension scheme, digital payslips, expense claims processing and reimbursement, as well as year-end preparation of tax returns.

On top of these, BIPO also offers Human Resources Management System (HRMS) applications such as Personnel, Payroll, Claims, Leave, and Attendance to their customers, which typically hire between 50-200 employees.

For SMEs such as these, payroll outsourcing should be a priority if they are looking to expand and scale hiring quickly. It allows leadership teams to spend more time focusing on strategic initiatives instead of non-core and transactional work and provides organisations with the flexibility and agility to respond quickly to changes, even if they lack the expertise.

Liew explained, “Payroll is one of the most common and repetitive tasks in any HR function and results in a high level of errors due to manual inputs and processes that still exist. By outsourcing payroll and HR tasks, businesses are leveraging on the expertise and knowledge of external vendors like BIPO with the proven track record to address pain points and challenges.”

Employee experience to define payroll outsourcing in 2023

With the economic outlook for 2023 continuing to look uncertain, businesses will be looking to mitigate risks while seeking expansion.

“For business continuity, companies have pivoted to having strategic outsourced [payroll] vendors with regional and global capabilities, like BIPO.” – Albert Liew, Managing Director, Singapore & Indochina, BIPO

This, Liew predicted, will see payroll outsourcing among SMEs gain momentum. “For business continuity, companies have pivoted to having strategic outsourced vendors with regional and global capabilities, like BIPO. Compliance will also be key for both outsourcing vendors and technology partners who provide payroll solutions.”

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These are likely to include next-generation payroll solutions that adopt machine learning, automates data flow with the capabilities to detect payroll fraud, and cloud-based SaaS solutions that support payroll and self-service functions.

With hybrid work likely to continue into 2023, BIPO also believes that data will be vital to improving the employee experience, leading to the introduction of a new BI module in the BIPO platform that aims to perform critical issues such as attrition with data at its core.

Liew highlighted, “Access to consolidated, real-time payroll data and visualising payroll data is the first step in attrition predictions, enabling business leaders to make well-informed decisions while tracking global payroll cuts.”

“The employee experience is even more important as businesses look to pay globally distributed teams on time, and in the right currency. Hence, finding the right payroll outsourcing vendor is key.”

Click here to find out how BIPO’s payroll outsourcing solutions can help your organisation stay focused on business outcomes that matter.