The acquisition of independent contractors can seem like a risky endeavor, especially for small businesses. Even with great workforce planning it's virtually impossible to completely vet potential employees that you might never meet. One of the best decisions you can make as a business owner though is to establish contingent payroll management for your company needs. Taking care of your payroll services in-house might seem like the best idea, but in reality the strategic sourcing of these procurement processes can help your business grow more quickly. Here are three reasons to consider contingent payroll management for your business.
Executing payroll is just one more office task that can slow down productivity and increase stress. You have to be sure you have the right person in your human resource department managing it or else you can wind up in a big mess. Even the slightest mistake can have costly consequences when it comes to people's money. Contingent payroll management services specialize in handling the intricacies of the process. Don't rely on an office assistant still green behind the ears when you can hire experts to do the job right. About 25% of businesses that handle payroll internally report spending more than six hours, or almost one whole workday, a month on it. Not having to worry about this crucial part of your business allows you to focus on what really matters in overall growth and development.
Generally speaking, keeping your payroll expenses between 15 and 30% of gross income will help keep your business on solid financial ground. Chances are you will spend the same or more on payroll by doing it yourself as opposed to outsourcing it. Companies that specialize in these services are well-oiled machines in this field and service the needs of companies of all sizes with ease.
There are many legal complications that can arise from incorrect or error-filled payroll administration. In fact, 40% of small businesses pay fees every year for late or incorrect payments and filings, according to the Internal Revenue Service (IRS). Most professional contingent payroll management services offer protection against these types of things so that even if they mess up (unlikely), they will cover the costs of any penalties.