Payroll processing is a challenge for any company, due to the large amount of data to handle. For this, there are several reasons why businesses should outsource their payroll in the UAE. Among them are saving time and costs, as well as having the experience of these specialists.
In this article, you will be able to observe all the benefits that companies receive when they outsource their payroll. In addition, you will find the necessary information to identify the best organization to carry out this process. Here is all the information you will need:
- What is payroll outsourcing?
- Why businesses should outsource their payroll in the UAE?
- Are there any differences between internal and outsourced payroll?
- What comes next after deciding to outsource your payroll?
- How can you choose the best payroll provider in the UAE?
- How can we help you outsource payroll for your business in the UAE?
1. What is payroll outsourcing?
Payroll outsourcing is nothing more than delegating part or all of its management to a specialized external source, such as a Professional Employment Organization. You can also choose a payroll package that fits the business infrastructure of your company. In this way, you will have the certainty that, in each payroll cycle, it will be processed effectively and efficiently.
Additionally, the use of technology is one of the reasons why businesses should outsource their payroll. Due to this, payroll processing has been improved by the use of software or cloud storage. In addition, a company can choose only some parts of the process or the entire processing of its payroll.
2. Why businesses should outsource their payroll in the UAE?
Outsourcing payroll in the UAE gives your business the advantage of not having to do it yourself. To learn why businesses should outsource their payroll, you can see the benefits. Among the main advantages are:
Payroll processing for any business involves a lot of time on the part of the team in charge. The complexity is due to the large number of aspects that are included in the payroll. Within this are deductions, new hires, permits, and changes in labor laws, among others.
Payroll outsourcing in the UAE will allow you to focus on the core business of your company. Plus, your human resources or accounting department will have more time to spend on strategic activities. Also, payroll tasks become more complex as more items are added to them, increasing the time.
Repetitive tasks can take time away from improving productivity, such as those related to constantly checking information. In this sense, payroll outsourcing helps you get the time you need to grow your business.
2.2 Cost savings
Another important point why businesses should outsource their payroll is cost reduction. Working with a payroll provider helps you reduce the costs involved in processing it. This is much more important for companies that do not have a department that handles their payroll.
However, any business can save the cost of hiring, training, and setting up a payroll team. Said expenses also include the acquisition of the necessary elements for an internal team, including furniture, and software, among others.
2.3 You will avoid sanctions
A common problem that companies present is incurring fines or penalties for errors or late payments in payroll. For example, payroll errors can cause discomfort to your employees due to incomplete or late payments. In addition, non-compliance with labor laws that include payroll brings problems to government entities.
Therefore, if you do not want your company to be involved in audits or sanctions, outsourcing is the best way. Payroll providers are experts on local and national laws, as well as being attentive to changes in them. For this reason, they are less likely to make mistakes than perhaps an internal team might.
In this sense, you only need to provide correct information so that the calculations are done correctly. Thus, with payroll outsourcing in the UAE, you will be sure that your company complies with the requirements of the law.
2.4 It will have a specialized team
Another area where your team will spend more time is researching government regulations, laws, and forms. However, thanks to the experience of a payroll provider, you can avoid this point. An Employer of Record has experience both in handling payroll and in certain areas of human resources.
For example, they may have professionals in benefits and deduction management, compensation of workers, and HR strategy experts. You can take this into account when hiring a specialized team.
2.5 Data security
Another important aspect of why businesses should outsource their payroll is that their data is secure. This is because payroll processing is susceptible to computer attacks due to the information they contain. Also, they involve risks such as file alteration, identity theft, or embezzlement.
In this sense, most payroll services have the necessary technology to protect your data. Likewise, it can detect and warn with certainty if there is any type of fraud in your payroll. This is because a quality payroll provider is constantly upgrading its processing systems.
2.6 Self-service for your employees
Thanks to an updated and secure software system, your employees will have the opportunity to self-service information. This benefit also helps understand why businesses should outsource their payroll. In this way, employees will be able to obtain information related to their payroll like:
- Review your payments.
- Check the benefits they get.
- Update your data.
- Review any other document.
In the same way, the employer will be able to do the following things:
- View your payroll reports and invoices.
- Enter and modify any data in your system.
- Offer benefits to your employees.
- Communicate with your workers.
- Review staff performance.
- Keep track of permissions granted.
- Get general information.
3. Are there any differences between internal and outsourced payroll?
A business can choose to do their payroll processing in-house or outsource their payroll in the UAE. In the first case, you can choose to do it manually or use specialized software. However, if you are wondering why businesses should outsource their payroll, here is the difference between the two processes.
You should keep in mind that payroll is not just about making payments to your employees, it involves other complex issues. Among these are collecting all the information, calculating wages and overtime, calculating deductions, distributing payment receipts, etc. So take into account the time required, which you will have free if you outsource your payroll.
Another valuable aspect of outsourcing payroll in the UAE is that you only have to pay the fee of the provider. On the other hand, if you do it yourself, you will have to hire and pay a salary for a specialist (coordinator or administrator). In addition, you must provide it with the necessary equipment such as office supplies, and specialized software and cover maintenance fees.
As well, with in-house payroll processing, you must be aware of changes in labor laws. These are constantly changing, which represents an investment of time added to the process. This is another reason why businesses should outsource their payroll, not to worry about it.
4. What comes next after deciding to outsource your payroll?
Once you have decided to outsource payroll, you need to establish the contracting mechanism of the provider. In addition, choosing a suitable provider is a challenge, due to the multitude of services on the market. However, you can be guided by the following steps for the entire process of finding and contracting the supplier.
4.1 Approach to your payroll
The step before hiring a payroll provider is to establish the needs that your company has in this regard. Therefore, make a complete list of these needs to take into account at the time of the search. In this way, you can have a clearer idea of the cost of the service, an important point.
4.2 Choosing the right provider
Here it is not only a matter of conducting an internet search for suppliers in the area where your company is established. This is a good first step to knowing the services offered and to know certain details. Ideally, get accurate information by contacting the organizations that offer the service.
However, you can get valuable data by contacting other similar companies that have worked with one of these providers. In the next section, you will get more details regarding the selection of the payroll service provider.
4.3 Contact the organization
At this point, you should contact the providers that have remained on your list after the previous selection. This approach will allow you to know if any of them meet the needs of your company. For example, you can find out about costs, what the response time is, and how it will affect HR management in your business.
4.4 Establish the commitments of the agreement
When you have contracted with the correct provider, make sure the agreement is clearly stated. The responsibilities of each of the parties must be well specified so that the relationship is cordial. In addition, there must be a contact between the supplier and the team of your company where communication is constant.
5. How can you choose the best payroll provider in the UAE?
The benefits of outsourcing payroll in the UAE are only realized in full if you find the right one. Therefore, you must know what to base your search on so that you do not end up with the wrong provider. Additionally, the right choice allows you to have a smoother transition to this service for your business.
In the same way, this also allows you not to have a sudden interruption of the process you were doing. In addition to the benefits related to why businesses should outsource their payroll, when looking for a provider, consider:
- Determine what your business needs
As more variants are added to your business, payroll becomes more complex. For example, the frequency with which you make payments and the classification of your employees in terms of work hours and other aspects. So you need a provider that can handle all of this seamlessly.
- Compliance capacity
As you may have seen earlier, compliance with local laws is an important part of payroll. Therefore, the payroll provider must offer you guarantees of compliance with the corresponding laws.
- Provider service history
A reliable supplier has stable ownership, strong finances, and a track record of success. Hence, it is important to find out about the service history of the provider and what the results have been.
- Get information from companies similar to yours
You can get perspective about the provider if you can check with other similar industries about the service received. Plus, you can check with industry analysts for sure insights into payroll services.
- Reach an agreement with all stakeholders within your company
In this case, seek support from the departments involved in processing your payroll. This way you can achieve easier payroll outsourcing.
6. How can we help you outsource payroll for your business in the UAE?
Payroll is a process that can become more complex as more variables are added to it. Therefore, it requires a lot of effort as well as a significant amount of time for your business. Therefore, payroll outsourcing in the UAE offers the necessary advantages of saving time, cost, and effort.
At PEO Middle East, we offer you what the payroll processing of your company needs thanks to our certified experience. Likewise, we also offer you immigration services, when you want to hire international workers. In the same way, we are one of the best companies relocation services in the UAE.