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Benefits of In-house payroll solution while payroll is outsourced


Farsight Payroll outsourcing comes with its own benefits and challenges. Some organization can never afford managing entire payroll management in-house, for example, if a foreign based organization enters in Indian market, the organization would tend to outsource payroll to avoid statutory compliance issues or hassles of managing higher headcounts. The business obligation of payroll outsourcing left organizations to live with specific challenges that may lead to inevitable frustration for compensation & benefits (C&B) department.

No control over payroll Most common challenge that organizations face with payroll outsourcing is lack of control over payroll data & process. It makes organization crippled with inflexibility whereas flexibility of an organization is one of the vital capabilities to be competitive..

Limited set of periodic reports with no ad-hoc reporting The lack of control over payroll data confines to a small set of periodic reports and make incompetent to payroll manager to lay down the complete picture of C&B function. Furthermore, no real time reporting narrows down the scope of brainstorming on critical business issues related to compensation & benefits and limited improvement opportunities. Moreover, payroll vendor charges exorbitantly, if a customized report is being asked which is out of scope from contract..

Inefficient help desk The efficiency of HR help desk is significantly reduced due to dependency on payroll vendor. In order to support and respond to employee’s query effectively, help desk has to discuss with outsourced organization. This increases the response and resolution time to employee query and lead to employee dissatisfaction who requested for the information..

Preparing input data for vendor is a paranoid Every month, organization has to give input data to payroll outsourcing vendor for processing salary. Payroll vendor takes input data in their predefined formats. Organization has to struggle with manual data translation in the prescribed excel formats with lots of discrepancies in data due manual translation. The data translation and consolidation is a formidable task, if company operates at multiple locations
and have different HR/attendance policies for each location. Hence, preparing input files becomes equally challenging to managing payroll in-house. Besides, if organization wants to change payroll vendor, the transition becomes a paranoid..

No cross verification in salary computation Organization also struggles in validating whether processed salaries are correct or not. Payroll vendor shares processed salary data, not how are they computing those salaries. So it is difficult to identify discrepancies in their salary computation if the vendor is trying to cheat.

HCM Engine as a bridge – a smart way to go forward Organizations have lived up with above challenges for a long time. Now, HCM engine (HR Software Solution) as a bridge has become a smart way to rule out these challenges. HCM engine offers flexibility to manage payroll in-house while payroll is outsourced. HCM engine offers a centralized system for payroll data management where HR/admin teams, at multiple locations, prepare and maintain their employee data along with salary inputs & transactional data like attendance/leave data etc.

Besides, HR/admin professionals stop pricking their hairs for preparing input data because a secure interface is provided to payroll vendor where they export the input data for salary
processing in their own format and upload the processed information back into the system. HR manager can compute salaries and verify even before the salary disbursement.
Therefore, it saves tremendous time and avoid allegation of providing incorrect input data for wrong salary processing by the vendor. It also ensures that the data would remain with the organization even if, the vendor is not.

Organization gets ease of analysis through powerful ad-hoc reporting function along with customizable management dashboard within the HCM engine. Hence, HCM engine as a bridge has become an effective tool for empowering organizations which have outsourced their payroll..