Since the beginning of employment days, employers needed to manage their employee’s salaries, social rights and many more tedious time-consuming duties.
Nowadays, many employers have begun to outsource such tasks to external companies. One of the most popular methods to enjoy such services is by using a payroll processing company.
The following article will acquaint you with the payroll services method, its various properties, and many advantages.
The employment methods of the modern age
In the field of human resources there are various recruitment and employment methods: using an employment agency, outsourcing, direct employment and more.
Those methods differ from each other in the way they locate and recruit their candidates, the way the employee gets paid and the way the working load gets managed. In the past several years the payroll method gained popularity due to its advantages.
What are payroll companies?
Payroll processing companies provide a service that allows employers to hand over all the matters that are traditionally under the scope of the human resource department to an external specialized company such as Adecco.
This means that the employee is professionally managed by one company, but his paycheck, social rights and other similar affairs are managed by the payroll company.
That way the company doesn’t have to deal with tasks that are not related to its field of expertise. This can reduce the company’s expenses and responsibilities and ensure its success.
Who uses payroll companies?
Payroll services can be used by any company or business that is interested in locating and hiring candidates independently and yet wishes to avoid the administrative aspects of managing employees.
Thus, in this arrangement, the professional recruitment is done by the company itself, but Adecco will manage all the non-professional maters.
Payroll services are suitable for all kinds of companies and are particularly good fit for companies who are not interested in having a human resources department in their business or wishes to take a part of its activities outside of the organization.
An additional situation where using payroll services might be a good solution is in cases of short-term employment. In such scenarios, the high costs of registering the candidate as an employee can be saved by using a payroll service.
What is the connection between payroll companies and outsourcing?
Outsourcing is a method of managing the workload through an external company. In most cases the agreement between the two companies is limited and the wanted outcome is well defined by the company who ordered the project.
Adecco will manage the process throughout the various stages and will oversee all locating and hiring suitable candidates and suppliers, managing the work, paying the employees and delivering the finished outcome to the client.
In addition to that, Payroll is essentially a reduced type of outsourcing in which the responsibility of managing the human resources department are handed over to Adecco as the payroll managing company.
Calculating the salary with a payroll company
The way the salary is calculated in Adecco is quite similar to the way it is calculated in any other human resources department and are derived from the labor laws and the relevant characteristics of the employee.
The salary rate is determined by a personal contract or, in some cases, by a collective agreement which is usually common in the public sector. From this agreed salary, income taxes and welfare charges are deducted.
In addition, every so often the employee’s salary must be updated due to changes in labor law and it must be presented clearly in an official paycheck that contains all relevant data.
What are the different steps of using payroll services?
The first step is recruiting an employee. This stage is executed by the company itself and is derived by the company’s needs and requirements. This stage includes tracking down eligible candidates, interviewing them and signing them on a contract.
After a candidate is chosen the company hands over all administration duties to Adecco which will be responsible for those matters from this point on.
Termination of the agreement between the employee and the employer is subject solely to their decision. Adecco will not interfere in this matter and will help execute and pay a severance package if required.
What advantages payroll services have over other recruitment methods?
The main benefit of using Payroll services is the fact that under certain conditions it enables the company to reduce their expenses. Most companies have a human resources department or a few employees that manage the human resources matters.
Companies who use outsourcing services enjoy this advantage as well, although, by using a payroll company, the company itself has more control and can enjoy higher quality of work.
An additional advantage of using a payroll company is the high expertise they offer. Since payroll companies specialize in processing paychecks, they are highly skilled and experienced in this field and this assures a minimal number of mistakes that could potentially cost the employer a lot of money later on.
Not having to take care of all those administrative matters, the employer is free to allocate his resources and time to managing the company. The employees in the company are legally hired and compensated and the employer does not have to take care of it.
The following table summarizes the differences:
|Employment Agency||Outsourcing||Payroll Company||Type of Employment Service|
|The employment agency||The outsourcing company||The employer||Locating and hiring the candidate|
|The employer||The outsourcing company||The payroll company||Paying the employee|
|The employer||The outsourcing company||The payroll company||Termination of employment|
|The employer||The employer||The employer||Managing the workload|
|The employer||The outsourcing company||The payroll company||Paying severance package|
Payroll services reduce the amount of bureaucracy issues the company must manage such as managing paychecks, calculating hours of work, updates in labor laws and social rights, etc. and passes those tasks to Adecco as their payroll company.
Adecco manages those tasks in a professional, fast, and efficient manner and enables her clients to focus on managing and promoting their firm all the way to success.