Take a look at all of your major payroll providers – from ADP to BenefitMall to Gusto – and you will discover millions of companies around the world making use of a range of payroll and HR services provided by outsourcing partners. Most are small- and medium-sized businesses not large enough to warrant having an extensive in-house staff of payroll professionals.
The numbers clearly indicate that one of the driving forces in payroll outsourcing is cloud-based payroll. In other words, small- and medium-sized businesses are foregoing upgrades to their own internal systems and turning to cloud providers instead. To say that cloud-based payroll is hot right now is to state the obvious.
So what is going on? Here are the top five reasons companies are switching to cloud-based payroll:
1. It’s Cheaper
Switch to a payroll service like BenefitMall and there will be no upfront investment in software. That is because you are not buying anything to install on your company’s local computer network. Rather, you’re signing up for a software subscription. Cloud-based payroll is built on the software as a service (SaaS) model. That makes it a lot cheaper to get up and running.
When you account for the cost of software upgrades and network maintenance, cloud-based payroll is likely to cost less in the long run, too. So not only do you have a smaller upfront investment, you are also spending less over the lifetime of your business.
2. It’s Easy
Third-party payroll providers employ the payroll experts so that you don’t have to. Utilizing a cloud-based system is as easy as learning a dashboard and how to enter data into the system. You don’t have to send your HR workers or accountants to night school in order to learn all of the complexities of payroll. The payroll provider handles all of that for you.
3. It Ensures Compliance
Small- and medium-sized businesses have a tough enough time maintaining compliance in the payroll department. Every time federal or state lawmakers add yet another law to the books, compliance gets even tougher. Payroll providers make it their business to specialize in compliance. Outsourcing payroll means no longer losing sleep over things like the ACA and payroll withholding.
4. It is Scalable
One of the hidden gems of the cloud is its ability to scale. Assuming the payroll provider you choose is utilizing the latest technologies, its software will scale easily as your business grows. The same is not always true of locally installed software you buy from a vendor.
Note that scaling works in the opposite direction as well. Here’s the point: your payroll provider’s software will work seamlessly no matter how many employees you have on the payroll. Big, small, or somewhere in the middle makes no difference. The software accommodates your needs as your business evolves.
5. It is the Future
Forward-thinking employers understand that payroll is headed for large-scale automation. In fact, some of that automation has already been implemented. More automation is sure to follow until we eventually reach the point at which automated payroll software needs very little human input.
Those same forward-thinking employers utilize cloud-based payroll now because they know where the future is headed. They want to be on board so that their companies are already integrated as the future unfolds.
America’s 30 million small- and medium-sized companies have options when it comes to payroll. More of them are turning to cloud-based solutions as more fully understand the benefits of doing so. Cloud-based payroll is easy, cheap, compliance friendly, scalable, and gradually more automated. It is the way to go.