Why Do Companies Use Third-Party Payroll Services? Seeking Insights Beyond Confidentiality

Dear Seniors,

I just want to understand what the purpose is of having the salary processed by a third party. I would like to know why the company chooses to appoint a third-party payroll service to handle the salaries of its own staff. Are there any reasons besides confidentiality for this decision?

Regards, Sandeep C.

Sandeep C - Outsourcing leads to efficiency. In this case, outsourcing payroll lowers the cost per transaction, ensures the cost of technology upgrades is lower (cloud computing and SaaS), and ensures that someone else is driving a zero-defect process without consuming too much of management bandwidth.