Payroll outsourcing is increasing across Europe. That’s one idea from a large-scale employer survey conducted by HR and payroll service provider SD Worx. Up to six out of ten European companies currently have or are considering a contract with an outsourcing partner that performs (part of) their payroll processing.
While the willingness to outsource HR tasks hasn’t changed much since early 2020, payroll outsourcing is becoming increasingly attractive. Companies in the Netherlands, Italy, Scandinavia, Belgium, the UK, France, Switzerland and Austria consider payroll processing to be one of the areas of human resources where external providers can make the biggest difference. The only countries where payroll outsourcing is not in the top five are Poland, Ireland, Spain and Germany.
The rising figures in Italy and Switzerland are particularly surprising: while only 17 percent of Italian companies and six percent of Swiss companies would fully (or partially outsource) their payroll administration by 2020, the number rose to 26 percent. in Italy and twenty in Switzerland. percent in 2021. Interest in payroll outsourcing also increased in the Netherlands, France, Belgium and the United Kingdom compared to last year. The smallest differences can be seen in Germany, with a change of half a percent, and Ireland, with a decrease of one percent.
peace of mind
“First, payroll outsourcing offers room for more strategic projects,” says Patricia Molenaar of SD Worx. ‘From talent recruitment to training. Most HR teams are better off investing in this than time-consuming and repetitive processing of payroll. Second, outsourcing offers peace of mind during busy times. Technology developments and cloud-based services ensure secure and easily accessible data for remote employees. This, while an HR partner ensures compliance with new rules and regulations. Finally, there is also a human factor: outsourcing the most error-prone payroll tasks improves the team atmosphere in a department that has been under constant pressure for years. ‘
Around 43.5% of European companies are actively trying to improve their payroll processes. Payroll has also gone from number eight to number three on the list of HR domains best suited for outsourcing. One explanation for this may be that HR managers prefer to leave this to a trusted partner. On the one hand due to the complexity of the legislation and on the other hand due to the continuity of the business. Only the automation of HR processes and compliance with socio-legal regulations is outsourced more than payroll administration.
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