Understanding Outsourcing and How Payroll and HR Management Works?

Difference Between BPO & Offshoring

Outsourcing is hiring a service provider to execute a function on the company's behalf. Before we move further let us understand the difference between outsourcing and offshoring. The latter is moving entire operations or a vital function to another country.

In offshoring, no 3rd party is involved. This is done usually to gain cost benefits or other factors that may be hampering production or execution in the country of origin.

In the case of outsourcing a 3rd party service provider is involved, and the function outsourced is not a core function. In the case of BPO or business process outsourcing the core function is awarded to 3rd party.

Outsourcing Market Size

In India, the IT outsourcing market size is at INR 5,649.47 billion in the year 2019. By 2025 the market size is expected to reach INR 8,830.14 billion. It is growing at the rate of a CAGR of 7.25%. Of this, the World's payroll outsourcing marketing size is over 9 billion US dollars in the year 2021. Growing at the rate of CAGR 7.2% by 2031 the market size is expected to reach 19 billion US dollars.

ADP is the global leader as far as outsourcing is concerned with over 70,000 employees.

HR Outsourcing

Payroll Outsourcing is part of HR or human resource outsourcing. HR is comprehensive, performing all employee-related tasks. It is short of full service, wherein all aspects of employee management are included. Some of the HR also include managing employee taxes, recruiting, insurance, health benefits, leave with wages, monthly salary, audits, time, and attendance. Talent management, company culture, succession planning, and other corporate responsibilities are within the purview of HR management.

Thus HR management is outsourced often when companies wish to reduce the burden on their existing staff or hire new personnel. The HR Can be managed by a third party but smaller companies prefer to use automation or software tools like Spine HR. Spine HR is a comprehensive software. It manages all HR functions including payroll management.

Payroll Service Providers

There are many payroll service providers in major towns of India. In Mumbai, Metavsion Technology is one such company that excels in many business solutions and software solutions. You can buy Spine HR and Payroll management software from Metavision Technology. It is affordable and reliable.