Imagine a situation where there is a delay in salary/wage disbursement — not due to paucity of funds but due to an error in payroll processing..

The staff and workers, who normally cooperate with the management when they explain about the tight cash flow situation, may not be so inclined when they are told that it is a system error due to which they are unable to disburse the salary/wages on time.

Further, payroll function demands accuracy and possibly the prime reason for contracting a third party to handle some or all of a business’s HR tasks and functions. The other factors include adhering to statutory compliance (PF, ESI) and updating changes with the laws.

“Outsourcing eliminates the need for depending on internal resources for setting up, tuning and running payroll systems and processes. Technology obsolescence is a huge concern in an era of short life-cycles as businesses often invest huge sums into technology only to find that they would have to upgrade the same before they accrue the benefit of implementing it,” says Jagadish Ramamoorthi, Co-Founder and CEO of Allsec Technologies.

The company has been in the business of Human Resources Outsourcing (HRO) for well over a decade processing payroll and doing statutory compliances for over 200 clients with an employee base of close to 6 lakh.

On the trends and challenges in the HRO space, he said, “there is wider adoption of HRO services as businesses see it as an opportunity to leverage and control risk associated with compliance. The trend today is contingent staffing, increased incidence of temporary staff, allowances and benefits around work-related contingencies and so on.

Migration to auto mode

Compliance is laborious. Legislative differences in each State calls for keen attention. Records, registers have to be maintained and returns filed for each (statutory compliance on time. Now that the Centre and State governments are in the process of transforming all their statutory compliances including labour laws to an automated mode, it is bound to bring in greater transparency, visibility and security.

“Our plan during 2018-19 includes automation of the knowledge portal, which will act as a common platform wherein all the data, forms, Acts, checklists, notifications, etc, are available to all our clients; generation of both EPF and ESI challans by an application; creating a vendor management tool for capturing contract employees data, and using Chatbot to answer all queries pertaining to PF and ESI.”

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