In addition to saving time on pernickety, and yet crucial details, additional benefits include increased confidentiality. By outsourcing payroll remuneration, details remain confidential from your internal employees. Security is another benefit, because when payroll information and documentation is stored off site, there is less risk of it being lost or destroyed.
Franceschini believes increased privacy is a major advantage of outsourcing. "Some companies, for a host of reasons, don't want the salary information of their staff in the hands of internal employees," he says. "If a company's main reason for outsourcing is the privacy issue, we find it is quite often the managing director or CEO of that company we work with, but not much of his or her time is taken up, maybe 10 minutes a week. Customers don't have to invest in software, office space, bank fees, and so on, and it gives them more time to concentrate on executive business issues," he adds.
Cost benefits are also significant, he says. "If you've got a staff member looking after payroll three days a week, and then consider that 60 percent of that person's salary is being spent on payroll, and add to that administration, legislative costs, systems costs, hardware and software costs, and you can see that outsourcing is cheaper," he says.
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CITEC is a commercialised Government-business that includes business process outsourcing, and hosted payroll amongst its service offerings. The company manages over 130, 000 payees under 250 awards, and liaises with over 400 deduction authorities, over a variety IT platforms including IBM, HP, Sun in a hosted environment, as well as payroll and disbursement payment services over SAP.
The company offers two kind of payroll services. The first is in conjunction with HR software firm Aurion. The Department of Public works, responsible for the delivery of capital works initiatives, facilities maintenance, procurement, development and administrative services for government and industry clients, is one of its customers.
Payments for the organisation are made across eight different enterprise agreements, reflecting varying pay rates for white and blue collar employees. CITEC manages IT systems support and payroll disbursement for the department's 4200 employees located in more than 20 regional and metropolitan sites.
The second payroll service offered by CITEC is called PAY Solutions and it handles payment of funds to your employees and approved deductions to other third parties, such as the ATO. Services include funds management and distribution to payroll reporting, printing, and reconciliation. These services also allow employees to have automatic deductions taken from their pay for purposes such as health insurance and child support. CITEC can liaise with the ATO, health insurance groups, and other financial organisations -- all the running around, basically.
"We provide services to all sizes and kinds of companies, including local and national government and across a variety of verticals including federal government, finance, legal, utilities, and resources," says Patricia Hopkins, director of professional services and BPO at CITEC.
Hopkins says it tends to be the more mature companies who tackle payroll as a kind of selective outsourcing, or what Hopkins calls "IT intensive business functions. "We have a number of arrangements depending on how the client wants to structure it, and these range from a fixed monthly payment to a per-employee-per-pay basis," says Hopkins. "Some clients want to own their own applications and some want a provider who can provide the IT infrastructure, which we do," she adds.
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