Blog Post

3 Top Reasons to Outsource Payroll


Guest author Nathan Porter, a longtime accountant and owner of JMP Global, Inc.

Outsourcing has been called the next industrial revolution and we’re seeing its massive appeal in some of the most innovative new businesses and industries. A top example: San Francisco-based Uber, which today outsources driving for residents of more than 630 cities worldwide. The trend of outsourcing non-critical business processes is experiencing explosive growth in human resources and payroll.

Between 2012 and 2016, the global business process outsourcing (BPO) industry grew at a compound annual growth rate of 4.4 percent, reaching total revenues of $140.3 billion. It’s not just corporate giants driving the trend. In 2014, small businesses spent some $462 million on outsourcing – and with good reason. On average, a company can save about 60 percent in operational costs by outsourcing appropriate functions.

Economists forecast a growing economy in 2018 which means new companies forming and established companies growing. It also means thousands of new employees being hired daily across the US and placing an increased burden on human resources, payroll and related operations for these emerging and growing companies, thereby creating a prime opportunity for companies offering payroll outsourcing services. In fact, it’s estimated that businesses outsource upward of 32 percent of their HR and 30 percent of their finance operations.

If you’re a payroll services provider looking to boost your clientele, talk to your prospects about the top three reasons for outsourcing their payroll.


  1. Their stress level will plummet – in a good way: Let’s face it – payroll can be a tedious and complex beast, particularly when dealing with issues such as taxes and worker’s compensation. A seemingly simple mishap can prove devastating to a small business. Some 90 percent of businesses I’ve seen fail or face significant financial penalties during my years in accounting and payroll did so in large part because of payroll-related mistakes such as improperly filing required forms or failing to pay taxes. Why take that chance?
  2. It’s less expensive than they may think: A top reason that many small business owners initially dismiss the idea of outsourcing is they mistakenly believe it’s costlier than keeping all business processes in-house. But that’s far from the case when it comes to payroll. Rather, outsourced payroll costs are minimal for companies with fewer than 50 employees, particularly when you consider the potentially high costs of errors. And while online self-service options can prove helpful by running calculations for a user, much of the burden still lies on the company’s staff. For instance, businesses still must submit taxes accurately and on time. Outsourcing the entire process proves a significant savings in time, stress and money.
  3. It frees up time for making money: Generating revenue is the key to business success. To that end, minimizing time spent on any activities that don’t directly support or generate revenue is critical. Think of every non-revenue generating business operation as one that’s costing you the opportunity to make more money and the benefit of outsourcing those processes quickly becomes clear.


Remember that the key to success in payroll services is running a solid company and providing unmatched service to clients. Do that and you’ll be in prime shape to take advantage of today’s booming business economy and growing outsourcing trend.

This blog post is guest authored by Nathan Porter, a longtime accountant and owner of JMP Global, Inc., a payroll services and bookkeeping firm. Reach him at