Paychex, the Rochester, NY-based payroll and human resources outsourcing company, released a study last month that found that more than half of the companies they surveyed handle their own payroll and administrative duties, according to the online media channel PYMNTS.com.
The study, entitled “Paychex Small Business Snapshot: Business Owners See Peace of Mind as the Biggest Value to Outsourcing Key Business Functions,” surveyed 300 business owners. Of those reporting, 56% do their own payroll, 65% handle HR administration, and 59% oversee their benefits administration.
As the title of the report indicates, one of the biggest benefits Paychex found was that more than one-third of those that rely on outsourcing their administrative functions responded that “peace of mind” was the most important reason for doing so.
“Whether you’re a small local bakery or the owner of a 300-employee construction company, payroll, HR, and benefits are all critical functions for your business,” said Martin Mucci, Paychex president and CEO. “The challenge lies in managing and integrating these functions while staying compliant in today’s highly complex regulatory environment.”
It’s those legal and industry specific complexities that make outsourcing a preferable alternative for many. Still, many small businesses still insist on performing these duties, in some cases manually.
In fact, 25% of businesses that handle payroll internally report spending more than six hours per month on it. What many don’t realize is the money they believe they’re saving by doing it themselves could end up being spent fixing mistakes or errors along the way.
Accounting errors or typos aren’t the only thing that can disrupt a company’s day-to-day operations either. Andy Childs, vice president of Paychex’s marketing division, spoke with PYMNTS.com about the study’s findings.
“The question becomes what you do when you get a notice from the IRS that says you did something wrong?” Childs said. There’s also the simple logistics of the matter. “Outsourced payments and other administrative functions ensure that people get paid even if there’s a power outage, if there’s a natural disaster or some other unforeseen event.”
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