New research from Paychex reveals a majority of clients choose to continue to invest in benefits outsourcing for increased “peace of mind,” and for more than one-third this is the top reason to invest in benefits outsourcing. Paychex is perhaps best known as a payroll processor, but the firm also is a high-volume national provider of human resources, insurance, and benefits outsourcing solutions for small- to medium-sized businesses.
Partnering with a service provider places “vitally important business functions” in the capable hands of an expert, Paychex explains, helping small businesses improve the quality of benefits delivery while reducing daily stress for small business owners and operators. When the price is right, it’s a win-win-win for the plan provider, business owner and benefit plan participants.
According to the Paychex Small Business Survey, “of the more than 300 business owners surveyed, 56% … are administering payroll on their own. Sixty-five percent say they are handling HR administration themselves, and 59% reported taking care of their own benefits administration.”
Martin Mucci, Paychex president and CEO, says even the top solutions providers feel challenged to stay compliant “in today’s highly complex regulatory environment,” so it’s no wonder small business owners are eager for help and see regulations and process compliance as a top reason to seek external expertise.
A potential lesson for retirement specialist advisers is that the delivery of peace of mind is a prized commodity among existing and prospective small business clients.
NEXT: Other factors driving outsourcing
Paychex also cites “the risk of potential repercussions” as a top reason clients enlist a service provider to administer business functions such as payroll, HR or employee benefits.
The Small Business Survey report cites one certified public accountant, who suggests many times, “it only takes one financial penalty to waste whatever money a business owner thought they were saving by administering key functions like payroll themselves.”
Overall, Paychex finds 40% of survey respondents feel the biggest benefit of outsourcing payroll is the peace of mind it provides where regulatory demands are concerned. That number increases to 63% for those businesses with 20 to 99 employees, the report shows.
Twenty-three percent of survey respondents said relying on the expertise of professionals “was the biggest benefit to outsourcing payroll,” while 19% said saving time is the most beneficial aspect of choosing to work with an outside service provider.