Business owners understand that an inefficient payroll system can have far reaching consequences, from impacting staff morale to the company’s bottom line.  This has led to the growing global trend for companies to outsource their payroll.  

With outsourcing, senior executives have realised they can focus their time on running and growing their business rather than the all-time consuming payroll administration and legislative issues.  Outsourcing payroll usually brings with the added benefit of cost savings as a result of a reduced headcount and expensive systems not being required.     

The recent introduction of PoPI (The Protection of Personal Information Act) requires companies to conduct themselves in a responsible manner when collecting, processing, storing and sharing employees personal information by holding them accountable should they abuse or compromise any personal information.   Payroll is often the most confidential information of an organisation’s and it has to be secured in a PoPI compliant manner. Consequently many organisations in South Africa have taken the step to outsource their payroll to a trusted service provider. 

The PoPI Act aims to protect an individual’s right to. Emailing payroll spreadsheets is considered HIGH RISK as these spreadsheets may be forwarded on, sent to the incorrect recipient, passwords forgotten or leaked.  Frequently in-house servers are not secure enough to house this information. It has become imperative that internal procedures and controls are regularly monitored, to ensure PoPI compliance.  New employee take-on procedures need to have relevant clauses explaining the need for personal information and employee consent.  Employment contracts need to be updated to include the PoPI Act clause and current employees provided with an annexure to this effect.  Employees have to provide their consent for their personal information to be shared with an organisation’s third party providers, even if these are pension, provident fund or medical aid providers.

Outsourcing payroll is a viable business decision – reducing costs, labour issues and most importantly RISK.

“The biggest thrill wasn’t in winning on Sunday but in meeting the payroll on Monday,” Art Rooney ‘The Chief’, founding owner of the Pittsburgh Steelers, an American football franchise in the National Football League (NFL), from 1933 until his death.”

For more information and to eliminate your payroll frustrations contact TRUPAY on payroll@trupay.co.za