Thirty-three percent of midsized companies have faced accidental noncompliance penalties for government regulations in the past year, according to the latest ADP Research Institute study.
Among those penalized, they received an average of 6.4 fines or penalties, and of those that process payroll in-house, they received nearly three times as many fines or penalties as respondents that outsource their payroll.
"A growing number of midsized companies are outsourcing their payroll processing to help mitigate risk in an increasingly complex regulatory environment," says Regina Lee, president of ADP major account services, national account services, GlobalView and ADP Canada.
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In fact, over the past seven years, the number of respondents processing payroll in-house rather than through an outside vendor has fallen. Fifty-four percent of respondents managed payroll internally in 2005, and 46 percent of respondents outsourced payroll; however, By 2011, 48 percent of respondents processed payroll in-house, while 52 percent of respondents outsourced payroll.
The study also reveals a decline in satisfaction among respondents that manage their payroll in-house and higher satisfaction among respondents that outsource payroll. Seventy-two percent of respondents processed payroll internally were satisfied with their payroll function in 2007, but that fell to 61 percent in 2011. Satisfaction with payroll processing grew 10 percent among respondent that outsource the function as it rose from 52 percent in 2007 to 62 percent in 2011.
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