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Outsourcing Payroll And Tax Services Essay

1854 words - 8 pages

Pro Staffing Research for Outsourcing Payroll and Tax Services

03/15/2014

Table of Contents
Project Scope 4
Requirements 4
Procurement Advantages 5
Savings Analysis 5
Procurement Disadvantages 6
Risks 6
Scoring Matrix for Procurement Proposals 8
Contractual Analysis 12
Considerations 12
Proposal Information 12
Legal Compliance Subjects 12
Proposal Questionnaire 12
Instructions to Proposers 13

Project Scope

Pro Staffing research of outsourcing payroll and tax responsibilities versus in-house or new software package to evaluate which process will better meet the needs of corporation in both cost and quality of services.
The analysis shows the ...view middle of the document...

29% were “all-service” ADP clients, meaning they outsourced payroll, time and attendance, workforce administration, and health and welfare benefits administration.

* 67% utilized ADP time and attendance services;
* 42% used an ADP-hosted system as their HR system of record; and
* 38% outsourced their benefits administration to ADP

The size of the client companies that participated in the study are as follows:
* 10,000+ employees (25%)
* 5,000 to 9,999 employees (37%)
* 2,500 to 4,999 employees (17%)
* 1,000 to 2,499 employees (21%).
 

Data from businesses perform payroll internally, “nearly one in four report spending more than six hours per month on payroll. That's at least 72 hours per year—nearly two full workweeks. If we use 2012 data from the Bureau of Labor Statistics to assume the hourly cost for internal payroll staff to be $36, these 72 hours translate into $2,592 per year.” (Jones, Marshall, 2013).
Procurement Disadvantages

* Less control including but not limited to late employee disbursements
* Security threats (see risks below for more detail)
* Some data may be less accessible

Risks

Risk of government reporting and employee withholding taxes are move to the vendor.

Major security risk by having another company having access to information such as employee social security numbers and bank account numbers associated with them as well as those associated with the business. It is very important to investigate how this information is protected. 

The company may consider other business areas for procurement in the future. There are risks to outsourcing which can include but not limited to lower levels of service, inferior quality outputs loss of control and adversely affecting deadlines, cultural misalignment and exposure to other economic and environmental factors. (Carlos Sanchez, 2010).

Starting outsourcing with an American company for payroll and tax services which has been one of oldest and most outsourced functions by companies will allow an introduce to create protocols and gain experience in what is becoming a popular alternative to in-house responsibilities. Companies have taken over an estimated 40% or more of companies both large and small in managing company’s payroll and tax services. (Marshall, Jones, 2013).

Scoring Matrix for Procurement Proposals

Criteria | Criteria Weight Percentage | Standards | Standard Weight Percentage | Measurement |
Basic Requirements |   | Mandatory reasons for exclusion | N/A | Pass/Fail |
| | Discretionary reasons for exclusion | N/A | Pass/Fail |
| | Insurance | N/A | Pass/Fail |
Quality and Capability with existing systems | 40% | Delivery of Corporate Objectives | 5% | Quality |
| | Completeness, robustness and systems interfacing approach | 5% | Quality |
| | Compatibility with existing environment | 10% | Quality |
| | Overall assessment | 10% | Quality |
| | Assessment of...

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