Payroll outsourcing market in Romania has continued to increase in 2013 (Press release)
After an astonishing increase of 110% in the last 5 years, payroll outsourcing market is continuing its course and in 2013 has reached over 170.000 processed employees, an increase of around 15% according to Accace estimations.
“Payroll outsourcing market in Romania has increased significantly in the last 5 years, starting at around 70.000 processed employees in 2007 and has reached around 150.000 processed employees in 2012. The number continued to grow in 2013, with an estimated 15% compared to last year”, specified Bogdan Badea, Managing Director of Accace in Romania.
The main reasons that led to this increase have been: data confidentiality at company level, cost reduction and the additional benefits offered by companies providing such services in payroll area.
“Outsourcing market has passed its initial experimental years; therefore we can notice already a wide variety of providers on the market covering all categories of prices and services. Moreover, companies started to understand what are the real benefits brought by an outsourcing company through its additional consultancy services and the number of requests on this area have increased significantly during the last years”, mentioned Bogdan Badea.
Despite its outstanding development compared to the rest of the countries in the region, Romanian outsourcing market is not as mature as the ones in Czech Republic, Slovakia, Hungary or Poland, where the market already reached an equilibrium.
„The Romanian market will eventually reach its maturity and the current differences in terms of quality of the services rendered will be diminished, mostly because clients will decide to end cooperation with providers who cannot maintain a constant quality of the services. Also, in this competition between providers, an important role will be played by social media channels that allow users to access the latest information regarding desired service or product directly from those who have already tested it. Transparency and accessibility will therefore be crucial for the end user”, added Bogdan Badea.
The fields less open to outsourcing services in Romania are: public institutions, constructions and HORECA
At local level, companies from various industries choose to outsource their payroll and personnel administration, but the less interested in such services are: public institutions, constructions and the hotel, restaurant and catering sector (HORECA).
“In areas such as constructions and HORECA, black-market work is still an issue that affects the entire economy and therefore also the low request of payroll outsourcing services. As for public institutions, the main obstacle that stands between them and payroll outsourcing companies is the lack of transparency, because the wages level for these institutions is still a sensitive subject”, has explained Bogdan Badea.
The benefits and risks of payroll outsourcing
One of the major benefits of payroll outsourcing is the fact that the provider bears the responsibility for any errors that might occur. Moreover, there are clear deadlines established for responses and the communication process on behalf of the company with the local institutions is very transparent. In addition to an internal department, the companies who chose outsourcing benefit also of professional consultancy and legislative updates, as well as free software updates, the provider being the one who is in charge with such technical implementations.
On the other hand, there are also certain risks involved when choosing a payroll outsourcing company. For example the bad communication between client and provider resulted from the lack of proactive approach of the latter, which is only processing the data, could affect the decisions taken at management level and thus the overall business activity of the client. Moreover, not many clients receive from their providers real-time data access via a specialized software.
“Probably one of the biggest risks for both provider and client is the missing professional indemnity, which in case of service delivery errors, omissions or other similar mistakes from the provider’s side, could damage the client who chose the payroll outsourcing service and could lead to serious and lengthy disputes, as well as unnecessary financial losses”, mentioned Bogdan Badea.
Press release – Accace Romania – www.accace.com
More about Accace Company – Originally established in the Central and Eastern Europe, Accace set out to offer clients top-quality services by knowledgeable professionals at reasonable rates. Over the years Accace became one of the most dynamic outsourcing and consulting companies operating within the region.