What is the Difference between Payroll & Staffing Services?

Payroll is an intricate process which involves calculating and distributing employee wages and related taxes. Staffing and payroll might seem similar but are two very different processes. Staffing includes recruitment, selection, payroll and other related processes. Most of the organizations opt payroll and staffing service providers to make the processes easier. Although both these providers might offer payroll and staffing services, outsourcing payroll and outsourcing staffing processes are totally different. Payroll service providers are limited to provide payroll and other compliance services whereas when staffing is outsourced, the service provider is committed to providing a complete recruitment life cycle.

What is Staffing? 

Staffing can be understood as the sustainable addition of employees in an organization. It encompasses all processes which come between building and retaining employees in a company. Staffing can be further divided into following stages: 

Planning - Determining the workforce requirements, skills and qualities expected from them.

Recruitment - Searching for possible prospective employees and creating conditions for simulating and maximising no:of applicants.

Selection - Shortlisting eligible candidates with right skills and qualifications.

Induction and orientation - Aligning the new joinee with organizational structure and work culture.

Training - Training and educating employees for the job roles.

Performance tracking - Reviewing job performances and work contributions

Employment decision – Take decisions regarding every employee’s promotions and career planning.

How is Payroll different from Staffing? 

Payroll processing can be divided into 3 stages -- Pre payroll activities, Calculation and Post payroll processing. The major objective of payroll processing is to calculate the net pay for employees by deducing tax deduction from gross income. The three stages of Payroll are explained in the below graphic.

Payroll processing includes developing company’s pay policy, which includes employee benefits, leave policy, leave encashment etc. Managing basic pay, variable pay, HRA, LTA etc are also included in this. Payroll managers collect payroll inputs from various departments and finally release employee salary after deductions. They are also responsible for filing returns, deposits and dues such as TDS, PF etc to respective authorities. 

It is always better to payroll employees through a staffing provider or team who handles staffing along with payroll. Both the services are connected to each other and have a significant role in the company's growth and management. 

Advantages of outsourcing Payroll and Staffing

Employees are the greatest assets to every organization. Proper hiring of workforce and management is vital for the growth and success of the company. Outsourcing staffing services to an experienced provider helps to ensure that you are hiring the right people to the team and are managing their adequacies properly. Some of the major advantages of outsourcing staffing are -- accessing better talent, faster hiring, economic when considered long term, hiring flexibility, and leveraging temporary to permanent options. 

While selecting a staffing service provider, never compromise on quality and experience. Ask referrals and learn about their business rating before choosing any third party staffing or payroll provider. And make sure you periodically ask for reports and other measuring metrics to ensure the proper working of the services provided by them.