Contractual Staffing 101: Why Third-Party Payroll Services Is a Win for Employers

To cope with the pressure of onboarding, compliance management, issuing offer letters to temporary employees, termination formalities, businesses hire contract staffing companies in India who also offer 3rd party payroll services. This partnership offers several benefits to businesses.

As your business grows year-after-year, so will your employee strength. In such a scenario, it’s best to reach out to a contractual staffing firm offering third-party payroll services.

Startups, corporates, small and medium-sized enterprises leverage third-party payroll services to cope with the excess demand (for employees). 

This move helps companies become more economical in the long run. 

How exactly? Let’s dive in and take a look. 

Benefits of Third-Party Payroll

Contract staffing in India is not an age-old method. It’s a rather new way of hiring which, in recent years, has found success and popularity amongst businesses. 

Mostly for the services offered, which are tailored to meet business’ requirements. 

Onboarding, compliance management, 3rd party payroll services, issuing offer letters to temporary employees, and even termination formalities are handled by contract staffing companies in India.

Of course, they charge a fee. But hiring a contract staffing agency for 3rd party payroll services makes a lot of sense as you get a lot of benefits in return. 

Here are 4 such benefits.   

  • Time Saved

As we all know that prospecting, screening and recruiting the right talent is time-consuming and a lengthy process. So, outsourcing it to a third party payroll management partner saves time.

  • Expenses Reduced

A contractual staffing partner has a ready data pool and infrastructure framed by payroll and compliance experts which enables them to hire at a lower cost.

  • Experts at Work

Contractual staffing partners specialise in having an in-house team of experts who handle recruitment,  payroll and compliance, and employee management.

These firms ensure that they monitor constantly changing regulations and government norms.

  • Peace of Mind

By choosing third party payroll services, you literally wash your hands of, among others, paying salaries, managing compliances, remitting payroll taxes, maintaining payroll software, and generating reports for in-house use.

Everything is taken care of; freeing time and resources for you to accelerate business growth.

You Must Know: Who Should Opt for Third-Party Payroll?

Any business entity signing up with a reputed contractual staffing agency offering excellent third party payroll services stands to gain. 

And it’s not just the employer — employees too benefit. 

Below are some entities that advocate payroll services.

  • Employers/business who can’t manage salaries, employee benefits, tax processes
  • Employers who don’t find enough time and/or don’t have an in-house skilled team to hire candidates or manage end-to-end recruitment
  • Candidates who want to work with high-value clients, but don’t have enough hands-on experience. These are mostly freshers, students, and recent graduates 
  • Candidates who are willing to work for a short tenure on a contractual basis.

Businesses Ideal for Third-Party Payroll Services

  1. IT Companies (Including Banking, Hospitality and Finance etc. domains) 
    • Software and
    • Hardware
  2. Non- IT Organisations (Including Retail, Construction and Pharma etc. domains)
  3. BPO Sector (Including Voice/ Non-Voice/ Customer Support and Service domains)

Payroll is a time-consuming non-core business function. And by non-core, it does not serve as a centre for profit, however essential it may be. For this reason, businesses have long favoured outsourcing it to third-party payroll agencies. 

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Rishabh Ranjan
Rishabh Ranjan

I have 10 years of experience in SEO, Digital Marketing, Content Marketing, and have knowledge in topics like tax, HR, Recruitment & Staffing. When I’m not doing what I do, I suit up, flick the ignition on my bike, and hit the road. But soon enough, I’m back doing what I do best — researching, writing, marketing, and optimizing the content & website.


  1. comment-author
    Smirithi Maya

    Yes, your blog nailed it. Many small business entrepreneurs are still not focusing on outsourcing their payroll services. By outsourcing, you save time, control costs, ensure enhanced accuracy, and minimize compliance risk, without having to give it a second thought.

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