Payroll Processing: Outsource or do it In-House

The main objective of the study is to evaluate cost efficiency for GAR HR SSC for payroll department in Intel Malaysia and the payroll analyst's work efficiency. This is to see which methods could bring cost saving. Other than that, comparison of the two methods will be used to evaluate which process is effective for payroll processing in terms of time saving and efficiency. In order to meet the objectives, quantitative approach was used for data collection. Research instrument for this study is unstructured interview with payroll analyst and retrieved information from database. For this research, system has been built by using closed loop outsourcing decision model to do internal and vendor assessment. It has been used to help in making assessment for this study. Input will be entered into the system to get output whether to outsource or in-house advance pay processing. The cost analysis will be used to get return of investment either positive or negative. The result show that in-house advance pay
processing could bring cost saving and comparison of the two methods show that in-house can save time and eliminate some processes in completing payroll processing for advance pay. In summary, research show that in-house processing for advance pay could bring cost saving. This means, it can give positive return of investment in the long term. Other than that, by using in-house processing it can shorten processing time and eliminating unnecessary waste in processing advance pay. With that, payroll analyst's work will be more efficient and effective. Thus, Intel GAR HR SSC for payroll department should continuously revisit annually for GAR pay slip volume, process simplicity and operation cost to assure overhead and contract price stay competitive with quality services if they would consider with outsourcing. Suggest that human resource to conduct yearly operations review on reducing contracted cost with payroll vendor.