By 2011, there will be major changes in the environment for payroll outsourcing/PF consulting agencies.
Consider the forces gathering like looming dark clouds:
- compulsory e-filing for PF, ESI, income tax, etc.
- competition from big agencies offering online payroll services
- customers demanding better quality, online access, and employee self service
- further commoditization of an already commoditized business
- a wave of consolidation leading to survival of the fittest
e-filing of returns
CBDT already expects companies to file their returns online. With UTN numbers on the anvil, things will get even more intense. ESI is mid-way in its ambitious computerization drive. They have already started rolling out a few services. PF department is getting its act together and will follow suit. And so too the other departments.
In such a scenario, it is not possible to work with a manual system or with Excel spreadsheets. You definitely need some kind of specific software applications to get the job done.
Competition is hotting up
With growing Internet penetration, big agencies now have an effective distribution mechanism to address a larger customer base. With technology as a competitive advantage, they can play the volume game and easily drive small agencies out of business. It's also about brand vs. small time player. Think of Reliance Retail/Big Bazaar versus the kirana store.
Customers want more
Customer expectations are growing. They want it faster, better, cheaper. They expect online access to their information. They want the interaction to be streamlined and hassle-free. They don't want to pay for travel and miscellaneous expenses. Many want employee self service options.
Evolve or perish
In this changing environment, there will be many losers and a few winners. Like the typists or tonga-wallahs of yore, some agencies are destined to go out of business. Their business will erode with the big agencies luring away their customers with better features and lower rates. There will be a wave of consolidation.
The winners will evolve and keep pace with changing times.They will adapt the new style of doing business. They will satisfy their customers' needs and deepen their relationships. They will also move up the value chain. They will be able to effectively differentiate their services and escape commoditization.
What can be done?
Is it inevitable? Can anything be done to face up the challenging times?
A lot can be done. In fact, the big guys can be kicked in their collective behinds with nimble players who can offer a high-tech, high-touch experience to their customers.
How? Three steps:
- Awareness: Be aware of the changing environment. Do a SWOT analysis. Recognize the threats.
- Embrace change: Start adapting to the changing environment. Get out of your comfort zone and stretch yourself. Re-learn & reorient.
- Equip yourself: Increase your customer focus. Get an online presence (website) for your business. Invest in enabling tools and technologies.
Partner with us
One good option available right now is to partner with us.
At Greytip Online, our strategy is to focus on the software side of the business and let expert professionals handle the client side of the payroll service business.We don't compete with payroll services providers to ensure there is no conflict of interest.
- We enable payroll outsourcing companies to drastically improve their productivity, increase capacity and deliver to their customers accurate and high quality payroll services.
- But that's just for starters. You can differentiate and move up the value chain. Move up a notch by providing online access to customers for streamlined collection of inputs or self-service reporting by customer.
- Climb higher by offering employee self service options, trouble tickets, online IT calculators, reimbursement claims, leave management.
- and much more...
