By 2011, there will be major changes in the environment for payroll outsourcing/PF consulting agencies.
Consider the forces gathering like looming dark clouds:
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.
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.
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.
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.
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:
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.