The Rise of Managed Payroll Services: Why Connecticut Businesses Are Making the Switch


In the highly competitive Connecticut business world, companies of all sizes turning to creative solutions to remain competitive. While keeping abreast with constantly changing tax laws, to the proper payment of employees, it is a time-consuming process that involves a lot of risks. Payroll has evolved into something beyond just a back-office task for many companies, it is a strategic process with legal, morale, and productivity implications. That is why many companies are shifting their attention towards outsourced payroll services, as a more efficient and effective solution.

Did you know that nearly 40% of small and medium businesses incur payroll penalties each year due to compliance errors? Outsourcing payroll can not only prevent you from making costly errors but also save you time to work on other aspects of your business. It’s not just a luxury, but a necessity – it helps to avoid mistakes, save time, and open new opportunities. 

If you’ve been handling payroll in-house, you’ve likely faced the headaches: long calculations, frequent changes in taxes, and the possibility of missing something important on the way. But think of having all these tasks managed by professionals who deal with payroll processing to ensure that the process is as smooth as possible. Whether you are a small business trying to save time or a big business trying to expand, one thing is clear – the secret weapon for businesses is managed payroll services. Now let’s take a closer look at a few reasons why now might be the best time to make the switch.

The Payroll Puzzle: Why Businesses Struggle with In-House Management

Complexity and Compliance

Are you aware that payroll mistakes cost organizations billions of US dollars every year? Time overruns, schedule slippages, and failure to meet state and federal requirements are some of the mistakes that in-house teams make. Some of the challenges that Connecticut businesses experience include; compliance with intricate employment laws and the need to conform to changes in minimum wage.

Time-Consuming Processes

Manual processing of the payroll is time-consuming and requires a lot of effort and input. This is an area that small business owners spend a lot of time on, instead of working on growth-related activities.

The Risk of Errors

Payroll errors that have resulted from human mistakes can cause big losses in fines and loss of morale amongst workers. One research conducted showed that about 49% of the employees would start looking for a new job after suffering from payroll mistakes. Precision is crucial, and this is among the many factors explaining why organizations are moving to payroll outsourcing services.

Why Connecticut Businesses Are Choosing Managed Payroll Services

1. Cost-Effective Payroll Solutions

Outsourcing payroll isn’t just a convenience; it’s a smart financial decision. Outsourcing of managed payroll services reduces the costs of purchasing software, hiring more staff, and training them. Businesses report saving an average of 20% by partnering with a payroll provider.

2. Enhanced Payroll Accuracy

There can be no room for error when it comes to determining the pay of an employee. Outsourced payroll companies have the capability of minimizing errors through the use of technology and specialists. This reduces the likelihood of payroll discrepancies and penalties.

3. Streamlined Compliance

Maintaining compliance with emerging tax laws and labor relations is quite challenging. Managed payroll services mean that you can always get professionals to help in the compliance of your business in terms of taxes and employee benefits among others.

4. Time Savings

Outsourcing the service means that you can save a lot of time that could otherwise be used in achieving other objectives like growth of the business, and satisfying the customers. Imagine how much more you could accomplish with less payroll interference.

5. Access to Latest Technology

Payroll providers come with a wealth of knowledge and advanced solutions. These services range from integrated solutions such as time tracking to human resource information system (HRIS) services to professional services that are offered by dedicated individuals to improve operations. It allows businesses to use the newest tools and equipment without having to make or spend money on them to get the payroll process right.

When you decide to outsource your payroll services to OEM America, you are not just paying for a service that will handle your payroll, you are paying for a company that will go out of its way to understand your needs and provide the best solutions to fit your business.

Statistics That Prove the Value of Payroll Outsourcing

Here are some compelling numbers that highlight the benefits:

  • Cost Savings: Businesses with 50 employees can save up to $10,000 annually by outsourcing payroll compared to managing it in-house.
  • Growing Market: The global payroll outsourcing market grew from 17% of businesses in 2015 to 38% in 2019 and is expected to expand by $6.15 billion by 2025, driven by increasing demand for expertise and efficiency.
  • Error Reduction: 25% of employees report receiving paychecks with errors, while 49% leave their job after just two payroll mistakes. Outsourcing ensures accuracy and reduces turnover risks.
  • Time Efficiency: One-third of small businesses spend over 6 hours per month on payroll. Outsourcing can cut payroll processing time by up to 75%, allowing businesses to focus on growth.
  • Compliance and Risk Mitigation: Misclassified workers lead to significant IRS penalties, with $7 billion collected in payroll errors in 2021. Outsourcing minimizes compliance risks with expert oversight.

The Hidden Benefits of Payroll Outsourcing

Personalization and Support

One of the myths about outsourcing is that it equals losing control. However, most Connecticut payroll services provide customized services depending on the needs of the business. Whether you are a small business just starting or a large company, you will find a team willing to address your concerns.

Integrated Solutions

In addition to the payroll services, many payroll outsourcing providers offer much more. They provide related services such as time, benefit, and compliance solutions, making it easy for the client.

Business Growth Enablement

Outsourcing is not just about cost savings; it’s about allowing growth. When you have more resources and time, you can allocate more money to employee training and development, marketing, or product differentiation.

What Can Be Outsourced in Payroll Management?

When outsourcing payroll, businesses often delegate the following tasks:

  1. Employee Payroll Setup: Safe and efficient storage and filing of employee data.
  2. Salary Calculations: Promoting a methodical approach towards the computation of wages for the employees.
  3. Paycheck Generation: Issuing paychecks and doing it effectively.
  4. Income and Tax Withholding: Accurate computations of deductions and payment of taxes.
  5. Tax Filings: Filing tax returns on time and free from mistakes that attract penalties.
  6. End-of-Year Reports: Managing W-2s, 1099s, and other essential declarations.
  7. Employee Benefits Management: Simplifying health insurance deductions, retirement plans, and many others.
  8. Recordkeeping: Filing and keeping track of records of employee’s wages and salaries.
  9. Compliance and Legal Requirements: Compliance with the tax laws and labor laws to reduce the level of risk.

How to Choose the Right Managed Payroll Provider

Switching to managed payroll services is a big decision, but finding the right partner is key. Here’s what to look for:

  • Experience in Connecticut – Local expertise ensures compliance with state-specific regulations.
  • Comprehensive Services – Choose a provider that offers integrated HR and payroll solutions.
  • Customer Support – Reliable support is essential for a smooth experience.
  • Proven Track Record – Look for testimonials or case studies that showcase the provider’s success with similar businesses.

Managed Payroll Services Are the Future

The complexity of the payroll increases as the business expands. When managed internally, they result in wastage of resources and may lead to loss-making situations. Outsourcing also has the added advantage of freeing up the company to do what it does best – providing customers with their products and growing their business.

Connecticut businesses have already started the transition, getting the benefits of accuracy, cost reduction and efficiency. Do not your business deserve to be among them?

Your Next Steps to Payroll Efficiency

Outsourcing payroll is more than a cost-saving move—it’s about freeing up time and energy to focus on what truly matters: growing your business. A good payroll service not only processes the pay but they are also responsive, knowledgeable about the tax laws, and provides you with the means to manage your payroll efficiently.

At OEM America, we understand this process to be as complicated as it sometimes is, but we also understand how to make it easy for you. Having worked with Connecticut businesses for many years, we provide customized services that will be precise, legal, and stress-free. No more care about payroll, just about professional and effective service you can count on.

Ready to make the switch? Let’s discuss how you can make it easier for you to achieve your business objectives by reducing the workload. Call us now to learn more about our payroll services and to begin the process of simplifying your payroll.


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