Choosing Cloud Payroll vs Payroll Outsourcing in Indonesia

The COVID-19 crisis has forced companies in Indonesia to rethink and redefine their work processes like never before, including in the area of people operations, i.e. how companies manage the day-to-day processes and the productivity of their teams. If you are a company operating in Indonesia, you may be thinking of ways to manage your HR operations such payroll outsourcing being efficient during or post COVID-19 era. 

The Case for Cloud-based HR and Payroll Applications

Digitalization is long overdue in payroll and HR operations, and the current crisis only highlights it even more. As lockdowns force employees to work from home in a distributed manner, it is nearly impossible to work with a non-centralized payroll and HR database — especially since the government is releasing frequent updates to HR-related policies such as leave rules (cuti bersama), tax (Pph 21) and BPJS.

Also Read: How This Indonesian Startup Has Helped Thousands Company to Calculate Payroll Automatically

Companies with traditional payroll IT infrastructures such as fixed workstations and payroll systems hosted in the company’s data center (on-premise system) will face challenges as everyone is shifting to remote working. This challenge will even trickle down to the decisiveness of the management team to create a Business Continuity Plan (BCP).

In contrast, companies that already implemented cloud-based Human Resource Information Systems (HRIS) are able to adapt quickly and effortlessly to the current remote working setting, resulting in minimum disruption to the general business operations. 

Adopting a self-service cloud-based HR and payroll software such as Gadjian is the best option for companies running on a shoestring budget. Pay-per-use charge allows you to be compliant to local regulations, stay on top of your employee database, payroll as well as employee tax calculations while at the same time minimizing the needs for a tax consultant.

Payroll Software Indonesia Untuk Mengelola Keuangan & Karyawan Perusahaan, termasuk perhitungan PPh 21, perhitungan BPJS, dan perhitungan lembur | Gadjian

The Case for Payroll Outsourcing Service

You may find it more convenient to outsource the payroll function altogether. This may be the case if your team in Indonesia is a “skeleton” team that focuses on key functions, such as sales or IT development. In this case, finding a partner that handles end-to-end payroll processes may be the better way to go so your local team can focus on their key roles. As an example, several startups from Singapore, Hongkong, China, Korea and other countries have opted to outsource their payroll and HR administration to Pegawe, the payroll outsourcing arm of Gadjian. Outsourcing allows them to focus on expanding their business locally without having to worry about the continuity of payroll and tax payments, which are nevertheless critical business processes. 

Due to the manpower required to render the services, Pegawe charges a fee on top of Gadjian subscription. However this fee is insignificant compared to the value of being able to grow your business in an efficient manner.

Try Pegawe Now | Payroll Outsourcing Service From Indonesia's #1 Cloud HR Software

Writer: Haunina K. Sari

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