Smart enterprises know that employees are the best asset and need to be managed professionally. One may set up an HR department but who will manage the HR people? Then there are other HR issues to consider all of which point to outsourcing HR as the most viable alternative.
Complications in payroll management grow when the number of employees in a company goes up. Companies may employ people on monthly salary, contract and on daily or weekly wage basis and these further add to the burden. Payroll is not just calculation of money to be paid for work done. There are additions and deductions to be considered as well as compliance with myriad government regulations that keep changing from time to time. The HR department has to be competent but the entire process easily can be outsourced.