Debbie Gibson, Head of Sales and Partnerships, activpayroll
Employees receiving their pay promptly and correctly is undoubtedly a core component of any payroll process – but it’s not the only one. Changing expectations means that payroll is shifting from something traditionally regarded as a back-office function to becoming more of a strategic business partner.
Business Scalability and Payroll
For teams operating globally, payroll processes need to be able to scale efficiently to keep up with business growth. Organisations don’t want to lose their ability to remain agile, and accessing data in real time remains central to obtaining, and responding to, insights from all areas of the organisation. Challenges around harnessing data can often arise when a system designed for a smaller business is used within a larger, or more disparately located, business – and risks data being siloed.
In businesses today, centralising data and breaking down these siloed barriers is a critical task when it comes to payroll, without it, manual checks can lead to human errors, and add to the risk that employees won’t be paid on time or that tax or compliance rules are overlooked.
Managing payroll on a global scale is complex and the greater the number of countries the greater the level of complexity and room for error. For rapidly expanding businesses, payroll becomes an increasingly resource-demanding task.
Using a payroll partner who can navigate these challenges gives an organisation increased confidence that their people can be paid on time. This is also true when it comes to considering talent management challenges and retention, as a study by UKG reveals that nearly 50% of employees will seek a new job after only two payroll errors.
There are also generational differences to consider in each workforce, with younger employees being much less willing to stay with their employer should mistakes happen, even if errors are corrected right away. And it is not just concerns around employees being paid on time that worries employers, regulatory and tax issues can also stem from a mismanaged payroll process.
Compliance in International Payroll
Legislation is always evolving and it can be more of a challenge to stay ahead of changing policies whilst central business resources get to grips with numerous, new legislative regimes. Tax legislation is complex, and there can be several levels of rules and regulations to follow in a single country, let alone across borders.
Compliance issues now go to the very top of organisations, with Chief Compliance Officers responsible for both ensuring compliance is achieved, and working with management teams to monitor the importance of payroll growth.
Outsourcing Payroll Services
Some larger companies have multiple payroll experts but many organisations looking to expand their international operations lack the expertise required. It’s costly to hire an internal specialist each time one is needed, so outsourcing the job to external specialists in the form of Multi-Country Payroll providers (MCP) allows for flexibility and increased levels of cost efficiencies.
MCP providers can help to consolidate solutions regardless of location, using centralised control and standard procedures. Using multiple providers means multiple processes, so it’s not easy to manage a payroll process, so using one provider ensures consistency when it comes to the processing of information, regardless of country requirements. If the fundamental processing of data is not managed effectively then the rest of the process will not function efficiently, which leads to more problems.
The need for local expertise will only increase as organisations continue to expand internationally, explore new markets and connect with an ever evolving customer base. Successful future payroll systems will depend on the ability to harness local expertise, which is not an area that AI has the ability to solve.
The Power of Payroll
A good payroll process comes down to the partnership that exists between the client and their provider. Change takes time, and businesses need partners who can manage them long term, who are reliable and can support them in the challenges that they could face. Partners should become an extension of their clients, helping their varying needs and offloading many of their critical payroll and HR tasks to make the process more seamless.
For even the most experienced of payroll professionals, the administrative burden can be enormous and, as a result, human error is often unavoidable. Technology can greatly reduce room for error, but it’s only one part of the puzzle. What complements technology is adding the human expertise to overcome the hurdles that are associated with multi-country operations. Organisations can spend years trying to figure out how best to manage global payroll operations, but sometimes, the right partner is all they need.
