The key trends driving change in global payroll

Global payroll delivery and management at multinational companies around the world is changing-the biggest reason for this is that it simply has to change as the current way of doing things is unsustainable for organizations with growth and scaling agendas.

Every company wants to grow, and it is becoming abundantly clear that to do so effectively and efficiently, they require a global payroll model and process that can keep pace with their ambitions and facilitate the level of growth required.

The result of all of this, is that there are a number of key drivers leading to a call for change in how multicountry payroll services are delivered and managed. In this article, we are going to examine a few of these key drivers and look at ways that global employers can respond to them in a positive way.

Driver 1: The need for automation

At Payslip, we never cease to be amazed by the number of modern organizations that still rely on manual inputs and processes to deliver their payroll. These same organizations often display significant digital innovation in other business departments but seem content for global payroll to remain stuck in the past.

Manual entry, complex excel spreadsheets and data transfers via email are commonplace in their payroll process. The result of this is frustrated global payroll professionals, non-secure global payroll data and unsustainable workflow processes. The need for automation in global payroll data has never been higher and it is a key driver for change right now.

Progressive organizations are responding to this driver for change by choosing to move their payroll process into a cloud-based digital environment where automation removes the need for tedious manual inputs. When payroll is digitized and automated, bulk files containing thousands of inputs of employee data are uploaded, analyzed, checked and validated in seconds. This is a huge time saver which massively reduces the likelihood of human error with data input. Payroll errors can be problematic so the need for automated payroll data validations to eliminate the scope for human error is a key driver.

Automations can also be used to transfer data between global payroll software and connected systems like finance and HR. Everything about global payroll management becomes faster, more accurate and smoother.

Driver 2: The need for standardization

Non-standardized data and processes is one of the key reasons for the challenging level of complexity in multi-country global payroll delivery today. Growing companies need to move into new countries, and territories-this means hiring new staff and then engaging with local country payroll providers to make sure the new staff are paid accurately and on time. More people to pay, more data to process, more systems to manage usually means more complexity and payroll inefficiencies.

Implementing a standardized approach to data and processes across all of your payroll countries will go a long way to removing the complexity of day-to-day payroll calculation and delivery in the payroll system. If the data formats and the processes are the same across countries, visibility and control is immediately enhanced-you can actually see what is happening across all of your countries.

This is about taking all of the data from the various source inputs such as payroll providers and HCMs, then categorizing it and standardizing it all at a global level. When you implement standardization in this way, you then have a solid base to add new countries and payroll providers to your process, quickly and efficiently. Your payroll teams across countries are operating with the same data and processes and everything becomes easier and more manageable inside the payroll function.

If you are currently struggling to get a handle on the complexity of your multi-country global payroll, and you work in an organization with strong growth ambitions, then it is very clear that the need for standardization has never been higher. Problems exist right now due to a lack of standardization and these problems are only going to increase in complexity if you fail to introduce standardization-the time to act is now.

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Driver 3: The need for integrations

Data needs to be shared between global payroll, human resources systems and the finance department. These are separate yet interconnected business functions where data sharing is needed for accuracy as well as bigger picture insights and consolidated reporting.

The problem at many multinational companies is that these departments operate separately and in silos despite the obvious need for data sharing digital capabilities. Sometimes it is a case of a digital transformation project that never gets off the ground or focuses on one business unit instead of all three. The result is disconnected data flows and a lot of manual duplication of data between the disparate systems. ?There is a need for payroll technology and payroll transformation to become part of the global payroll strategy.

Things could be a lot better and more efficient-the answer is integrations which connect payroll to HCM and finance software. When you digitally integrate payroll with HR systems & HCMs, you can implement automated bidirectional data flows-removing the need for duplicated data entry. The data in payroll that is relevant to HR flows seamlessly from the payroll software into the HR software and vice versa. Finance can also integrate and connect their systems to payroll and HR, and this paves the way for them to extract the payroll and HR data they needed for bigger picture insights reporting.

The lack of integrations means there is no opportunity for operational efficiency or execution excellence in international payroll delivery. You simply have to continue with payroll teams duplicating data across systems and wondering whether your single source of truth comes from your payroll software or your HCM system-the answer of course, is that without digital integrations, neither of these can offer the single source of truth because there will always be trapped data in each system.

Driver 4: The compliance challenge

Global payroll compliance is like any other form of compliance-it is mandatory and non-negotiable, and any failures will result in significant reputational damage along with financial penalties. In growing organizations, already complex payroll delivery stretches into new countries, and territories-this means new local labor laws that have to be adhered to as well as individual country tax and benefit nuances that need to be managed.

A digital system or global payroll control platform needs to be introduced to manage all of this complexity and ensure that your organization is not in breach of payroll or labor law compliance. Digital tools, compliance calendars, digital audit trails and dashboards can go a long way to achieving the level of visibility and control that can give payroll and HR managers reassurance that they can meet their compliance obligations on a consistent basis. Without this level of digitization, it can be very difficult to keep track and say with certainty that you are compliant in a specific country or region.

Compliance is a key driver for change in global payroll as more complexity is coming due to the changing nature of work culture and the office environment. Remote working and a work from anywhere concept brings with it significant legislation and regulation that needs to be monitored. There is also an explosion in unique and nuanced compensation and benefits packages. Tax laws and privacy regulations are changing on an almost quarterly basis-there is a lot to keep on top of and large organizations now have entire teams dedicated to compliance and those people are seeing significant gaps in the process when it comes to global payroll compliance.

There are other drivers for change in global payroll delivery and management, but these are four that we are seeing time and time again in the payroll departments of our global clients. The Payslip global payroll control platform was designed specifically to address these key drivers and solve the challenges associated with them. Our team is ready and waiting to demonstrate how our platform can solve these challenges and introduce speed and efficiency to your payroll delivery today-it's time to talk to us.

This article originally appeared on payslip.com