There’s no doubt that payroll becomes more challenging and complex for HR and finance departments as organisations expand globally. To ease the pain and to simplify global payroll, many multinational organisations outsource to a global payroll provider, with the following often the most quoted key reasons for the decision to do so:
To be confident that payroll will be compliant – in every country where payroll is needed
To standardise processes
To integrate international payroll with ERP/HCM systems
To decrease costs and increase efficiencies
To have a single point of contact, rather than multiple contacts in different time zones
For those with limited in-house resources and thus knowledge base, it is extremely important that when obtaining support from an external expert source, the providers being considered are very aware of the importance of compliant payroll. Not correctly following local legislation risks non-compliance, which can be costly in terms of corporate fines. Not least the impact of errors in salaries and wages on employees, especially with the increase in focus on employee satisfaction – minimising errors in salaries and wages, in turn minimises the potential for disgruntled employees.
Therefore, by partnering with experts with knowledge of local legislation, also able to support setting up in new jurisdictions, helps reduce complexities and allows for a smooth initiation when starting operations in another country.
Importantly, in terms of project timelines, organisations also want to minimise the potential for any delays with a quick and straightforward set up, which an experienced third-party partner enables. It is often apparent that HR will be one of the last departments made aware of an impending new international project and, as such, given a very tight timeframe in which to set up payroll in a new country. In such a situation, working with a trusted global payroll provider can reduce the pressure on the department, be cost effective, whilst ensuring payroll compliance.
Although the process of outsourcing and finding a trusted provider can be time consuming, in the long term, the benefits it provides for the business as a whole, such as savings in time and efficiencies, makes it very worthwhile.
For example, an important question to ask when sourcing a global payroll provider is whether they will be able to provide standardisation and simplify the payroll process for all countries worldwide. If keeping global payroll in-house is being considered, will the organisation have the personnel able to adapt to manage payroll in different time zones, and be able to manage different systems and reporting practices required in the different countries? Outsourcing these can allow for better standardisation and consistency of such processes around the world, which in turn will support a reduction of costs by minimising errors and increasing efficiency.
Bringing further cost reductions, the use of technology is something that cannot be ignored – and how the provider will be able to support an organisation to effectively facilitate it. Global payroll providers today are increasingly required to be able to bring to the table systems that can integrate with current in-house systems and align with the client’s business requirements. More so, the need for full system integrations for global payroll, HR and finance departments can help streamline processes, again bringing about standardisation and, therefore, reduce costs.
As well as standardisation for global payroll, one centralised – rather than many individual – systems covering all client countries around the world, also provides for greater visibility, reliability and control; everyone will then be working with the same data in the same environment.
Internally, the positive impact of the use of the integrated systems will also be seen through its capability to automate administrative tasks managed by the payroll and HR departments. By saving time on these tasks, employees can focus their attention on actions that will have a more positive effect on a business – such as maximising employee satisfaction.
Brian Medd-Sygrove – Chief Commercial Officer at Global EMS