Company leaders are focusing on ways to grow and stay competitive. Expanding globally is a way to expedite this growth strategy, and many organizations are completing mergers or acquisitions to make this happen. With this growth comes the need to quickly and accurately pay employees located across multiple countries.  

Making the complex simple: Trends and best practices for managing international payroll

Company leaders are focusing on ways to grow and stay competitive. Expanding globally is a way to expedite this growth strategy, and many organizations are completing mergers or acquisitions to make this happen. With this growth comes the need to quickly and accurately pay employees located across multiple countries. 

Employers are struggling with managing multiple payroll processes for global employee payroll data. A Forrester Research survey found that 37 percent of organizations employ between two and four systems to manage such information.1 HR leaders are centralizing payroll systems, standardizing payroll processes and turning to providers for help in order to remain compliant and to meet merger and acquisition deadlines — without sacrificing accuracy and budgets that are already tight.

Morgan-Yeates.jpg“Expanding business operations into multinational markets creates its own challenges for paying employees due to differences in regulations, culture and languages. But this growth often exposes weaknesses in the existing payroll administration environment that may require replacing payroll systems and redesigning processes,” said Morgan Yeates, BPO Research Director for Gartner Group.

Employers can be confident and compliant in the world of multinational payroll by following best practices while ensuring that their back-office operations support corporate growth.

 

Best practices for multinational payroll execution

With international payroll processing, the complexities are immense. Each country has different regulatory, tax and language barriers in such areas as taxable items, withholdings, garnishments, liens, reporting and deadlines that organizations must immediately address and continuously monitor. Additionally, countries possess differing standards related to data security, fund transfers and employee communication.

IPS-Map.jpg“For many companies today, the complexities of adding multinational workers lead them to keep local payroll solutions in place – creating even more complexity and increasing risk. However, international expansion can be a stimulator to look for commonalities and consistencies among payroll processes and policies.  If these are leveraged, management of multinational payroll is both easier in the immediate term and capable of faster future growth,” Yeates said.

Ceridian has found that company leaders who successfully manage multinational payroll adhere to specific best practices:

  • Recognize the complexities of global execution. As your business expands beyond its borders, you need strong controls and governance. Your systems must deliver.
  • Speak their language. It is important to communicate in the native language of the various countries in which your employees operate.
  • Ensure that you possess strong, specific payroll expertise. Local laws and regulations can be complex. Also be aware of the impact of differences in local pay practices, policies, currencies and time zone.
  • Standardize on a global basis. Once you execute payroll in multiple countries, you must pull it all back together to aggregate expense. Seek global access to reporting and analytics.
  • Manage the costs of technology acquisition and maintenance. Maintenance and acquisition can happen quickly, so it is important that your payroll administration solution and its technology can flex and scale appropriately.
  • Take action to ensure data privacy and security. Standards differ widely, and regulations change. Be prepared.

“Payroll is something that companies have to do correctly every time. During times when organizations are merging, acquiring and expanding internationally, it is more important than ever that the new employees trust and support the organization. You must ensure that all employees receive consistent and accurate payroll service across the global organization,” said Marco Martin, vice president of international payroll solutions for Ceridian.

 

The value of outsourcing your international payroll

The outsourcing of back-office payroll can deliver value quickly. Do not underestimate the impact of a team that understands cultural issues, local laws and payroll regulations, regional languages, specific currencies and time zone differences.

With the right payroll solution, companies that have expanded internationally can efficiently and accurately manage the payment of their international employees. A consistent service model supported by payroll experts for each country, whether they are in Europe, Asia or the Americas – enables you to be confident that your payment processes are compliant, accurate and delivered with a high level of care,” Martin said.

By applying best practices, Ceridian International Payroll Solutions is able to deliver value in just months.

The best multinational payroll solution providers help employers simplify a complex environment while keeping costs low. You need not settle for less.

 

For more information:
  • Register for our “Paying employees abroad” webinar
  • View our infographic

Visit Ceridian at the APA Congress, booth #901. Fill out our 5-minute survey and be entered to win 1 of 3 brand new Vespas!

Footnote:

1. “Manage Master Data About Your People,” Forrester Research, Inc., October 26, 2011