Regardless of the number of countries in which you operate, paying employees remains one of the most critical functions of your organization. Your business cannot operate effectively if you are unable to accurately, timely and compliantly pay your employees. Multinational companies face even greater challenges when it comes to paying employees because of the increased complexity.  

Trending Now: 5 Top Payroll Practices for Multinationals

Regardless of the number of countries in which you operate, paying employees remains one of the most critical functions of your organization. Your business cannot operate effectively if you are unable to accurately, timely and compliantly pay your employees. Multinational companies face even greater challenges when it comes to paying employees because of the increased complexity.

Gaining visibility into the inner workings of your international payroll processes is an important first step in improving your business operations, efficiency and effectiveness.

Jon Ziglar, managing director, International Payroll Solutions at Ceridian, says, “In today’s market, global companies are growing faster than ever. It is vital for organizations to have tight control and clear visibility into their payroll to support the company’s growth strategy.”

The Hackett Group, in partnership with the American Payroll Association, has conducted annual global payroll performance studies since 2006. Results from its 2013 study suggest that minimizing risk and operational costs, while maintaining the necessary agility to respond to corporate growth, are ongoing challenges facing multinational companies. Understanding how your organization performs relative to top companies can shed important insight into how you can improve your global payroll processes.

5 best practices for managing international payroll

Total cost per employee

According to The Hackett Group’s findings, top performing companies, as evaluated based on revenue, income and employee headcount growth, maintain a significantly lower total cost-per-employee than their less effective peers. The total cost-per-employee for top performing companies is roughly $60.36 versus $169.66 for peer global organizations. See how your organization stacks up against top companies who follow these best practices:

  1. Adopting a globally-managed service delivery model

Innovative multinational organizations are typically early adopters of new processes, such as implementing new global service delivery models for payroll. Jeitosa Group International, in its global payroll benchmarking study, found that high performing organizations are significantly more likely than low performing counterparts to have implemented a new service delivery model within the past three years and are also more likely than others to adopt a more globally-managed payroll delivery model.

  1. Establishing global lines of payroll authority

According to The Hackett Group’s findings, 38 percent of global companies have an enterprise-wide payroll process owner, which makes it much easier to execute an enterprise-wide payroll strategy, as well as gain support and buy in for enterprise-wide projects and initiatives. Moreover, the study found that 82 percent of global companies have some level of governance in place to ensure enterprise-wide data standards and vendor oversight that tie into the goals and objectives of the broader company.

  1. Planning for or in the process of reducing the number of payroll vendors

In an effort to streamline processes, it is no surprise that top organizations are significantly more likely (42 percent) to be currently planning for or in the process of reducing their number of payroll vendors to as few as possible across the globe, according to Jeitosa. It is worth noting that as these high-performing organizations further their global outsourcing strategy, they have fewer disruptions to their payroll teams because they are shifting employees to more strategic roles rather than reducing headcount.

  1. Relying on advanced metrics to make informed decisions about international payroll operations

Jeitosa found that innovative and effective global organizations are more likely to use advanced metrics to make informed decisions about their global payroll operations. This again demonstrates how top performing organizations remain agile by staying on the forefront of technology and change.

  1. Developing a global mindset across payroll staff

Global teamAn important consideration for global companies is understanding how their culture pervades all organizational functions. Top performing organizations are significantly more likely (36 percent) to build a more global mindset across their payroll staff as compared to their lower performing counterparts, according to Jeitosa.

For more information:

  • Attend the 2013 Global Payroll Trends, Metrics and Practices with The Hackett Group
  • Learn about Ceridian International Payroll Solutions
  • View our checklist for selecting an international payroll provider