Overcome global payroll challenges with a single cloud solution
Global organizations are grappling with a series of challenges which have been further amplified by the pandemic. To ensure business continuity today and in the future, organizations need to address complex regulatory challenges across regions, pay their people accurately and on time, and increase visibility into payroll data to make more informed decisions.
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The payroll landscape is becoming increasingly complex. Over the last few years, global companies have cited determining tax withholding obligations, reporting taxable compensation to local agencies, and year-end processing procedures as their top payroll challenges.
The pandemic has amplified existing challenges and introduced new ones. As a result, there has been almost a 40 percent increase in organizations who have or have plans to develop a payroll strategy since the pandemic's onset.
As well, the regulatory landscape has been changing in various regions, making it difficult for organizations to remain compliant. Poor economic conditions have further put prolonged financial stress on the workforce. Organizations worldwide are re-evaluating their current approach to global payroll and consider moving away from antiquated processes and systems toward a global approach for their borderless workforce.
Why a fragmented approach to global payroll doesn’t work
It's common for organizations to address each country’s payroll individually, especially when they've grown through acquisitions. Over time, this approach results in a fragmented payroll landscape with multiple systems, external vendors, and internal teams delivering widely varied services and experiences in different countries.
With little standardization, efficiency suffers, and costs start creeping up. Leadership struggles to understand, compare, and improve key metrics. Deteriorating visibility into payroll operations heightens the risk of non-compliance with regulatory requirements and internal policies. As well, threats to the continuity of business operations – such as a health crisis –impacts different regions as payroll teams work remotely or become ill. Employee experience, in turn, takes a hit.
The value of a single solution for global payroll
Times of crisis are when a single, cloud-based approach to global payroll or multi-country payroll becomes attractive. A global payroll operation enables companies to standardize and centralize common payroll processes at the global level while providing flexibility to manage country-specific requirements at the local level.
Typically, a robust global payroll strategy provides companies with the following benefits:
1. Improve pay accuracy
Employees have been experiencing acute levels of financial stress due to the pandemic. BrightPlan’s 2022 Wellness Barometer survey found 72% of workers feel financially stressed, which is impacting their health, engagement, and productivity. If payroll isn’t done correctly or on time, employees can lose confidence in their employers’ ability to pay them.
Consolidating payroll and time & attendance in a single system can help employers gain access to a unified source of data to improve pay accuracy. Getting real-time payroll data and validation of hours their employees have worked can also help payroll teams reduce the amount of time they spend reconciling errors from batch processing.
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2. Enhance pay experience for employees
A single system for payroll and time tracking can also elevate the pay experience for the employees as they’re paid accurately and on time no matter where they’re working from. Mobile, self-serve technology can provide employees with greater access to view their current and past earning statements at any time so they can better manage their personal finances. This shows the level of investment the company is making in addressing the needs of their people, which can contribute to better retention and engagement.
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3. Reduce risk and manage compliance
A single solution for global payroll can help you stay on top of changing legislation in multiple regions and avoid costly fines or penalties. Employers can review and validate multi-currency payroll so employees get paid in the right amount for the region they’re working out of.
As well, it can help lessen reliance on hard-to-understand customized processes at the country level. For instance, a unified global payroll platform can enable companies to conduct global audits that help administrators identify and resolve issues proactively.
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4. Improve efficiency and cost control
A global payroll strategy generally helps companies move away from expensive customizations, consolidate interfaces and vendors, and leverage economies of scale, therefore resulting in lower overall costs.
Companies can further control costs by exploring outsourcing services. If a company chooses to run payroll in any country in-house, they must have the expertise and technology to manage the entire process themselves, which can translate to significant investment even for countries with relatively low employee populations. The appeal of such services is reflected in the fact that multi-country payroll is growing at nearly two times the rate of the overall payroll market.
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5. Increase visibility and reporting
Deloitte’s Payroll Benchmarking Survey found that many organizations do not have complete visibility into their global payroll operations, but are looking to gain a better understanding of holistic operations. A global payroll platform can provide consolidated reporting that reveals insights at local and regional as well as global levels. With the unified platform acting as the single source of truth, reporting becomes easier and more seamless. Leaders can track and compare key metrics such as payroll accuracy and timeliness, either globally or by country/region, to inform key decisions on payroll operations, workforce composition, etc.
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6. Consistent global employee experience
Prior to the pandemic, organizations were beginning to view payroll as a more integral component of the overall employee value proposition. A unified global payroll platform makes it easier for innovations on self-service, mobility, helpdesk support, etc. to reach employees in all countries. As remote work expands the possibility of a borderless workforce, a global solution helps offer employees consistent service standards across the world while also providing them a localized user interface that reflects local norms in terms of time, currency, language etc. Organizations can leverage a single solution that allows for customization and fulfillment of geography-specific HR requirements.
In this new reality, organizations need to approach payroll differently to make smarter business decisions. Leading global organizations are turning to more reliable global partners with innovative technologies to help them adjust to the growing number of complexities, lack of resources, and ever-evolving legislative changes. Learn how Dayforce can help your organization better manage global payroll in an ever-changing world of work.
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