2021 Global Payroll trends: what to expect

February 24, 2021 | David Daly 5 Mins read

Last year was an extremely disruptive year for global payroll departments in multinational organizations around the world due to a pandemic that is still with us. Many organizations found themselves in panic mode as they looked to put reactive processes in place in a scramble to deliver global payroll services remotely with coronavirus raging in the background.

Understandably, this was a far from ideal situation and many found it difficult to deliver payroll efficiently under such trying circumstances. Organizations who used legacy, dated or weak technology found themselves exposed and suffered consequences.

Others realized that their global payroll software, procedures and processes needed a major overhaul if they were to withstand the headwinds brought about by the coronavirus global pandemic. The pandemic has not gone away and while there is positive news on the vaccine front, it is still very clear for many organizations that payroll will be delivered remotely for at least the first half of 2021.

In this article, we will take a look at what key trends global payroll professionals can expect to see in the payroll space this year -some of these trends will have been shaped and deeply influenced by the COVID-19 pandemic while other trends where inevitably going to happen regardless of economic conditions.

Remote delivery to continue

The future of the office is up for debate, but paying an international workforce located across several countries on time and accurately is never up for debate. Global payroll is a business-critical service, and it needs to be delivered to a very high standard regardless of whether that delivery is done from an office or a remote location.

For any companies that have not yet equipped their global payroll professionals with the kind of digital innovative tools they need to do their jobs better, then now is the time to address that as remote work is here to stay. Global employers must make sure that their HR teams and payroll professionals have full remote access to employee data, payroll documents and payroll continuity procedure notes. This needs to happen in a cloud- based environment with authorized user access and agile sharing rights.

Employees need to be able to switch tasks among professionals based in different countries while also running their own analytical reports on a self-serve basis. Data transfers containing sensitive personal and pay related data for thousands of company employees needs to be accessed, transferred and managed in a secure cloud-based environment.

Companies who deliver global payroll via a digital cloud platform with innovative tools can have peace of mind that effective global payroll delivery can happen remotely at a consistently high standard. Those who are still relying on excel spreadsheets and dated HCM systems are likely to have a far more challenging and stressful year as this kind of technology and these kinds of payroll processes come with a lot of risk management.

A digital emphasis to take hold

Social distancing and remote delivery of services is needed during a global pandemic so there is a greater need for digital tools that help people do their jobs. Many global payroll and HR services will therefore need a strong level of digitization in order to prosper and thrive in this new normal we are all experiencing.

One of the payroll trends you are likely to see is an increase in demand for investment in digital platforms and innovative digital tools. Payroll departments will correctly claim that these tools are now essential for them to do their jobs, and without these tools, unnecessary risks will arise in the monthly payroll process.

Remote access to documents, file sharing, user authorizations, digital calendars and in system alerts are all now crucial to successful and sustainable multi-country global payroll delivery. In the past, these things may have fallen into the category of ‘nice to have’ but a global pandemic has created geo dispersed payroll teams who need to communicate and interact with each other in an agile and responsive manner. This can only be achieved on digital platforms featuring purpose-built tools that are designed to improve global payroll workflows and processing.

The technology exists, the business case is stronger than it has ever been so there is really no excuse for organizations to not invest in their global payroll platforms and prioritize digitization across this business- critical function.

Cost saving initiatives will rise

Business owners and business leaders everywhere are feeling the pinch -the global economy has suffered a truly dramatic hit and the turbulence will continue for some time. This is not a time for mass layoffs or dramatic cost cutting but it is a time where many members of the senior leadership team will look to introduce cost saving initiatives to get through what is a difficult period for business.

It won’t always be about saving a dollar here and there -it can also be about optimization and productivity. There is scope to improve both of these things with global payroll technology -introducing automation for example, can significantly improve productivity while saving a lot of time on manual administrative tasks and workflows – direct cost savings can be a consequence as faster, efficient and automated processes need less people to run them.

Automation tools and process streamlining can enable busy payroll professionals to achieve more with less. There is scope to identify innovative digital tools which are not difficult to implement or payroll solutions that require a relatively straightforward integration. Attempting to do this will help global payroll departments deliver their service in the best way possible while ensuring that costs stay under control.

Reporting demands will surge

The ongoing pandemic means there is no time to relax and a lot of businesses out there feel that they are in crisis mode every day of the week just now. When a global crisis is underway, the need for decisive and effective decision-making skyrockets-and nobody wants to make decisions without solid data to support their conclusions.

This means that basic level reporting around global payroll costs will no longer cut it. A new level of granular and detailed comprehensive multi country reporting will be required and it will be expected to be produced and delivered on a much quicker basis.

C-Suite executives and leadership teams at organizations need to pivot and change course very quickly in response to what they see is happening in the market. There is a very delicate balancing act in play here- making the right decision fast, supported with timely and accurate data.

Reports that compare labor costs across countries will be crucial when it comes to analysis and trending information. Reports that drill down into specific pay elements will also be needed as detail is needed for reassurance.

Various different stakeholders across an organization will want access to global payroll reporting and will not be interested in hearing about why it can’t be done or why it will take so long. The ideal scenario is to provide multiple different stakeholders with self-service access to global payroll reporting so that they can run the kind of reports they want on a self-serve basis, anytime they want from any location.  A digital platform designed specifically for global payroll management is required for this to happen.

Regulations will change, again

The only constant is change when it comes to international compliance and regulation. Global payroll always involved a complex level of international compliance requirements- a key trend of 2021 is that compliance requirements are only likely to grow and regulations around the taxation of geo dispersed or remote working employees is likely to change.

This can be a little frustrating for the people who work in these departments, but it is also perfectly understandable -the world has changed dramatically and many people who have been forced to work from home, are arriving at the reasonable assumption that they can deliver their daily duties from their home country.

While they are on reasonably solid ground when it comes to the logic of this conclusion -it nevertheless creates a headache around regulation and taxation. Are they subject to tax in their home country or in the country of their global employer? How do they avoid double taxation, and what is the impact on their country of residency for tax purposes if they request to work from home in their origin country?

Last year was all about flexibility and ensuring business survival -everybody went home and anybody who could complete their duties via a laptop and an internet connection was asked to do so. For various reasons, some global employees decided to return to their home country and deliver remotely from there. Now that we are in year two of this pandemic, regulatory authorities are under increasing pressure to apply some structure and management to increasingly mobile and geo dispersed international workforces. You can therefore expect to see a lot of activity and high-volume reporting around regulation and employee workforce compliance.

 

It will be an interesting year ahead filled with many challenges -but it is also likely to be a year where digitization takes hold at global payroll departments everywhere. Payslip helped many clients last year cope with the crisis brought about by the global pandemic. Our global payroll technology platform and the innovative tools that come with it provide a genuine solution to global employers who are looking to better manage their global payroll processing and services both in 2021 and beyond. Talk to our team today to see just how quickly you can get started on the road to better global payroll management.

 

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Using Payslip, we can manage all our payrolls across nine in-country vendors on one platform. When the global Covid-19 pandemic arose, it was not an issue from a payroll perspective, and critically getting everyone paid. The Payslip platform enabled continuity for our international payroll service including the fast and seamless implementation of the Payslip Employment Self Service during this time.

Colin Smith

Payroll Manager, LogMeIn

Payslip as a technology platform has added a missing piece in our payroll set-up. As an international company with offices in 16 countries, it’s important to us that every employee at GetYourGuide has the same great experience when accessing their pay data.

At the same time, we work well with smaller local payroll providers, supporting us with direct local expertise in their countries. We were able to combine those two elements by placing the Payslip platform in the middle, to simplify reporting and communication with local providers, and to have one simple employee-facing solution across all locations.

Julian Fichter

Head of HR, GetYourGuide

With business and employee growth rates of above 50%, we rely on our vendors to deliver on time, every time. Payslip’s workflow automation, enables Phorest to manage our payroll provider process – data driven, real time and transparent. Payslip saves us time so we can focus on our business growth.

Ana Kelly

International Payroll Manager, Phorest