Likely global payroll trends in 2022
A new year has begun and global payroll professionals across the world are facing into a new year of payroll processing duties. Many of them are wondering what is going to be different about next year, both in terms of their daily global payroll processing challenges as well as the overall global payroll landscape and the future of work.
The pace of technological change is so rapid that it appears inevitable that technology will have a major influence on global payroll delivery in 2022. We emerged from a pandemic last year, and it became clear very quickly that there would be no return to the old way of doing things or work models -certainly from an office life perspective anyway. Remote working and hybrid working became the new normal, and this had a huge impact on hiring policies at multinational companies around the world.
With location no longer a priority, candidates could be sourced, interviewed and onboarded into a new job remotely. This understandably, created new levels of challenge and complexity for global payroll professionals whose job it is to ensure that everybody gets paid accurately, on time and in a compliant manner. As a result of this new working environment along with some other developments that happened in global payroll last year, we are going to examine in this article, some of the likely key trends in the global payroll industry for 2022.
Growth efficiency will be a priority
Growth and company scaling have been around for a long time now-but growth efficiency is a relatively new concept. This is really about ensuring that global organizations have developed both the processes and technology that can facilitate the level of scaling they wish to achieve in an efficient manner.
Growing rapidly into new countries, territories and markets in an effort to carve out new revenue streams and market share involve hiring new people and paying them. Many companies are finding that their global payroll process is unable to keep pace with their growth ambitions. The reason for this is a mixture of legacy service options or processes that were not designed to facilitate rapid growth and the use of a global payroll process model that no longer fits in terms of speed and agility.
These companies need a new way to deliver global payroll and a new global payroll technology platform to support this delivery. This is about making sure that any opportunities identified by the leadership teams can be seized and acted upon faster than the competition.
Global payroll is a business-critical delivery, it is crucial therefore that it is supported with the best cloud-based technology available- the kind of technology that proves to be a business asset in the journey towards growth efficiency.
Automation may go mainstream
We talked to global payroll professionals all the time here at Payslip and we never cease to be amazed by the number of reports we hear about the use of excel spreadsheets and emails to transfer global payroll data. It seems staggering that this may continue to be the case in 2022, but this really is just how things are at a lot of companies today.
The global payroll department had sadly not received the same level of investment support when it comes to innovative digital tools and technology platforms. But that may be about to change and 2022 might just be the year that automation goes mainstream.
There are a number of valid reasons why global payroll should be automated:
- it is much faster and more convenient
- there is much greater accuracy
- reduced likelihood of human error
- create time in the global payroll delivery process
- frees up professionals to focus their attention on other high value work
- create execution excellence and operational efficiency
The list goes on, and it is clear to anyone who looks into automation, that very obvious process improvements will take place very quickly once robotic process automation is applied for previously manual tasks. Vast amounts of payroll data for example could be bulk uploaded, checked, validated and approved in seconds- what kind of difference could this make to your working day?
Put simply, automation is no longer the future, instead it is the present. Those not operating with automation in their global payroll delivery process are behind the curve.
Extended workforce management will be key
For many large enterprises, they are already operating with a large geo-dispersed workforce. These companies are scaling and hiring at a rapid rate, but they also have requirements and job openings for specialist talent from labor pools on a temporary basis. This workforce trend in the labor market means they need to operate with an extended workforce that includes contractors, ex pats and Employer of record (EOR) workers.
All of these workers need to be managed and paid. Their contracts may include healthcare, employee benefits and specific working arrangements. All of this creates extra layers of payroll process complexity in an already difficult job for global payroll professionals. The usual process is that these extended workforce employees need to be managed and paid on a separate system. This results in significant visibility and control issues-it is difficult for hr leaders and hr teams to get a handle on where these extended workforce employees are located, how much they are being paid and how often.
A lack of standardized processes and data integrations means that the payroll information related to the extended workforce is usually moving around several different departments. This makes reporting difficult, and without reporting, there is limited or no visibility. Workforce management control and cost control tends to suffer when this is the case. In 2022, companies everywhere will be looking to grow and expand, and they will find that this requires a mix of different employee types. Their global payroll teams will subsequently be tasked with managing and extended workforce on top of their existing geo dispersed workforce. Managing all of this with visibility and control will be a key challenge for companies in 2022, especially with retention and employee engagement becoming top priorities in response to the great resignation.
Demands for reporting will rise
As mentioned above, companies will continue to scale at pace and hire a range of different employee types to make this happen. All of this needs to be monitored managed and controlled-reporting will be key to achieving this.
Detailed, comprehensive and globally consolidated payroll reports will be needed by a range of different stakeholders to manage the global workforce and monitor costs.
Global payroll managers, HR leaders and CFOs will be actively seeking both high level and very detailed reporting. They will want bigger picture insights in order to make strategic decisions, but they will also want to drill down into the details to understand what is really going on with payroll expenditure.
Country cost comparison reporting will be essential as leadership teams will be interested in identifying cost-effective sources of labor around the world. They will also want complete data-driven visibility into all payroll elements including salary expenses and taxes drives fully informed decision making. This information needs to be delivered on demand and in real time so that stakeholders can run their own reports to view, understand and compare payroll costs, trends and variances by region, by country, and employee
With these payroll trends likely dominating the global payroll landscape in 2022, there is a greater need than ever before to manage global payroll delivery via a global payroll control platform.
The Payslip platform is perfectly positioned to help global companies react to these trends before they become a problem. The platform was designed to harmonize global payroll operations while fueling growth efficiency. Payslip’s unified, global-first data approach unlocks and standardizes global payroll data so you can see a bigger picture.
Payslip also integrates payroll with HCM & finance systems, local payroll providers and the broader external business ecosystem. A unified work model across HR, Finance and Global Payroll creates a single system for payroll execution and automated payroll workflows drives new levels of efficiency. When you combine these on a single platform, you are then operating with a payroll process and technology platform that supports business expansion. The best start you could make to 2022 is to talk to our team and find out more about our global payroll control platform.
For information on the Payslip Platform contact us today.