What does global payroll best practice look like?

May 12, 2022 | 5 Mins David Daly

Delivering and managing global payroll across multiple different countries at a multinational company can be challenging. There are a lot of moving parts and variables at play and global payroll professionals need to demonstrate a lot of diligence and accuracy to make sure their international payroll is delivered on time and accurately to a global workforce.

To their enormous credit, they manage to do so to an extremely high standard on a consistent basis, but it has become very clear over the last decade, that they could do with some assistance in terms of best practices, digitization, and technology tools. The global payroll services landscape has become crowded and complex, there is lots of data moving around lots of different disparate systems and there is also an overreliance on manual inputs, spreadsheets, and emails. This approach to payroll delivery and management is no longer sustainable and there is a growing and urgent need for a digital based approach to payroll systems in 2022 and beyond.

In this article, we’re going to take a look at some best practices that global employers and companies around the world can begin to introduce quickly to ensure smoother, faster, and better payroll delivery. Following the practices outlined in this article will not only help you better manage multicounty payroll today, but it will also help you put the foundations in place for future payroll processes as your organization grows and scales.

Standardize your approach across countries

This is something that simply makes sense, when you have multiple different countries on your payroll books and there is a different process for each country, it is not hard to see how things become complex and challenging. The result is an overburdened global payroll team struggling to meet their deadlines and manage their workloads. Standardization of data and process is the answer.

Standardizing your data means adopting a global framework but ensuring that there is room for local country nuance such as local labor and tax laws along with compliance obligations. You take all of the data flows from the various different-sources these will be your HCM, payroll software or mechanism and the local payroll country vendors- then you categorize and standardize it all at a global level. The result of this is a globally standardized data process, with payroll data being managed in the same format for each country. Visibility and control immediately improve, you can actually see what is happening with your payroll across each of your countries and make decisions a lot quicker.

Next you move on to standardizing your processes- this is really about having a global payroll team operate with the same process across each of the countries. In this case, a member of the payroll team should easily be able to switch across and pick up the duties on a country that they were not previously familiar with, because the process is essentially the same across all countries. This approach empowers payroll professionals and allows global employers to maximize the resources and productivity of their team when delivering payroll.

Automate wherever you can

The days of excel spreadsheets and transferring sensitive global payroll data via email should be consigned to the past. Simply from a data security and information protection perspective, it is no longer secure to operate in this way. But there is also an operational efficiency element to it- manual inputs and calculations via spreadsheet are slow and cumbersome, they are also prone to human error, create inefficiencies and are entirely unsuitable for large amounts of payroll data across multiple different countries.

Introduce automation into your payroll technology for faster, automated data flows and inputs. Best practice would be to automate the payroll data inputs via automated bulk file uploads which are capable of entering, checking, and validating thousands of payroll inputs in seconds. The global payroll professionals would then only have to focus their skills and time on checking the anomalies and doing analysis. Automation can enhance workflows, give back time and introduce much needed breathing space into each monthly payrun cycle.

You should also automate any data flows from your HCM or payroll providers where possible- if these inputs are flowing automatically, even more time is saved, and the integrity and accuracy of the data is never in question. Global payroll professionals can then focus on analysis and reporting instead of having their time dominated with the administrative burden of manual entry and checking via excel spreadsheet.

Integrate and connect the key players

Global payroll cannot be delivered and managed in isolation-it will always require inputs and data from the HCM or human resource system as well as calculation inputs from local country providers, who will always be needed to pay people on the ground in the countries in which you operate in.

You will always need dataflows with these different systems so it makes business sense to leverage digital technology integrations so that these systems can speak to each other and share data, ideally in an automated fashion.

This creates a more efficient and cohesive payroll, and once again, it saves massive amounts of time as there will no longer be a need to transfer or duplicate data across systems. A common challenge for companies today is that some of the data needed for payroll is located in their payroll software and some of it is located in their HR system. When these two systems are not integrated for data sharing, common problems around data arise and the whole process is slowed down and subject to accuracy concerns.

Connecting to key players into payroll ecosystem will ensure smooth and accurate data flows in a fast and efficient manner, payroll will immediately become quicker and more transparent. The 3 key players in the ecosystem immediately benefit from these core integrations– the HCM becomes the single source of truth for HR data and the payroll software becomes the single source of truth for global payroll data and reporting, while the local country provider benefits from secure and rapid data flows which help them deliver their services in a timely, accurate and effective manner. Everybody wins, and the entire process becomes more structured, transparent, and disciplined.

Consolidate your data for reporting

Disconnected data and multiple disparate systems means that extracting global payroll data for comprehensive and detailed multi-country reporting is almost impossible. Without multi-country reporting, global payroll managers and leadership teams struggle to get a clear view of what is happening especially when it comes to comparing costs across countries.

Data in isolation is of limited value and does not tell the full story- cost management and scaling activities are now priorities for multinational companies therefore bigger picture insights are being demanded. Most companies today are not positioned to respond to these bigger picture insight requests as they do not have the technology in place to extract payroll data and convert it into digestible and easily understood reporting which is consolidated at a global level.

The key is to consolidate your data and then have it flow into one centralized system or platform, from which consolidated reporting can be delivered. Ideally you want to have this reporting delivered on a self-service basis so multiple stakeholders can go in and extract the specific and nuanced reporting that they need. Only globally standardized data consolidated at a global level can deliver the multi country reporting that is needed today. A global payroll control platform designed to consolidate data for reporting is the solution here.

 

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