Before the arrival of a global pandemic, the global payroll industry was facing a series of challenges that required urgent action in some cases. These challenges have not gone away, in fact some of them have even been aggravated by the Coronavirus situation. When pressure is applied and things are going wrong, deficiencies in a global payroll model or technology stack available to global payroll professionals, tends to surface.
The global pandemic has served to make global payroll that bit harder to deliver while also shining a light on the need to address some of the major shortcomings with the manner in which global payroll is processed at multinationals around the world.
In this article, we're going to re-examine some of the key challenges which are driving a need for a new approach to global payroll -and we will also take a look at new challenges that have cropped up as a result of the global pandemic and its damaging consequences to daily office life and workflow processes within business critical departments like global payroll.
Late Adoption
One of the key observations that gets raised in relation to global payroll is around the tendency to be a late adopter of the latest technology or workflow processes that can improve the delivery of services. Very few other business critical functions are slow to react to market developments or adopt innovative technology that can help improve processes.
Yet it seems that global payroll is continuously behind the curve, and not considered a priority investment. When you consider that global payroll is usually the number one business expense at any multinational, then you can conclude that this is a rather strange reality. Nonetheless, many global payroll professionals will confirm that this is indeed the case and investment in modern technology and the opportunity to adopt modern digital practices has somehow passed this department by.
This late adoption is a challenge that needs to be addressed as global payroll needs to move with agility, flexibility and speed just like any other business critical function. If a multinational is to drive a new approach to global payroll, then it needs to ask searching questions around why the pace of change tends to be slow and what can be done to speed up the adoption of innovative technology stacks, digital platforms and other helpful tools.
Volume and Pressure
Another driver for a new approach to global payroll is the volume of workloads and the pressure of meeting deadlines with increased burdens. Global payroll professionals increasingly find themselves working at multinational companies with large international workforces. These workforces only tend to grow instead of shrinking, companies scale into new territories and regions, new employees are on boarded at a rapid rate and it is not uncommon for a global payroll professional to find themselves starting a new month of work with 150 extra employees to be paid.
These dedicated professionals could really do with some assistance in the shape of automated services, standardized data and workflow processes, better and more efficient reporting and helpful task switching functionality. Above all, they would like to work on an innovative platform that integrates with the wider IT ecosystem that allows for easy HCM, finance and accounting department inputs and secure data transfers. This no longer falls into the category of nice to have, instead it is becoming essential to the accurate delivery of global payroll to a large number of employees. It is also become essential when it comes to meeting complex and changing compliance requirements, at an international level.
A global payroll system that has relied in the past on manual entry, non-standard data and processes and spreadsheet transfers is no longer feasible or sustainable when the volume and burden of activity is increasing at a regular rate. Secure, agile and flexible technology is needed as soon as possible and there is a very clear business case to be made for an investment in the global payroll department.
Managing Complexity
Today's global payroll environment is characterized by intricate complexity and high volume data. Leadership teams require answers and global payroll professionals have to delve deep into this complexity to come up with the answers. Here is a glance at some of the complex issues facing global payroll professionals today that is driving a need for a new and better approach:
- larger workforces due to scaling activity
- constantly changing regulation and compliance requirements
- manual entry and spreadsheet reliance
- data arriving from multiple sources in multiple formats
- complex network of in country providers and vendors to be managed
- lack of visibility and control over global payroll
- difficulty in achieving central governance
- Different employment laws and benefit distributions across countries
- time zone, currency and language barriers
- dated legacy technology no longer fit for purpose
- multi-system use and lack of technology integration
- Increased data security requirements
All of this results in wide ranging complexity that is not only very difficult to manage on a daily basis, it is also very difficult to get a clear picture of what is happening across a range of payroll countries. Complex data and processes can only result in complex and fragmented reporting & analysis-this leaves leadership teams feeling frustrated by an inability to get a clear picture of global payroll costs and predictive analytics that may help them determine the most optimal location for future hires and workforce deployment. This complexity is driving a need for a new, better and more efficient way to process global payroll - and this need is becoming more urgent with each passing month.
Lack of Integration
Another key driver is integration, or the lack of it. It is no longer acceptable in 2020 to have a collection of disparate systems that are not capable of interacting with each other and sharing data in a secure way that helps to streamline processes and improve overall efficiency. Manual input, spreadsheet data transfer or slow, cumbersome transfers of data between different systems in different countries feels like the way things used to be done in the 90s.
In the modern age of cloud technology, innovative tools and next generation digital platforms -it seems totally unacceptable that a lack of integration can be holding a business critical department back -but this is exactly what is happening in global payroll and any discussions that take place about improving it, should include a detailed conversation about an integrations project.
Global payroll needs to be viewed as part of the wider IT ecosystem and not considered an isolated department that performs bank transfers. This is not only an inaccurate and dated view; it also represents a method of thinking that belongs to the past. Cloud deployment and platform integrations are the future of many business functions and global payroll should be no different -in fact, it is a department that can undergo a genuine digital transformation with just a little bit of investment and a desire to deliver innovation.
And the rest…
Global payroll processing is a challenging environment with new issues surfacing all the time that need to be managed effectively. Strong technology with multiple capabilities is usually required to meet all of these challenges and it has become clear that companies who are unwilling to invest in their global payroll department are putting the delivery of their global payroll at risk. A few other challenges that come up in the many discussions we have with global payroll professionals include:
- Remote access to data: If people cannot access the data they need to process global payroll, then significant problems emerge.
- Staff morale: Some professionals feel stifled by out of date technology and processes- they feel there is a smarter, faster and better way of doing things.
- Hidden Insights: There are a vast amount of actionable insights and data hidden in global payroll information -they need to be liberated via comprehensive reporting and digital tools.
- Balance: Payroll managers are seeking to employ a global standard across their payroll while also accounting for local flexibility and expertise. Achieving this balance is difficult to do.
- One size fits all- Many aggregators out there seek to provide the same service to all their clients -and are unable to tailor specific services to specific needs- such a solution does not work for many companies.
- Hiring: It is always hard to find good people and young millennials today are not attracted to jobs involving manual repeat processes. They want digital tools and innovation.
- Data Access: Many company employees now expect 24/7 access to their global payroll data and personal information on the device of their choosing -companies need to adapt and make this information readily available to them.
Payslip
There is good news and it comes in the form of adaptable, flexible and innovative global payroll technology platforms like Payslip. The Payslip platform was designed to solve many of the problems outlined above. It provides automation and standardization along with the ability to integrate with HCM platforms for secure data sharing.
It provides consolidated multi country reporting along with predictive analytics - enabling both global payroll managers and leadership teams to have the kind of visibility and control they need over their global payroll.
The platform allows you to choose new or maintain existing relationships with preferred vendors or suppliers and it also supplies payroll professionals with a range of easy to use digital tools to help them do their jobs better. Tasks are performed quicker, errors are reduced, and staff have more time to focus on payroll priorities.
Visit our website or talk to our team today for more information on the reasons why partnering with Payslip can help to transform your global payroll operations.