The makeup of global workforces at multinational companies around the world has changed dramatically due to the global pandemic. Hiring practices at human resources departments have also changed in response to the new narrative which is an everywhere workforce or a work from anywhere concept.
This can be strategically advantageous for some organizations who now have access to a much wider talent pool as long as they embrace the remote working and remote hiring culture. In a digital economy for digital platforms are seemingly everywhere, the ability to hire software developers and back-end engineers from anywhere in the world and have them work on various digital projects is an attractive proposition.
So, the everywhere workforce concept has been embraced by a large amount of multinationals, who view strategic and remote hiring as an enabler to grow and an opportunity to carve out new revenue and market share in different locations around the world.
But there remains a doubt around the ability of the global payroll department and the international payroll management process to keep pace and run payroll effectively with this new working normal. It is probably unlikely that the global payroll department were consulted when a decision was made to proceed with these new hiring practices. Few or simply not enough people stop to think and ask the question as to whether or not the technology capacity exists within the global payroll department to pay this new globally dispersed workforce accurately and on time every pay period.
New challenges. New complexity
Everyone can see the positives and advantages in being able to hire remote teams and remote workers from around the world. It is an opportunity to get the best talent that is out there working for you on the understanding that location is now no longer a blocker to hiring. Remote workers and the everywhere workforce are capable of delivering their duties from home or remote locations.
Hiring and onboarding them is not quite as simple and paying them is definitely nowhere near as simple. Global human resource teams have often benefited from a technology or digital platform investment which allows them to seek out qualified candidates from around the world, interview, hire and on board in a relatively straightforward way.
Problems arise when this same level of investment in technology and digital platforms is not applied to the mission critical global payroll department. This department is consistently overlooked when it comes to the digitization and automation of payroll, both of these will be key to the smooth delivery of payroll services to a globally dispersed workforce, many of whom will never even visit a company headquarter location.
There are new challenges and new complexity involved with paying this new everywhere workforce. If a multinational is headquartered in London, and they now have to pay 35 new hire software developers who are based in Central and South America, where the company has no entity or legal presence, things can get complicated.
Compliance, state law & federal law along with local country administration and regulation need to be considered and planned for. Culture, time zone and currency differences also come into play here as does health care and social security. If a multinational company operates a centralized payroll processing team out of its headquarters, then their standard practice of using excel spreadsheets, manual data entry and e-mail data transfer will be nowhere near good enough to get the job done. Payroll is an essential service, it is the core contract between the global employer and the employee, should it break down and you fail to pay employees, these employees will go elsewhere, and you are left with a level of reputational damage that is really difficult to recover from.
Local expertise is needed. But then you have to manage it.
If you find yourself with hundreds of new remote workers to be paid, you are going to have to engage with local country payroll providers in the countries where these workers are located. Compliance and local labour laws means that there is really no way around this- salary and wage payments have to be legal and above board at all times.
The result of all this will be a new list of local country vendors added to what could already be a sizable number of payroll vendors that existed before the pandemic and this new working normal came into practice.
So, now you are facing a management challenge with your payroll service- how to apply some structure and control as well as some form of global framework that ties all of these local vendors together in a single location. This is crucial, because to see what is happening across all of your payroll countries, you really need the data from these local vendors to flow into a single location where it can be standardized and consolidated at a global level. This will enable global payroll teams and global payroll managers to see the bigger picture global view while also being able to drill down into the micro details that tell the story behind the data. This is visibility and control- this is standardized data and processes for paying employees around the world regardless of what type of employee they are or where they are located. Without a process in place to manage all of the vendors in all of the locations, you will end up with disparate systems, non-standardized payroll data and practices, limited or no reporting and no real sense of control over what is happening with your payroll.
You cannot do without the local country vendors, otherwise nobody gets paid, but it would be a mistake to go out and engage with local vendors without a global management plan in place.
Payroll technology that keeps pace
As we have entered a new working normal, there also needs to be a new normal for global payroll. Here’s what this new normal needs to look like.
- payroll is managed in a digital cloud environment on a global payroll control platform
- payroll data is automated and the excel spreadsheets and manual uploads are consigned to the past
- payroll data and process are standardized across countries-you have a single way of working across all of your payroll countries
- you choose, manage and control your own network of local country vendors
- data from all of your vendors flows into a single location for analysis and reporting
- you have consolidated, detailed and comprehensive multicounty payroll reporting that helps you understand what is happening
- your payroll team is equipped with digital tools that helps them do their jobs in a faster smarter and better way- dashboards, system alerts, self-service reporting and more
- your compliance requirements are digitized and calendarized so that compliance failure is no longer a risk
- sensitive and highly personal global payroll data information is managed with the highest industry security protocols around data protection
- you have a global management solution that is flexible enough to accommodate the inevitable local country nuance and differences that occur in each of your payroll countries
You get all of the above on the global payroll control platform here at Payslip. We are the global payroll management solution of choice for multinational organizations who are choosing to prioritize and digitize their mission critical global payroll.
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These companies can see the difficulties coming down the road if they do nothing-they have a globally dispersed workforce, they're hiring policies encourage the everywhere workforce and the recruitment of remote workers and they can see that their current use of multiple systems with different data flows is preventing them from achieving a clear view of what it's happening across all of their payroll countries.
They understand that a solution is required and have come to the realization that there is no single payroll services provider out there who can cover all of their countries along with all of their workforce types (new employees, independent contractors, full-time and part-time employees). They have tried the aggregator services model in the past and found that it does not solve their problems and only actually covers a small number of the countries where they have employees.
Payslip solve their vendor, data and reporting challenges in a single platform enabling them to take back control and apply a global framework to their multi country payroll delivery and management process. Talk to our team today and take a platform tour to see how we can do the same for you.
For more information about our Global Payroll Control Platform contact us today.