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4 Most Common Problems in International Payroll Management

Alex Margolin February 27, 2018

Business leaders competing within a globalized economy are unsung heroes. In addition to keeping your company productive and focused on the overarching goals, you have to deal with the everyday complex struggles associated with domestic and global HR requirements. Executing error-free and compliant payroll should be a given domestically, but overseas, your business faces a whole new set of challenges in international payroll management.

The zero-tolerance approach taken by governments on payroll non-compliance, means your business faces increased government audits, more exposure to risk, and the navigation of governmental changes, all while having to ensure the integrity and efficiency of your organization.

1. Ensuring Compliance

Without doubt, the biggest pitfall for any organization is ensuring global payroll compliance. In the 2017 Global Payroll Complexity Index (GPCI), 65% of the UK payroll experts and professionals surveyed said that managing legislative, HR, and payroll updates presented their biggest challenge. Each country has its own currencies, culture, economic conditions, and statutory country laws regarding the compensation of employees. Companies will be forced to review their global HR management due to the impending impact GDPR and Brexit will have on HR processes, which only adds to the complexity of international payroll management. HR directors must manage their payroll so that employees are kept engaged with their jobs and accurately compensated, but also ensure global payroll compliance.

A complete understanding and hands-on knowledge of the different employment laws affecting your business is imperative. Ensuring compliance is the main reason why more and more companies are outsourcing their payroll management to third-party experts. An effective cloud payroll platform provides a compliant and accurate global payroll solution in a single, transparent, and centralized automated solution.

2. Payroll Process Streamlining

Using multiple local payroll processes isn’t sustainable or scalable. Multinational organizations often make the mistake of using a decentralized payroll model comprising dozens of local payroll providers, different HRIS systems, practices and processes. In Ernst & Young’s survey, ‘Global Payroll: Myth or Reality,’ 85% of multinational companies regard their payroll practices as needing improvement. Failing to consolidate and streamline your international payroll management increases the complexity, incurs additional costs, and compromises data quality and payroll efficiency.

High-risk, high-admin payroll processes need to be outsourced or automated to lessen the risk of fines and reputation damage. The rapid rate adoption of payroll cloud software has created a new wave of advanced system consolidations, migrations, integrations, and replacements. This has made centralizing international payroll management a simpler, more productive, and cost-effective process.

3. Integration and Best Practices

Integrating an international payroll solution presents a challenge in itself. Different HRIS systems will need to be consolidated and even replaced. Having to continually adapt existing and new technologies into a global HR process is inefficient and prone to error.

Instead, a clear roadmap is needed. A roadmap that will overcome the challenge of integration into focused projects, rolled out in manageable stages using payroll cloud tools. Cloud payroll technology standardizes international payroll, reducing the need for customization. The result is greater efficiency and globalized best practice payroll processes.

4. Data Management

While it can be challenging for global HR teams to store and report data, having the right payroll system can smooth out this process Payroll data stored locally takes time to collate and is often out of sync with other corresponding systems within the organization. The manual processing of fragmented data is prone to errors and can often mean the data is incomplete, or out-of-date, before it is ready for analysis.

A unified global payroll solution provides standardization and centralization of your data in a compliant and transparent manner. An effective international payroll management system provides real-time reporting to both employer and employee. Payroll cloud technology enables self-service data retrieval, reducing time and resources spent on manual data input, updates.

Advantages of a Global Payroll Management System

International payroll management does not have to be difficult. Using a single platform offers best-practice standardization which can be adapted to your specific business needs, without the need for costly or timely customization.

Using payroll cloud technology, a centralized payroll management platform, ensures worldwide payroll compliance whilst offering enhanced data reporting and improved efficiency. Importantly to your business, an effective international payroll management system means your workforce is paid on time, remaining engaged, and productive.

The right answer for managing your company’s global payroll can also provide the necessary security. Only those with passwords or administrative rights have access to enter the program. Simultaneously, employees with necessary rights can make changes in real time. The platform notifies you of modifications that have been made to the document so that you don’t have to search for them yourself in case something is missing, incorrect, or has been lost in the process.  In addition, you will be able to see the relevant information for any criteria, whether country-based, employee-based, or project-based

Attain organization-wide control of your global payroll processes with an international payroll management system providing full transparency, compliance, and local flexibility, allowing you to focus on other areas of your organizations operational activities.