According to the 2022 Gartner Market Guide for Multicountry Payroll Solutions, there is a rising interest in solutions that facilitate global payroll. But while payroll managers and payroll operations managers might be keen on replacing their legacy payroll software and multiple payroll vendors with a unified global platform that is based on the latest technologies, business leaders often hesitate to unlock the necessary funds.
What are the benefits of global payroll solutions? What problems can they solve for businesses with a multi-country payroll? In other words, what are the reasons for investing in a global payroll solution?
One of the key features of global payroll solutions is payroll automation. With automated processes and data exchanges, HR and payroll teams have more time to focus on more important tasks.
Another way to free up valuable resources through a global payroll solution is the implementation of employee self-service functions. If employees are able to access their payslips and modify bank details and other personal information online, this means a lot less work for HR.
Keeping payroll data safe at all times is difficult when running a multi-country payroll. Cross-border data transfers pose high data security risks, and having data collected and exchanged between different jurisdictions means having to comply with a multitude of different data protection laws. Using a unified global payroll solution solves this problem.
Since payroll providers usually have higher data protection levels than normal businesses, data security is guaranteed before, during and after the payroll process. If all providers are connected through a global platform, all data transfers are processed within one single well-protected system, which means the risk of data breaches is minimal.
COVID-19 has illustrated that a global crisis can have severe repercussions on payroll processing. One of the payroll inefficiencies that were revealed by the pandemic was the lack of standardization in payroll.
By switching to a global payroll solution that automates and standardizes data flows and processes across geographies, organizations can significantly increase the resilience of their payroll operations by compensating the lack of payroll professionals trained to operate different systems through standardization and automation.
Another advantage of process automation in global payroll is the fact that it reduces payroll errors. Errors in payroll usually occur when it’s processed manually, which still is the case in many organizations.
As the latest GPA and Immedis global payroll survey revealed, 71 percent of organizations still rely on Excel for their payroll processing. With an automated global payroll solution, manual data entering and processing errors are a thing of the past.
Payroll management is always a challenging task, but with a multi-country payroll, the problems and challenges multiply with every new payroll country. Also, keeping track of what’s going on in each location becomes more and more difficult.
A global payroll solution simplifies managing global payroll operations by providing a unified view of all processes and data through one single platform, thus avoiding the need to connect to different systems and tools.
Without a global payroll solution that standardizes the data for all geographies and then consolidates it in one central platform, it’s almost impossible for business leaders and managers to get access to reliable payroll data for their entire global workforce.
Yet knowing how high the business’s global payroll costs are is crucial to make fact-based, strategic decisions that will drive business growth and secure a healthy cash flow. Having access to consolidated, real-time payroll data is the key to detailed insights that can inform business decisions.
The Global Payroll Management Institute (GPMI) sees compliance as the number one global payroll challenge. Rules and regulations vary from one country to the next, and constantly keeping up with legal changes in all geographies is a challenge of its own.
To enhance global payroll compliance, businesses can outsource their payroll to in-country payroll partners (ICPs). Managing multiple service providers, however, often proves to be equally challenging. Connecting all the ICPs through a unified global payroll platform can solve the problems that come with multi-vendor management.
Without a clear global payroll strategy and a standardized global payroll platform, setting up a new local payroll and integrating it into the existing global payroll infrastructure can be very difficult and time-consuming. A global payroll solution can simplify this.
For one thing, solutions that operate as a global payroll aggregator (i. e. work with a network of in-country payroll partners) can put businesses in touch with a suitable provider on very short notice—which saves time compared to researching and comparing different providers. And second, a global payroll plattform with an API makes it easy to integrate external providers as soon as they start working so that new geographies can be added to the system a lot faster.
Good employees are the key to a successful business, and every business should make an effort to keep its best staff members. Creating a satisfying employee payroll experience is a key factor when it comes to employee retention. Plus, happy employees perform better and ultimately generate more revenue for the business.
Global payroll solutions are designed to create a positive user experience for both employers and employees. And improving the overall efficiency and accuracy of global payroll processes will contribute to employee happiness as well.
Global payroll challenges go way beyond compliance issues. Another major hurdle for multinationals is making sure everyone gets paid on time and in the correct currency. Outsourcing payroll to a local provider might solve the problem in those countries where they are legally allowed to pay employees on behalf of the actual employer, but in all other cases, cross-border payments remain a problem.
International payments are expensive and slow, and very often pricing is anything but transparent. Organizations that issue payments to different countries all over the world on a daily basis therefore need to find a cost-effective and efficient solution. Global payroll solutions like Lano come with global payments capacities that allow businesses to save time and money when paying global teams.
The Lano Academy is for informational purposes only and should not be construed as legal advice. Lano Software GmbH disclaims any liability for any actions you take or refrain from taking based on the content contained in this article.
BECOME A PARTNER
© Lano Software GmbH 2024