May 27, 2022
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In an increasingly global world, international expansion is no longer just an option for businesses, but a sheer necessity. Yet there are many challenges when expanding internationally, including compliance with local laws and tax regulations, intercultural communication and talent acquisition, to name but a few. Not to forget the different global payroll challenges organizations need to solve.
Many of the difficulties linked to international payroll processing can be solved by opting for a global payroll solution. However, choosing the best solution for your business is far from being easy. The number of providers is constantly growing and the variety of products is nothing short of overwhelming.
That’s why we have compiled a detailed list of 12 different features and criteria that will help you differentiate good international payroll solutions from those not worth the money.
Unsure whether your organization really needs a centralized solution to manage global payroll? We have compiled a list of 10 reasons to invest in a global payroll solution.
Let’s start with the basics. As with any other service you contract for your business, you want the implementation process for your international payroll solution to be as fast and smooth as possible. Ask potential service providers about their implementation process. What will the steps be? How long will it take? They may even have some case studies with previous clients where you can see their implementation process in an example.
No matter how many features a unified global payroll system offers, if it’s a nightmare to use, your team won’t be happy with it. Payroll software solutions should be intuitive and easy to use. What’s more, they should be adjusted to the needs of your company. Which data insights and functionalities do you require? Will the platform be accessible 24/7? Is it cloud-based to be accessible from everywhere in the world and leverage new technology?
Global expansion is an ongoing project. Once the wheel is spinning, companies keep growing and expanding into new markets. If they don’t, they risk falling behind their competitors. This is why your international payroll solution should be scalable. Adding new payroll countries should be an easy process and the global payroll software should offer coverage for enough countries to allow you to keep growing. At Lano, for instance, we support payroll in over 150 countries worldwide and are constantly growing our network.
Automation, standardization and consolidation form what one might call the core of a global payroll solution. The idea is to standardize data formats and processes, automate data flows, and ultimately consolidate your global payroll data in a so-called single source of truth. Not only does this lead to increased data transparency and reliability, but it also means less work for your team, which will then no longer have to manually extract and harmonize data. This is particularly helpful when preparing for audits or composing reports.
And speaking of reports. Reporting facilities are yet another feature to look out for when choosing a global payroll software solution. A global payroll platform should provide different reporting options, including country-specific as well as global reporting. It should be possible to view and analyze the same pay elements for every geography, in order to draw comparisons between them. Transparent, reliable payroll data is the basis for making well-informed business decisions.
Not sure what to do with all the data you receive from your payroll providers? In this blog post, we explain how to use payroll data for your business.
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Compliance is one of the top priorities for every organization. There are many different compliance challenges companies face when growing globally, and payroll as well as tax and benefits management are a big part of the compliance burden. When choosing an international payroll solution, make sure your compliance is ensured by experts and that the solution you opt for has a proven track record. They should be able to offer expert advice on payroll regulations, taxation and benefits for all the countries you are targeting with your international expansion.
Process efficiency is key to business success. There are many different tools organizations can implement to make the management of their global workforce less time-consuming. However, having a whole range of different HR tools can quickly turn into a curse rather than a blessing if these systems don’t interact with one another.
For a maximum of efficiency in the payroll process, your payroll and HR systems should be integrated to allow seamless data transfers. The same applies to your bookkeeping and accounting tools. Therefore, it’s vital that an international payroll software solution provides an open API for integration with your favorite tools to improve global workflows.
When expanding internationally, it’s not always necessary nor recommended to set up a subsidiary, since incorporation can be a long and costly process and a big financial risk if the expansion project fails. A popular alternative is to hire local talent with an Employer of Record (EOR).
As the legal employer of your employees, the Employer of Record takes on all the legal and administrative responsibilities of the employment, while you stay in charge of your employee’s daily activities. At some point in the future, you may want to make use of an EOR service instead of setting up a local presence in a certain market. Then it will be a lot easier to have a global payroll solution that also offers EOR services.
Deciding whether to set up a local legal entity or to start by hiring local talent with an Employer of Record isn’t easy. Our blog post “EOR vs. Subsidiary - Which option for your business?” provides expert guidance on how to make the right choice.
Processing payroll and calculating the correct pay and deductions is only half the job. The other part of the process is making sure your global team gets paid. However, payroll solutions don’t necessarily include treasury services. What’s more, some countries don’t even allow payroll providers to issue payments to employees on the employer’s behalf. In this case - as well as when working with international contractors - businesses need a cost-effective solution for making global payments.
A global payroll solution should account for this and offer possibilities to issue international payments to employees and contractors all over the world without having to rely on slow and expensive SWIFT payments. A possible solution is a digital wallet like our Lano wallet, which allows fast international payments across 150 countries and in over 50 different currencies.
One of the latest global payroll trends is the increased importance of employee experience. In the war for global talent, business leaders have to make an effort to provide their employees with the best experience possible. This includes payroll. Although making sure your global workforce is paid on time is a key element, one might argue that timely payments are a commonly expected standard.
What’s new, however, is the increased use of self-service functions for employees. A global payroll software platform should provide access for employees and allow them to visualize their payslips, update their personal data and more. Self-service functions for employees are also beneficial for your business, since they free up resources for more important tasks if your payroll and HR teams don’t have to deal with minor employee requests.
Check out our related blog post to learn how Lano’s global payroll solution enhances employee experience.
There is hardly any business that only operates with full-time staff. Especially fast-growing start-ups and scale-ups, which are expanding rapidly, often rely on freelancers and contractors when they first set foot into a new market. Your contingent workforce also represents a significant cost in your global payroll and should therefore be accounted for in your payroll data. That’s why a global payroll solution should include both employees and contractors and provide consolidated data for your entire global workforce. Ideally, your multi-country payroll solution should come with additional contractor management tools.
Payroll data is highly sensitive and thus requires the highest protection standards available. When choosing a global payroll solution, organizations should carefully check the security of the payroll database to prevent data theft. Another aspect to check is compliance with data protection regulations. Data protection frameworks like the GDPR have a big impact on payroll, and organizations must make sure to comply with the legal requirements to avoid fines.
With these 12 criteria in mind, choosing an international payroll solution for your business should be a piece of cake. But before you go and spend countless hours researching and comparing available solutions to simplify your multi-country payroll, how about having a look at a global payroll solution that ticks all the boxes.
At Lano, we work with a network of experienced in-country payroll partners who offer their services in over 150 countries worldwide and ensure your payroll processes comply with all the local regulations. Our smart global payroll platform is designed to standardize and automate data flows from different providers - including those from our partner network as well as your own - and consolidate payroll data for your entire global team - freelancers and contractors included - on one single screen for full data transparency.
Running global payroll has never been easier. Plus, with our contractor management, Employer of Record and global payments solutions, you’ll have everything you need to manage your global workforce. Book a demo with our sales team to see our global payroll platform in action.
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