The changing nature of global payroll

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As a business expands its operations around the world, it must navigate a number of challenges. Each new office can present a different set of opportunities – and a different set of legislative requirements. From a people perspective, a combination of local hires as well as expat employees from the head office is critical to ensure a successful expansion plan. 

However, this typically results in an enormous amount of paperwork and administration as various contracts need drafting, checking and approval in each country of operation. A further complication is the need to adhere to data protection policies such as the General Data Protection Regulation (GDPR) which, among other things, impacts how employee information can be stored and used. 

Fortunately, the rapid advancement of the cloud has not only enhanced how many businesses manage their day-to-day operations, it has enabled international companies to transcend geographical borders and centralise their core functions. The payroll department, for example, can sit in the head office and seamlessly integrate with the company’s other offices and departments around the world. 

A global payroll solution, either managed in-house or entrusted to a single service provider, presents a huge step forward for international businesses. It relieves payroll and HR departments of a hefty administrative workload and reduces the number of service contracts that need processing and managing. 

That said, to get the most from your global payroll solution, you need to consider the best approach for your business. Here are four of the most important practices and policies trending for global payroll in 2018 and beyond. 

1. Data protection and encryption

In May 2018, the General Data Protection Regulation (GDPR) came into effect and changed how businesses around the world manage their data. While the GDPR focuses primarily on customer data, it also extends to the data businesses keep on their employees. Its mandate is to protect the personal information of EU citizens – regardless of where in the world they are based. So if your company employs EU citizens in its Nairobi office your payroll processes now need to comply with GDPR legislation, as well as local Kenyan legislation.  

Achieving – and maintaining - GDPR compliance is not a simple task. Many payroll managers are under increased stress as they shoulder new responsibilities. Working with a payroll provider that is already GDPR compliant is a great way to share the load and maintain adherence to the law.

A payroll provider can also assist businesses to manage their data security. Stricter data protection legislation means that employee records need to be retained for much longer. And data encryption now needs to meet a much higher standard. Employers don’t have to manage all this on their own – a payroll software provider can help companies keep their data secure. 

2. Collaboration and self-service

Cloud technology is enabling global employee self-service systems. These mobile-friendly payroll systems make it much easier for employees and managers to access payroll and HR data from anywhere at any time. All they need is a smart device and an internet connection.

Employees are also able to set up their profile in the language of their choice. As payroll services become more personal, there will be fewer communication barriers within global businesses. This is key to improving collaboration between teams and offices around the world. 

Not only can each employee access their payroll and HR information with greater clarity, teams can work together across multiple locations and time zones. Using real-time information, colleagues won’t have to hunt for the latest information and will always be up-to-date.

3. Outsourcing and global expansion

Back in the day, an expanding business had to hire in-country payroll teams and work with local service providers to establish their new offices. HR departments and procurement teams were snowed under as they grappled with complex payroll and recruitment needs in foreign countries. They had to deal with an enormous amount of administrative work, managing reams of contracts and paperwork. 

Of course, the power of the cloud technologies had made things much easier for HR and payroll professionals. Cloud-based payroll software, for example, means that your company can now manage its global payroll from one home-base. There is no need to establish in-country payroll teams – or to manage contracts with different service providers across multiple offices. 

As an added benefit, outsourcing certain processes to a specialist payroll provider ensures 100% compliance. Their expertise in multilayer governance provides a level of legislative oversight and knowledge that will support your business growth. With a team of always-on payroll professionals by your side, your company can expand quickly and efficiently. 

In no way does this make your payroll department redundant. In fact, by outsourcing your payroll, your in-house team will have less administrative work and more time to focus on strategic, value-adding work. 

4. The new-age payroll manager

As the digital age transforms the payroll landscape, the role of the payroll manager is changing too. Payroll professionals need to enhance their agility on the job, stay curious and embrace new technologies that are relevant to their business needs. The industry as a whole is evolving rapidly and global payroll solutions are enabling businesses to achieve more in a much faster timeframe. 

Given the complexity of implementing and managing a multinational payroll, today’s administrators have to be switched on. Their job now requires them to analyse information, identify trends and patterns and make recommendations for improvement. Fortunately, access to information and automated administrative assistance is increasing. As such, payroll managers no longer need to dedicate most of their time to data entry tasks and can focus on business-critical work.

To achieve this, payroll teams need to step out of their comfort zones, work closely with other departments and invest in digital innovation. If payroll operates in a silo or ignores new technologies, it will negatively impact your business’ competitive position in the market. 

International businesses need the right skills, knowledge and attitude to expand successfully into new markets. Key to this is adopting the right technology and working with a payroll provider that can provide data-driven support. Global payroll need not be a challenge, but rather an enabler of bigger and better business success.  

Bruce van Wyk, Director of PaySpace 

Image Credit: 889520 / Pixabay