How global payroll can boost global business
Modern payroll platforms are cutting through cross-border payroll issues that erode business performance
Can global payroll truly exist in an era where business is increasingly international, and employees work from more places and locations than the office?
More specifically, organisations need a single, global payroll platform with configuration, scalability, and compliance across all sizes and locations to achieve flexible global payroll management. Is that achievable?
Business might go global, but payroll often remains very local. No matter which country one operates in, local regulations and requirements dictate payroll in that area. According to the 2021 “Getting the World Paid” survey, compliance is the biggest global payroll challenge.
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“The enormous amount of variable administration can make it very difficult to manage payrolls in different regions under one umbrella,” says Heinrich Swanepoel, Head of Growth at PaySpace by Deel. “Every territory has different requirements. Navigating those local requirements is tricky and creates layers of bureaucracy. It becomes very expensive once you operate in a few territories.”
Payroll dampens global business
According to Forrester, almost half of payroll administrators encountered substantial hidden costs when managing global payrolls. Compliance, language barriers, tax calculations, labour relations, and fluctuating exchange rates are among the culprits. But, the underlying issue is that different payroll administration is often fractured by necessity, relying on local representatives to manage that territory’s payroll on behalf of a company.
While that solves some of the problems, it’s impossible with traditional payroll systems to consolidate and centralise management on a global scale. Companies that achieve this do so with very fractured systems, incurring substantial costs and other risks.
“I’ve met many companies that want to expand into new regions but then reduce their plans or abandon them due to payroll management, transparency, or cost issues. That is a pity because they won’t have to have these problems if they used integrated payroll platforms,” says Swanepoel.
Global expansions are risky, and most companies don’t profit from their cross-border expansions. Any edge will help, and integrated global payroll management can turn overseas folly into victory. But what does integrated global payroll look like?
An integrated payroll system has several attributes, some laying the foundation for more advanced features. Centralisation helps companies reduce risks by consolidating their payroll data and processes. Using integration, companies can connect payroll with finance and human resource systems, further reducing administrative overhead—especially when they start to automate processes, says Swanepoel:
“Automation removes many manual checks that take time and create opportunities for payroll fraud. An integrated centralised payroll system exchanges information with other business systems. When you start automating processes based on those exchanges, you can run continuous payroll that operates efficiently throughout the month, not just at the end.”
Centralisation through integration and automation also delivers other benefits, such as standard data sets, centralised management and reporting, streamlined enrolment, and adding advanced features such as self-service portals for employees. Every business should aspire for an integrated payroll environment, not only those looking to go global.
Fixing global payroll
However, a centralised and integrated payroll system can sound much like regional payroll systems. These are not capable of handling global payroll needs. But there is a new breed of payroll system that can handle global requirements while supporting centralisation, integration, and automation, and it remains flexible and affordable—global payroll platforms.
“The best global payroll platforms have ways to overcome typical issues that in-house and traditional software cannot. For example, they monitor different regions for legislative changes and apply them to their platform, which reflects immediately for all their customers. You can only do this with a cloud-native multi-tenant platform. The payroll service provider runs the platform, and each customer company accesses a secure instance meant specifically for them. That way, every customer gets updates without needing to do anything.”
These platforms naturally incorporate features such as automation, single data standards, and controlled access so that different departments can access payroll information and reports. They effortlessly cross borders, accommodating different cultures, languages, and sovereign laws.
Deel is the very first payroll platform to have been able to achieve these goals and allocate the resources to create global payroll coverage. But there are exceptions. For example, Deel recently acquired payroll platform PaySpace to offer global payroll and employee-of-record services on one software-as-a-service platform that serves multiple regions. This revolutionary bundling and delivery are poised to change how organisations manage local and global payrolls.
“A cloud-native payroll platform radically reduces the costs and risks associated with managing global payroll,” says Swanepoel. “You get payroll systems tailored to each territory you operate in. But there is no fracturing because they all interconnect on the same platform, and costs are lower because you save by automating processes, reducing administration, and don’t have to chase legislative changes. If you pay people in different jurisdictions, you should use a cloud-native integrated payroll platform. There really is no better choice.”
