Things you should consider before implementing Multi-Country Payroll

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Things you should consider before implementing Multi-Country Payroll

In today’s world, businesses seeking to implement a multi-country payroll system have a multitude of choices. The decision-making process can be simplified by applying a systematic thought process and considering various factors, including the efficiency of current payroll solutions.

Businesses are unlikely to start from scratch as start-ups usually allow banks or accountants to handle their payroll with minimal effort. It would be beneficial to examine the current payroll system (whether in-house or outsourced) and identify areas for future efficiency gains with new deployments. These efficiencies are typically achieved through enhanced connectivity (as real-time and integrated as possible) and optimal processes, which may necessitate the introduction of new technologies and policy articulation.

New avenues in technology:

New technologies, such as Robotic Process Automation (RPA), offer exciting avenues for improvement. RPA simplifies the process of querying and seeking answers to questions that employees may have about the payroll system. It can intelligently connect with an employee’s calendar (say in Outlook) and warn them of meetings scheduled on a day that they may be applying for leave (in their HCM system) or nudge a meeting ahead when they are on the road and getting delayed. These functions increase awareness, accuracy etc.

RPA can work across all employee engagement functions including time management and greatly increase the automation and accuracy in recording data. . The immediate impact of this is that the feeds to the multi-country payroll system (of time data) are timely and accurate, reducing the need for manual intervention.

To Outsource or run Payroll on Cloud

The decision to outsource the payroll function or run it on a public cloud is another consideration. Organizations that have traditionally linked payroll incentives to production output or have complex shifts in manufacturing with varied allowances tend to handle payroll in-house. Those with standard payroll systems or payroll software may opt to outsource. 

Ramco has seen all models in delivery, with the highest value being cloud-based Human Resources Self Services and Manageable Global Payroll software solutions. In this model, the configuration of self-service, sensitive to a statutory region, is easily achieved. Managed Payroll hides the complexity of the data process, handles month-on-month changes (such as cost center changes or employee exits), and ensures compliance with statutory norms. This approach to payroll solutions ensures a smooth and efficient payroll system.

Selecting the right Payroll vendor

Harnessing new technologies is one way to look at choices in payroll solutions sourcing. The other is obsolescence of existing technologies and the expiry of extant contracts. Incumbent vendors (who have been providing services) may have difficulty keeping with statutory changes in a certain area or may not be able to adapt to new technology options without substantial and ongoing integration efforts. Clients should look for vendors who are always focused on automating repetitive tasks and leaving nothing to chance, understand a payroll system administrator’s job and simplify it, offer a range of horizontal support in the form of control reports, analytics, workflow and smart alerting.

Vendor’s financial records, product development methodology, strategic intent in the payroll system domain, recent business success, product documentation, staff are points to critically examine before making the decision. Vendors are also assessed for their ability to provide compliance in various countries that will avail the payroll solutions service. In the base of managed services, vendor’s ability to provide lodgement services in the countries in question must also be examined. Usually vendors would have local alliance partners for the same. While going in for Managed Services, ideally vendors must have ISAE certifications as well.

Benefits of Multi-country Payroll outsourcing

1. Increasing performance by enabling integration

Path-finding global payroll solutions enable multinational organisations to effectively manage payroll system with a centralised, unified data platform capable of integrating ancillary payroll system processes, other HR services, and financial wellness offerings. Such payroll solutions can offer real-time standardised processing of payroll system input data. Companies can manage their payroll system with a completely consolidated view and analysis of payroll system operations across all countries that they operate in, regardless of where an employee is based.

2. Providing global compliance

As businesses expand their global footprint, the need for global compliance and standardisation across jurisdictions becomes an increasingly important factor in their overall success. Companies that use centralised global payroll systems are able to strictly adhere to both local and global legislation. Amendments and updates to legal protocols and guidelines can be tracked and implemented uniquely in local payroll system process systems.

3. Expansion's complexities are being reduced.

A unified international payroll platform can reduce the complexities of global expansion significantly. The concept of a ‘single international payroll service provider to geographically unify an entire multinational organization's global payroll' opens the door to a customised and streamlined solution for all international payroll processing needs, freeing up time and resources to focus on moving forward. Furthermore, a payroll system like this will enable technology-enabled global operations convergence, minimising the challenges of scaling up.

Also Read: Managing Complexities of a Multi Country Payroll

4. Improving Employee Experience

Organizations have begun to recognise the importance of a payroll system that provides a unified employee experience. The single system of records provided by a unified multi-country payroll solution provides integrated employee data that can be a powerful tool to help drive strategy, increase agility, and improve employee engagement throughout your organisation. A unified payroll platform can assist businesses in achieving consistency in the services they provide to all of their employees. It will also provide a localised user interface that adheres to local time, currency, and language standards. Payroll check distribution will no longer be a problem with such a platform!

If the client were a globally distributed organization, however large or small, they would still have to debate on what would be a good starting point.

Would the starting point be on the basis of an expiring contract, maximum vendor inefficiency, and dramatic changes in statutory – these are all points to consider. In Ramco’s experience, clients often start with the most content, technically obsolescent site. This way the content (especially control reporting), roles, and process are preserved and the model is replicated on the new technology at all sites. Sometimes a choice is made in the most IT deficient but scaling site (dramatic headcount increases).

Holistically speaking technology, product, extant contracts, global locations, and all their readiness to migrate all factors in consideration. It’s good to work against articulated goals and develop timelines within which to achieve the same.

Above all, an error-free Payroll software with nil escalations is the ask of every business.

You can get more perspective about multi-country payroll solutions in this webinar co-presented by our customer General Electric, Global Payroll Association & Ramco Systems. Click here.