Things you should consider before implementing Multi-Country Payroll
by Rohit Mathur | 6 min read
There is a world of choices available today for those businesses seeking to implement a multi-country payroll system. There is a multitude of factors to consider too. The choice is not that complex if a systematic thought process is applied.
First, since businesses are not likely to start ground up (start-ups usually allow banks or accountants to handle their payroll with minimalist effort), it would be good to look at what’s good about the current payroll service (in-house or outsourced) and what sort of efficiencies must be derived for the future with new deployments. Efficiencies are usually gained through additional connectivity (as real-time and integrated as possible) and optimal process, both of which may require the introduction of new technologies and policy articulation.
Examine new technologies that are available. The latest in the line is Robotic Process Automation (RPA). RPA simplifies querying and seeking answers to questions that employees may have of the 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 throughput is, the feeds to payroll (of time data) are timely and accurate, reducing FTE needed in manual intervention.
Making a choice out of outsourcing the function, or, handle it centralized in a public cloud, is another consideration. Organizations that have traditionally been paying payroll incentives that are matched to production output or have complex shifts in manufacturing with varied allowances etc., have a tendency to handle payroll in-house. Those with standard payroll systems may outsource.
Ramco has seen all the models in delivery, the highest value being cloud-based Human Resources Self Services and Manageable Global Payroll. 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 (cost center changes or employee exits), and ensures compliance to statutory norms.
Harnessing new technologies is one way to look at choices in payroll sourcing. The other is obsolescence of existing technologies and the expiry of extant contracts. Incumbent vendors (who have been providing services) may have difficulty of 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 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 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 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.
Path-finding global payroll solutions enable multinational organisations to effectively manage payroll with a centralised, unified data platform capable of integrating ancillary payroll processes, other HR services, and financial wellness offerings. Such solutions can offer real-time standardised processing of payroll input data. Companies can manage their payroll with a completely consolidated view and analysis of payroll operations across all countries that they operate in, regardless of where an employee is based.
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 process systems.
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.
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.