Why you need one global payroll services provider

The COVID-19 pandemic hasn’t been kind to businesses of any size. For 74 per cent of global businesses still running multiple systems across multiple geographies, the often-overnight change to remote working and demand for greater reporting speed and accuracy saw many of them struggle to adapt.[1] Large organisations are finding it difficult to access accurate, reliable data needed to make global decisions, and face a constant risk of damaging fines for failing to meet compliance demands. Despite the glaring weaknesses of many global payroll systems, payroll makes up about 60 per cent of company spend, and is often neglected.[2]

What international businesses want

A recent ADP global payroll survey of international businesses found common themes in their payroll wish list:

• More robust reporting analytics – to inform company strategy and planning
• Faster reporting – to supply information when needed
• Enhanced data security – to improve compliance
• Streamlined payroll processes – to lower errors and costs while improving employee satisfaction.[3]

But as the old adage attributed to Henry Ford goes, “If you do what you’ve always done, you’ll get what you’ve always got.” Combine the fallout from COVID-19: extraordinary global financial turmoil, privacy and security risks, the four-fold increase in payroll-related regulations in just 30 days, together with a costly, obsolete payroll system, and you’re asking for trouble.[4]

What is global payroll?

In case you’re wondering, global payroll describes the process of paying your employees in multiple countries. The ideal is to have one single payroll solution which centralises reporting and runs payroll efficiently across multiple countries and territories. Sounds great in theory, but why are international businesses facing so many global payroll challenges coming out of the pandemic?

Challenges for global payroll post-COVID

ADP identified three key areas for improvement for large organisations who are still using on-premise payroll or vendors who aren’t fit for purpose:

Optimisation

If you’re running disparate, patchwork systems, you’re more likely to be asked for more data more frequently by senior management, as the information provided will be inconsistent and difficult to interpret. In comparison, the 14 per cent of businesses with truly global payroll management fully integrated with their HR and finance systems encountered less complexity and were able to optimise their costs.

Visibility

The second key challenge is visibility, as running multiple systems with little integration leads to a limited view of payroll. Without clear visibility of their costs, 73 per cent of the survey respondents simply didn’t have the payroll data at their fingertips to inform the strategic direction of their company.[5]

Agility

The third issue is agility, with 61 per cent of businesses unable to adapt payroll to meet their specific needs during the pandemic. However, with a unified global payroll system, teams had the agility to analyse configurable and consolidated data quickly and take action accordingly. With global markets often in a state of flux, this ability to provide an instant report at a moment’s notice is invaluable. Yet the ADP survey found that 70 per cent of businesses feel unprepared for any future disruption or major regulatory changes.[6]

Time to outsource?

According to ADP’s research, 75 per cent of business leaders are ready to consider outsourcing all or most of their payroll processes.[7] Heartening, too, is the finding that 97 per cent see payroll information as a major consideration in cost management strategies, with 87 per cent viewing payroll as a fundamental part of their commercial and growth objectives. Outsourcing your global payroll services to a trusted third-party expert is a vital part of this process. Why?

Outsourcing to the right global payroll services provider brings with it many benefits that on-premise solutions just can’t touch.

The benefits of outsourcing

• 19 per cent of respondents found that using in-house solutions opened their business up to risk when attempting to manage compliance themselves. This figure drops to just two per cent for businesses outsourcing their global payroll.[8]
• A scalable, cloud-based, unified solution grows with your business. Day-to-day it pays staff in a secure, timely and efficient manner, providing international payroll solutions tailored to local needs, coupled with single view multicountry payroll data for sharper insights and payroll experts to keep you compliant.
• A study conducted by Forrester Consulting for ADP found that international organisations with ADP’s global payroll solution saw a 134 per cent return on investment, a reduction in payroll processing effort of up to 75 per cent, and an avoidance of compliance costs of $1.8 million.[9]

Why use a global payroll services provider?

Outsourcing your global payroll saves valuable time by supporting your regulatory responsibilities, reducing your compliance risk, enhancing agility, and helping you to fill any skills gaps without the cost of recruitment.[10] Coupled with that, a simplified global payroll process which is fully integrated with your HR and finance systems not only reduces complexity, but also lowers costs, as you’re no longer paying for unnecessary software.

According to a 2019 EY Global Payroll Survey, 65 per cent of HR and payroll leaders agree that a truly global delivery model would bring significant benefits to their organisation. Buyers of a global payroll services provider saw over 32 per cent average savings from process optimisation, over 20 per cent savings through standardisation and 50 per cent resource reduction from better productivity.[11]

The role of data

Important, too, are the leadership implications of having one, consistent, accurate source of information. With total visibility over payroll comes a clearer picture of the strategic direction your enterprise needs to take. Imagine having the resources, insights and accurate forecasting to be proactive, rather than reactive – crucial qualities in the turbulent trading conditions we’re all navigating.

Becoming more agile

While we’re talking about agility, multinationals who have optimised and simplified their payroll systems are quicker to react and more efficient than those juggling several solutions. Simpler processes and an integrated global payroll system enable your teams to scale and adapt more easily to support growth.[12] Plus, agile payroll can improve the employee experience by adapting quickly to changing employee preferences and new ways of working. With updated payroll systems, payroll staff can work remotely across borders, while an optimised global payroll is better able to support popular benefits, such as flexitime.[13]

What change means for your business

As we all emerge from the COVID-19 pandemic, one thing for sure is that the old ways of conducting business have been truly upended, and this includes payroll. ADP’s research reveals that companies feel an optimised global payroll system enables their staff to move from just processing payroll to act more like data analysts – providing insights to inform future strategy. This has far-reaching implications.

The onus is on companies now to seize the day and create a global payroll system that’s agile and flexible enough to deal with any upcoming challenges, whether another health or economic crisis, or new business opportunities. With 60 per cent of payroll professionals agreeing that a truly global payroll model would benefit their organisation, the time is right to create a strategic role for payroll, moving it from the back office to front and centre. [14] This can only help to drive the business forward - rather than simply keeping it afloat.

Build back stronger with the right global payroll services provider

Global payroll management can be a challenge if left in the wrong hands. But with the right global payroll services provider such as ADP you have the software, tools, and advice to help your business become more resilient and cost-effective.

ADP has a global footprint in 140 countries and is trusted by over 90 per cent of Fortune 100 companies to safely pay over 68 million employees worldwide.  If you’d like to talk to our experts about how to process international payroll, please get in touch.