Jean-Luc Barbier, VP Global Solutions at SD Worx
Payroll is a crucial part of any multinational organisation. When payroll is done right, it truly unlocks the power of payroll within the business, but when operating in multiple regions and localities, the risks of something going wrong increase, as do their consequences.
You only need to look at the example of social media giant Facebook to see how the mishandling of data can have a disastrous effect on an organisation’s brand image and to understand the risks involved when it comes to responsibly managing employee data. Ensuring efficient running of payroll can be a daunting task to confront.
So, what are the risks involved with international payroll, and how can payroll professionals avoid these costly mistakes?
Time-Consuming Manual Processes
Beyond running monthly payroll and handling vast amounts of data, there is also a lot of admin associated with payroll, which can become incredibly time-consuming for the department. To avoid this mundane distraction, organisations must look to HR technology such as artificial intelligence (AI) and automation.
With the current hype in the media, many fear that AI will replace the jobs of humans, but instead the development and introduction of AI has the potential to amplify the human workforce. It’s best to leave the robots and AI to what they do best, and let humans continue the human roles. HR tech has the potential to free up the HR and payroll professional from their never-ending admin so they can efficiently and more accurately handle the tasks.
Rather than wasting time scheduling meetings, booking holidays and setting up ‘Out of Office’ notifications, turning to technologies like AI-powered Digital Assistants eliminates this part of the role. It reduces the chance of human error and the associated risks, and then allows the human workforce to focus on putting the ‘human’ in Human Resources.
Incoherent Payroll Data
As organisations expand into new regions, running payroll naturally becomes more complex. Operating on a local scale with multiple providers can be a headache for payroll teams, with a disparate collection of data that seems impossible to collate.
So, when an organisation becomes multinational, the payroll must too. Turning to a global payroll provider eliminates the stress of managing a host of local providers on a global scale, instead striking the perfect balance between detailed local payroll with the ease of a single global operation.
With one global provider, one contract and one partnership, data is presented on a single, easy to understand dashboard. Not only does this minimise the stress involved for the payroll professionals, but it also unlocks the power of payroll within the organisation as it becomes much easier to gain insight.
In a recent SD Worx survey, it was revealed that 40% of HR and payroll professionals found it ‘difficult’ or ‘very difficult’ to provide data to business leaders. But with a unified and global payroll model the data can be introduced into the boardroom, aiding executive business decisions such as international expansion, as well as providing insight into employee engagement in various locations.
Damaging Non-Compliance Fines
The payroll industry never stands still, with new legislations and laws constantly being introduced around the globe. Non-compliance is one of the greatest mistakes an organisation can make when it comes to payroll. And, when operating on a global scale, this risk only increases. For example, the recent introduction of GDPR in the EU means organisations face potential fines of up to €20m or 4% of their global revenue.
For HR and payroll professionals to understand how local legislations affect their data handling in every locality is a huge undertaking – experts are required for every location. Working with a global payroll provider means the HR and payroll department can rest assured that they are compliant around the world without having to worry about understanding the ever-changing laws that affect their business. Additionally, with service providers using automation and other HR tech, the risk of non-compliance due human error is significantly minimised.
Payroll can certainly be a risky business in today’s international world. However, working with global payroll providers can minimise the risk, increase the efficiency and ensure that the humans remain a valuable part of the payroll process within multinational organisations.