Time to Rethink Your Global Payroll Strategy: Part I
Mar 27, 2014
In today’s business environment, it is increasingly common for companies to establish operations in new markets and hire employees beyond their own borders. In doing so, they are often met with the significant challenges of handling payroll for employees in different countries, often with their own unique languages, cultures and currencies. Not only that, but when employers disperse payments to multiple countries, they must do so in compliance with the multitude of rules and regulations regarding cross-border payments, many of which change rapidly and can differ from city to city within a country.
As the economy continues to become a truly global one, and employers increasingly leverage the world workforce to find talent, it is time to rethink how companies compensate their increasingly international employees. Multinationals typically maintain multiple bank accounts for each location they employ workers, which requires significant resources and different entities handling payments on their behalf. Yet, when payroll is processed in this method, the company lacks flexibility and loses the opportunity to make any last minute changes.
Whether the company is big or small, all of these challenges can jeopardize the success of the payroll operation and bring unnecessary costs. Just consider a company with employees across 16 countries, involving 10 different currencies. In addition to the costs of maintaining multiple accounts and 16 separate sets of transaction fees for each pay period, the company is also subjected to the fluctuations of the various currency markets.
As this old-fashioned model fails to deliver the flexibility and efficiencies needed to remain competitive, more multinational companies have sought to modernize their global payroll function and streamline the way they compensate their international employee base. Many have recognized the benefits of utilizing a single platform for their global payroll function, one that automates the payroll process across all locations in which they have employees. With such a solution in place, companies can greatly improve the payroll process, cut costs and mitigate the security risk that can arise when third parties are involved. Most importantly, with a centralized platform, the company benefits from a consistent process, while maintaining full control of its payroll operations.
As companies continue to expand overseas, they must be able to utilize the technology that can facilitate their HR processes, and compensation is often a top concern. To learn more about how a centralized platform can enhance the global payroll function, stay tuned for our next post!