The best organizations are rooted in routine: it’s how they get things done. The task might be simple, such as completing a timesheet or signing a document, but there’s a process. These routines guide us. In crisis or uncertainty, organizations need to adapt quickly. Never has that been truer than with the global pandemic. Organizations scramble, experiment, and land on alternative ways of working. The question is, how do you build organizational resilience when it comes to a high-stakes area like employee pay?
Much has been written about engaging employees; it’s well documented that employee productivity plummets when retention risks increase. And, there’s nothing more important to employees than getting their wages, on-time and accurately. That requirement – and challenge – is amplified when employees are dispersed around the globe. Unifying payroll and payments can help unify the modern workforce as well; streamlining tax and labor complexities for the employer and raising employee confidence. It’s become even more important during the global pandemic’s challenges and the crying need for organizations to centralize business-critical functions digitally, fast.
Global Payroll and Remote Working Routines
2020 was the game-changer year for payroll. Organizations, for example, experienced upheaval of their routines and distribution of their employees. Added to the impact of COVID-19 and the sudden shift to sheltering at home has been socioeconomic instability given political and social unrest in previously staid markets. On the worker level, stress and high levels of burnout abound, as employees lost the benefits of face-to-face interactions with colleagues and managers. Further to the decline in morale and increase in confusion were furloughs, layoffs and redeployment of talent. Payroll became the single source of truth in organizations: the connective thread between employer and employee.
As organizations look to post-pandemic recovery, there are and will continue to be many changes. Employees have new expectations shaped by the uncertainties they’ve experienced. Financial stress is on the rise, especially among Millennials, who were particularly hard hit. According to Charles Schwab’s 2020 Modern Wealth Survey, 57 percent of Americans say COVID-19 has financially impacted them or a close family member. In addition to their heightened focus on financial wellness, employees require reassurance and empathy from their employer, qualities that are even more important during a crisis.
International Employees, New Expectations
From new expectations come new ways of living. Employees fled cities to live in the suburbs as the former became centers of the virus. Such unanticipated changes in location – whether short-term or longer – have resulted in worries for already stretched HR and payroll professionals grappling with the related tax implications. Women have left the workforce in droves during COVID-19 due to family pressures such as homeschooling children and balancing eldercare. The May 2020 U.S. Labor Report cited a shocking 2,651,000 women left the workforce at the start of the pandemic. Often, it’s these same workers who held service occupation jobs, crippling categories that were already in trouble.
With all of these changes and to the degree to which they’ve occurred, it’s readily apparent why unifying payroll and payments is a practical necessity. Having one system of record ensures data integrity, pay processing timeliness, and payroll and payments accuracy. The model reinvents traditional payroll, moving it from a decentralized model with varying process maturity levels to an elegant, centralized technology-driven standardized operation. Consolidating on a single platform means employees, managers and employers gain certainty in uncertain times through better tax and compliance reporting. Increased automation and digital transformation make for a more modern employer brand, attracting and retaining employees. And employees are empowered, loyal and more productive.
Process automation is just one of the areas of improvement to consider. Single-person dependencies were uncovered by the pandemic. For example, companies had not anticipated the number of unemployment claims and teams that did not have cross-trained staff couldn’t meet the corresponding deadlines. Plus, documentation locked away in file cabinets was of little use to those dealing with these high-volume situations. Yet, another ringing endorsement for building one unified digital platform that can support organizational resilience.
Taking Global Payroll Beyond Compliance
A well-designed global payroll strategy isn’t an initiative lightly taken. Few organizations were fully prepared for the pandemic. Moving to this desired state requires careful consideration, especially in selecting the right outsourcing partner that can provide both treasury and payroll services. COVID-19 uncovered many moving parts and fragmentation. Isn’t it time to take those lessons to heart and document people, processes and procedures? Paying your employees on time and accurately goes beyond meeting your compliance and regulatory requirements. Organizations that deal with fast-evolving situations know that it pays to prepare for the unexpected and build robust global strategies. A unified payroll platform ensures your organization is more resilient in the face of extraordinary challenges.
David Barak is the Chief Marketing Officer at global payroll and treasury services provider, CloudPay. He leads a global team focused on communication, brand strategy, HCM ecosystem partnerships, and HR technology integrations.
This article first appeared in International Investor Magazine