How To Identify and Address Payroll Client Pain Points

Employees receiving their pay promptly and correctly is undoubtedly a core component of any payroll process - but it’s not the only one that needs to be considered. Changing expectations from both the businesses and the employees means that payroll is shifting from something traditionally regarded as a back-office function to becoming more of a strategic business partner.

Business Scalability and Payroll

For teams operating globally, payroll processes need to be able to scale efficiently to keep up with business growth. Organisations don’t want to lose their ability to remain agile, and accessing data in real time remains central to obtaining, and responding to, insights from all areas of the organisation. Challenges around harnessing data can often arise when a system designed for a smaller business is used within a larger, or more disparately located, business - and risks data being siloed.

In businesses today, centralising data and breaking down these siloed barriers is a critical task when it comes to payroll, without it, manual checks can lead to human errors, and ultimately add to the risk that employees won’t be paid on time - eroding trust - or that tax or compliance rules are overlooked or missed entirely.

Managing payroll on a global scale is complex and the greater the number of countries involved then the greater the level of complexity and room for error is. For rapidly expanding businesses, payroll becomes an increasingly resource-demanding task.

Using a payroll partner who can navigate these challenges gives an organisation increased confidence that their people can be paid on time, every time. This is also true when it comes to considering talent management challenges and retention, as a study by UKG reveals that nearly 50% of employees will seek a new job after only two payroll errors - and that one payroll error can cost an average of $3,200 and 29 hours to resolve (source Eyquest).

There are also generational differences to consider in each workforce, with younger employees being much less willing to stay with their employer should mistakes happen, even if errors are corrected right away. And it is not just concerns around employees being paid on time that worries employers, regulatory and tax issues can also stem from a mismanaged payroll process.

Compliance in International Payroll

Legislation is always evolving and it can be more of a challenge to stay ahead of changing policies whilst central business resources get to grips with numerous, new legislative regimes. Tax legislation is notoriously complex, and there can be several levels of rules and regulations to follow in a single country, let alone what comes with expanding across borders.

Compliance issues now go to the very top of organisations, with Chief Compliance Officers responsible for both ensuring compliance is achieved and working with management teams to monitor the importance of payroll growth. Interestingly, KPMG’s 2023 CCO Survey found that new regulatory requirements are the greatest compliance challenge - therefore we argue that a good payroll solution can help to alleviate such associated headaches.

Outsourcing Payroll Services

Some larger companies have multiple payroll experts but many organisations looking to expand their international operations lack the necessary expertise required. It is costly to hire an internal specialist each time one is needed, so outsourcing the job to external specialists in the form of Multi-Country Payroll providers (MCP) allows for flexibility and increased levels of cost efficiencies for businesses.

MCP providers can help to consolidate solutions regardless of location, using centralised control and standard procedures. Using multiple providers means multiple processes, so it's not easy to manage how a payroll process operates, so using one provider ensures consistency when it comes to the processing of information, regardless of varying country requirements. If the fundamental processing of data is not managed effectively then the rest of the process will not function efficiently, which leads to more problems.

Globalisation is here to stay and over the coming years, the need for local expertise will increase as organisations continue to expand internationally, explore new markets and connect with an ever-evolving customer base. Successful future payroll systems will depend on the ability to harness local expertise within global businesses, which is not an area that AI has the ability to solve.

The Power of Partnerships

A good payroll process comes down to the partnership that exists between the client and their chosen provider. Change takes time, and businesses need partners who can manage them long-term, who are reliable and who can support them in the challenges that they face. This means taking on the heavy lifting when it comes to managing payroll, payments, global mobility and HR. Partners should become an extension of their clients, helping their varying needs and offloading many of their critical payroll and HR tasks to make the process more seamless.

Mitigating Human Error in Payroll Process

For even the most experienced payroll professionals, the administrative burden can be enormous due to the sheer amount of data being processed and, as a result, human error is likely to be an unavoidable consequence of time-pressured individuals. Technology can greatly reduce room for error, but it is only one part of the puzzle. What complements technology perfectly is adding the human expertise to overcome the hurdles that are associated with multi-country operations.

Addressing payroll pain points is more about having the right people, processes and technology in place to navigate potential complexities and meet the needs of all stakeholders - something that we pride ourselves on at activpayroll.

Organisations can spend years trying to figure out how best to manage global payroll operations, but sometimes, the right partner is all you need.

Our global VOICE approach leverages insights from payroll and mobility experts to navigate HR complexities and deliver results. This includes Visibility, Outcomes, Integration, Compliance and Experience.

To find out more about the activpayroll difference, our partnership approach and how we can help you on the journey to a better payroll, visit our website. (https://www.activpayroll.com/)