Understanding how best to implement and utilize global payroll is essential for enterprises of all sizes planning to expand and enter new markets, particularly into places other than their ‘home’ country.
In short, an effective global payroll platform is the means by which enterprises operating in multiple regions can ensure that workers are hired, paid, and taxed in compliance with local labour laws, without the need to establish a legal entity or set up a local HR team.
An effective and efficient global payroll platform can deliver significant benefits to businesses of all sizes, and across all industries and sectors, so it makes sense to ensure that your current (or planned) payroll system delivers for you in a number of key areas. We have outlined five of these areas below.
Reason 1: You need to access payroll information remotely
A global payroll platform means that you are always able to access essential payroll and other data from anywhere in the world, without the need for a team on the ground in every location.
In this way, remote access global payroll gives you great flexibility both in terms of where you hire workers, but also the conditions under which they are employed. It enables you to take on full time employees, independent contractors, remote and gig workers, as well as on-demand hires, and be able to have full access to the necessary data not only to remunerate them correctly but also to ensure that you are in compliance with local legislation.
In addition, real time remote access to payroll data ensures that you have an accurate, up-to-date picture of labor costs and overheads, enabling you to make informed staffing decisions, even for teams based on the other side of the world.
Reason 2: You’re planning on expanding globally
When a business is expanding, it faces significant challenges on a number of fronts, so any steps that can be taken to minimise these difficulties are to be welcomed.
Having a global payroll platform in place should therefore be seen as an essential tool in making a move into a new country more cost-effective and efficient as it will remove a major difficulty, namely ensuring compliance.
All countries have their own distinct labour laws with regard to classification of workers, pay rates, sick leave and time off allowances, termination procedures and more. For a startup, SME, or any enterprise unfamiliar with the specific regulations in a region, there is always the danger that you unwittingly contravene local legislation and incur financial penalties — or worse.
However, implementing a global payroll platform that is designed specifically for managing payroll in multiple locations simultaneously means that you avoid this risk. It also enables you to more easily adapt to dealing with a range of different currencies, languages, pay cycles and regulations simultaneously.
Cloud-based global payroll platforms also mean that you can significantly reduce costs by not having to relocate HR and finance staff specially to manage payroll, or hiring a local HR team, both of which can be a considerable burden when you are a startup or initially launching in a new location (see https://www.papayaglobal.com/what-is-global-payroll/ for more details on the advantages of putting global payroll in the cloud.).
Reason 3: You need a complete payroll solution together with HR management
A global payroll system also needs to incorporate a range of other functions beyond simply paying workers if it is to do all that you require.
Key amongst these is that it should also enable the effective, remote management of human resources operations. For instance, it should automatically ensure that any new hires (whether full time, independent contractors or remote workers) have been hired in compliance with local labour laws, and that they are being compensated in line with any statutory requirements.
Your global payroll platform should also be designed to make onboarding new staff as efficient as possible, minimising paperwork and enabling new hires to get to work straight away.
Ideally, any platform that you use should also have a secure portal that gives local employees a degree of access so that they can see their own payslips, time attendance reports, and update personal data as required.
In addition, a global payroll platform can also be configured to provide invaluable HR data that can be accessed remotely by management in order to inform decision making. For instance, this information can provide a clear, real time picture of the labour costs in any given location, give you insights as to staff retention rates, indicate how diverse your workforce is, etc.
Having a global payroll platform that offers the sort of functions that would otherwise have to be performed by HR staff on the ground therefore means you are able to streamline operational costs (essential in the early phases of any expansion), while still being able to access top talent and get them onboard as efficiently as possible.
Reason 4: Your payroll process needs to be optimized and automated
When you don’t have an in-country team managing HR and payroll, you nevertheless still need to have real time access to a range of information associated with labour and staff costs. A global payroll platform should, however, be able to remotely provide all of this information — and more.
This will enable management at any time to see and understand how much it costs in real terms to employ workers in any given location, and provide appropriate reports, analysis and other data.
At the same time, a global payroll platform should also be able to be integrated seamlessly with any existing payroll systems, and provide you with options as to how workers are to be paid.
Employees, too, should be able to have some access to the system in order to see their entitlements or update personal information, and these procedures should be automated so that human intervention on the part of HR staff is not required.
Reason 5: You need to get more value per cost
A crucial function of a global payroll platform is that it rationalizes costs and makes it more cost-effective both to expand and to hire staff in overseas locations.
By making onboarding more efficient, compliance more straightforward, and reducing the need to establish local HR teams to manage the workforce, a remote global payroll platform delivers cost efficiencies and time savings that can instead be directed towards operations.
If you combine global payroll platform with using the services of an employer of record (EOR) to hire workers in foreign locations, you also save on the significant time and costs that can be associated with setting up a legal entity in a new country or a foreign subsidiary.