Global Payroll: The Common Challenges and How to Overcome Them

Nothing worth having comes easy, especially when it’s something as big as implementing a global payroll system for the first time in your company. You’re going to encounter a few challenges along the way. Some of these challenges will be specific to your circumstances while some will be the same that every multinational face in its quest to go global with its payroll.

We’re here to talk about the latter to suggest ways on how you can overcome them.

Challenge #1: Internal resistance

Resistance is inevitable. Expect it and be prepared for it. This is a significant transformation that you’re rolling out. Your current in-house payroll professionals are not going to be comfortable with it. It’s them who will have to face the prospect of “unlearning” and “adopting” new practices, codes and approach. They would try their best to resist it.

The solution…

Communication is the key here.

Take your payroll staff in confidence well before you’ve started planning such a move. Explain to them the benefits of the project. Introduce them to the new development and training opportunities they will be exposed to as part of the project.

If possible, arrange a pre-launch event and bring the international payroll teams on board to help increase engagement from the get go.

Pay bump or retention incentives can be considered if you’re worried about losing your key members due to the move.

Challenge #2: Finding the right balance between lean and standardization

This can be one hard nut to crack. Streamline your local payroll processes too much and you run the risk of losing the compliance lead established by your local legislation.

In addition, you may well lose “lean” from your operations. Keep standardization to a minimum and are you really making the switch to a global payroll?

The solution…  

There are accounting software solutions available in the market that can handle core payroll processes for all countries centrally while respecting the individual jurisdictional differences of each territory.

You can also outsource your payroll operations, but you need to be careful of the vendors you choose. Some vendors have their own outsourcing backbone to deliver payroll services in multiple countries while others act as aggregators. Both approaches have their pros and cons. Determine your needs and make a decision that best suits those needs.

Challenge #3: Data management and reporting

This is another common challenge that multinational companies have to face when moving to a global payroll system. Concerns regarding data integrity remain as strong as ever, which can affect the flow and exchange of data between global resources. This in turn can create discrepancies in the data records and as a result payroll processing and reporting can suffer.

The solution…  

The first thing you need to do is find a solution to centralize your payroll data. Fortunately, there are unified global payroll solutions available in the market that let you pull all the data into one place.

With the issue of centralization solved, you need to think about maintaining data quality. For that, you can hire additional staff which will continuously monitor the exported and imported records to make sure there aren’t any discrepancies.

Challenge #4: Keeping down project costs

Make no mistake; implementing a global payroll does not come cheap (but then what good thing does?).

Be prepared to pump money in areas like employee training, new software and IT infrastructure upgrades. You might even have to bring new hires on board if your current payroll staff has decided to leave. All these expenses can add up and make for one big ticket.

The solution…

Thankfully, there are ways you can keep the project costs down. For example, you might want to consider opting for cloud-based accounting software, like QuickBooks hosting, which can considerably reduce your investment in software installation and set up.

As previously discussed, you can also outsource your operations to an international payroll service provider. This would help you save money on employee training and any potential hirings. Be careful, though, since some payroll companies can charge you unfairly and you can end paying more than what you should be originally paying.

Closing words   

Going global with your payroll comes with risks—but the rewards and benefits far outweigh those risks. Identifying the likely hurdles on the road and planning for them in advance will help your payroll project become the success that it’s meant to be.

Here, at gotomyerp, we’ve helped many clients move to an international payroll system through our reliable QuickBooks hosting services. Get in touch with us today to discuss your global payroll project.