The top 3 challenges for payroll professionals worldwide
Article 4 minute read

The top 3 challenges for payroll professionals worldwide

31 January 2018

We asked global payroll professionals about their current struggles in managing multi-country payroll – here’s what they told us.

Ensuring all employees in a multinational company are paid when they should be, and in accordance with all relevant laws and regulations is no mean feat. Not when you consider the many odds that global and in-country payroll professionals are up against.

We’ve analysed the results of our second annual survey with the Global Payroll Association to arrive at these top three challenges which are currently faced by payroll professionals worldwide.

1. Lack of knowledge about local regulations

This is – obviously – a serious one, because not being on top of the necessary in-country payroll rules can have wider-reaching repercussions for a business in areas including compliance. And the situation is only getting worse as regulations across the world become increasingly complex.

A multinational company once came to me for help after receiving a large fine in South America for the way it was processing its expenses within the region. In essence, it had no formal system in place, let alone adherence to local payroll regulations. The situation became out of control, and the company was hit with a penalty for repeated non-compliance amounting to hundreds of thousands of dollars.

It’s no wonder a huge, four out of five (79.3%) of the payroll professionals that we surveyed said they valued having an in-country contact – like ourselves – who speaks the local language and understands the local payroll rules to help them operate effectively, while adhering to all necessary regulations.

2. Vendor management

Vendor management is an issue that is rising up the payroll agenda, as reflected in its second-place ranking compared to third in last year’s survey results. Common problem areas that professionals tell us their teams are increasingly encountering include:

  • Inaccessible account managers
  • Slow and inefficient problem escalation procedures
  • Lack of coordination of deliverables across multiple contracts.

If you’re experiencing these issues with your payroll vendors, it’s likely time for you to evaluate your chosen delivery model. Understand the capabilities of shared service centres and where they might be limited, compared to a payroll provider with a wholly-owned network of offices. I’m pleased to say this is the category that TMF Group falls in to – we can deliver to all the countries that our clients require using our own people.

3. Inconsistent policies and processes

Do you have global policies that apply to all payrolls? Seven out of 10 (69.4%) of the professionals we surveyed said they have gaps both in global policies and in processes.

This is not surprising when you consider the swift-yet-small way in which businesses enter new markets. Typically in a new country, you’ll start off with a low headcount limited resources – not enough for a local legal and HR department to ensure your payroll procedures are truly aligned from day one.

What’s important is that you don’t just continue to ‘get by’ in a new market, but take steps to implement appropriate controls so you remain on the right side of the local authorities. TMF Group can support not just with HR and payroll, but also entity management and accounting and tax services, making it easier for businesses to grow in new markets with a solid foundation.

Read more results by downloading the report: Change is coming: the annual global payroll survey.

Find out how our HR and payroll services can help drive efficiency in your business.

Written by

Darren Beal

Former Portfolio Director

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