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How to Manage Payroll on a Global Scale

How to Manage Payroll on a Global Scale

Payroll: Every successful business owner recognizes how important it is to pay employees correctly and on time. A disgruntled workforce creates a productivity disaster. Payroll is something you want to get right the first time, every time.

The challenges of managing payroll for a global workforce are exponentially more difficult. Every country in which you hire employees comes a unique and indeed, foreign, set of rules. Fail to follow those rules, and you will pay the price.

As is true with every facet of running a successful business, a global payroll needs to be managed well. At the same time, you don’t have the time or energy to micromanage this process, so you need to work smart. Here’s how you can wisely manage payroll on a global scale.

Outsource Payroll to a Trusted Partner

Although your domestic payroll system may be golden, paying international employees is a horse of a different color. It doesn’t matter whether you have one overseas employee or 100, or whether you’re hiring in one country or more. Labor law compliance is unique to countries everywhere.

The best first step you can take is to partner with a global payroll provider. Your provider partner must remain abreast of all compliance issues related to employment and payroll. And that’s vital because laws and procedures are constantly changing everywhere.

Outsourcing payroll doesn’t mean you relinquish control of what’s going on. Your partner should use technology that provides you with an all-access pass to payment, benefits, and onboarding information for the workers you hire.

The best way to manage a global payroll is to let someone else do the heavy lifting under your purview. That should take the micro out of micromanagement.

Consolidate Payroll

If you are hiring employees and contractors in multiple countries, you may find yourself working with multiple payroll providers. You might trust each of them to do what they’re supposed to do for you. However, having a bevy of providers can be a financial and logistical nightmare.

This multiplicity might have occurred through inheriting payroll partners from businesses your company has acquired. There is always a frenzy of getting newly acquired employees up to speed with your company. So keeping the existing payroll vendor during the transition period might have seemed the path of least resistance.

While that may be, it’s much easier to manage the relationship with one payroll provider than many. Talk to your preferred vendor to find out whether it offers services in the countries your employees are in. If so, the provider should be more than willing to make the move to consolidation smooth and financially feasible.

Keeping your domestic payroll solution separate from your international one isn’t a stretch. But uniting that role in your international operations will make managing global payroll far less complicated.

Get It Right From the Start

There is a significant amount of overlap between the payroll and human resources functions. Separate systems for each create redundancies and inefficiencies in both processes. Why not get it right initially, from global employee recruitment through retention?

There are some great reasons to integrate your payroll and HR systems. Making them far simpler to manage is one of them. Establishing a process that’s easier for your employees across the board is another.

If you lean into the concept of integration, rely on a global provider that can deliver it. There are employers of record (EORs) who can handle both in multiple countries seamlessly. Find one, and you’ll not only consolidate global payroll compliance, but all those unique HR compliance issues as well.

It’s always better to do things right from the beginning than it is to clean up mistakes later. Syncing your global payroll and HR work is the best way to come out of the blocks.

Understand Global Differences

You know how complex payroll issues are in your own country. Now imagine someone from another country trying to navigate them. Frustration and fear of the unknown make managing anything difficult, especially when just one wrong move can be costly.

Grasping the cultural differences of your international employees may help you get a firmer grip on payroll compliance differences. Working with an EOR should take the fear out of compliance missteps. But even managing your EOR relationship will go more smoothly if you take the time to suss out the rules.

Remember that your EOR is an established legal entity wherever they operate. Besides knowing the compliance requirements in every country they work in, the EOR should understand the culture. And a good EOR will be willing to help you understand those cultural differences as well.

Something as simple as knowing how employees do their banking or use their benefits will make comprehending payroll easier. The better you understand it, the better you’ll be able to manage it, even if someone else is doing most of the work.

It’s a Management Thing

The payroll process is important to everyone. That includes your company, your employees, and the country you’re employing them in. Productivity and profits depend on it. And if your payroll is global, so is toeing the compliance line wherever you are.

Make managing a global payroll as easy as paying your first domestic employee was by taking a few strategic steps. Work with an experienced partner, consolidate payroll provision, integrate payroll and HR, and understand your employees no matter where they are. By getting these things right upfront, your company may find itself on the way to world domination.

Also Read: How To Know It’s Time To Change Your Housing Situation

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