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Payroll is no longer just about compensating employees, even though that remains its primary purpose. Today’s payroll is so much more, because the evolving nature of the global workforce, and younger generations who prefer more digitized services, mean that payroll has to be fast, flexible, and personalized. Additionally, payroll can deliver strategic value to a business, through data, insights, and informed decision-making.
Delivering on these new demands and opportunities, however, can be easier said than done. This is especially the case for organizations operating across multiple territories, who have to comply with several different sets of laws and payroll requirements simultaneously. At the same time, global payroll teams need to keep payroll data secure, and drive efficiencies: according to Everest Group’s recent report on the demands of modern payroll, nearly half (47%) of the research respondents acknowledge a heavy admin burden on payroll teams.
The four biggest challenges in today’s payroll landscape
While every industry and organization is different, Everest Group’s report has identified four common areas where international payroll challenges keep arising, all of which must be addressed with modern pay solutions in order to maximize payroll’s potential and value:
Lack of process standardization
When payroll processes are consistent, organizations can run payroll much more efficiently, and find the tasks of analyzing data, gaining insights, and compiling reports far quicker and more effective. A lack of standardization means errors and delays can easily creep into payroll processes, whether through differences in data formats, or extra time needed to rationalize that data.
However, every country has its own characteristics and requirements from payroll and employment perspectives, which means achieving both compliance and consistency for multi-country payroll can be extremely challenging. This can be made even more complex if organizations use multiple payroll software providers in different countries and regions, all of which will have their own processes and ways of doing things.
Lack of global visibility
Everest Group found that as many as 45% of payroll teams lack visibility into payroll operations. This visibility is essential for making informed decisions about successful payroll disbursements, agility with pay cycles, and the deployment of innovative new tools like Earned Wage Access. It also hinders the ability for payroll teams to add operational and strategic value to the wider business; payroll data can uncover trends and patterns within the workforce which — when analyzed and properly understood — can drive improvements across the enterprise.
Poor employee and manager experiences
Over 90% of respondents to the Everest Group survey agreed that payroll has a significant role to play in shaping the overall employee experience. However, despite this recognition, it remains an area in which many organizations fall short.
When systems aren’t integrated, global teams get a fragmented, confusing, and ultimately frustrating experience. Now more than ever, employees want to be able to find all their payroll and HR services and functions in one easily accessible platform (or ecosystem of solutions), with all relevant data up-to-date and synchronized. Furthermore, they increasingly want to be able to interact with payroll and HR entirely autonomously, and therefore get the speed and flexibility that they’re looking for. Only unified pay solutions are able to deliver on all these fronts.
Heavy admin burden on payroll teams
All of the above takes a lot of time and human resources to achieve, on top of everything else that payroll teams have to do. If using legacy, fragmented payroll solutions, many payroll practitioners will have to make manual interventions to address errors and inefficiencies, which can lead to delays (and some errors still falling through the cracks).
This means that payroll teams are under a lot of pressure on a day-to-day basis, making it difficult to find the time or energy to innovate and contribute to payroll’s strategic value. The best way to resolve this issue is through payroll systems and technology: this could be better integration of platforms, automation that can take care of repetitive tasks, or wider adoption of pay on-demand that allows employees to access their pay as it accrues without any intervention from the payroll team.
In summary
The common theme that runs through these four challenges is the role that technology and integration can play in resolving them. The right solution can enable modern pay experiences that employees love, make sense for the wider business, and alleviate the pressures on the payroll team.
Explore Everest Group’s insights in further detail in this report, then explore the full range of CloudPay’s global pay services that can support you in tackling these modern payroll challenges.