Cloud software has already transformed the way many businesses operate – and payroll is no exception. In a world of porous borders, technological advancement, and increasing corporate ambition, multinationals are empowered to manage employees, salaries, and taxes more efficiently and more effectively…
Indeed, it wouldn’t be a massive stretch to call 2018 the year of payroll.
Many businesses are already experiencing the advantages of more globalised systems, and the months ahead will see even more changes. Plenty will be beneficial; some will doubtless cause growing pains; and all must be adjusted to in good time.
But what’s specifically going to change, and if you’re a payroll manager or business owner, what do you need to do? The following five international payroll trends may well redefine the function in 2018. Embrace them, prepare for them, and integrate them into your business strategy and your team and the wider organisation will benefit.
1) Tighter data regulation
Let’s start with the hard part.
The EU’s General Data Protection Regulation (GDPR) is perhaps the most comprehensive and wide-ranging piece of information security legislation for decades. It will affect all manner of industries, in all manner of ways. To put it simply, if you process, store, or destroy data relating to EU citizens, you’re subject to it – and potentially subject to its penalties, which at the upper end can amount to millions of dollars.
So what does this mean for the payroll function?
Well, if you keep information relating to EU employees– and if you’re running a multinational business you most probably do – then you need to think about how you’re handling it. Essentially, you need to think about whether or not you’re complying with local information security legislation and the EU GDPR. What’s more, the regulatory burden is shared with your technology partners, so if you’re using a payroll software provider, they’ll need to be fully compliant too.
Records must be kept for longer, data must be more thoroughly encrypted, and payroll professionals must stay scrupulously current when it comes to further legislative changes – in their host country, and now in the EU as well.
2) Payroll administrators will come into their own
In 2018, payroll administrators will become truly empowered. Technology will relieve them of time-consuming tasks – such as data entry – allowing them to focus on deeper trend analysis and strategic improvements.
Essentially, if you’re a payroll administrator, you’re going to have more time available to do the work that really matters to a multinational business. And what’s more, you’re going to need it.
Because international payroll systems are complicated, multifaceted things, they aren’t discrete parts of the business, but a vital contributor to the greater corporate ecosystem. That means deeper integration with other teams, a renewed emphasis on digitalisation, and an emphasis on developing core competencies outside the administrator’s traditional remit is essential for 2018. Greater responsibility and deeper influence await payroll managers – if they want it. The earlier you prepare, the better.
3) Remote global payroll
In days of yore, global companies had to go to the tremendous effort of installing in-country payroll teams in every nation they operated in. For these payroll teams – and HR – this caused endless problems: they had to hire local employees, source local suppliers, and work to understand local legislation.
Fortunately, it isn’t that way anymore – or at least, it doesn’t have to be. Technological developments mean that international businesses can manage payroll systems for all locations from a single centralised home base. If local functions do need to be undertaken, they can be outsourced to expert payroll professionals who understand the relevant regulatory issues, and can oversee compliance on your behalf.
By outsourcing payroll in this way, you can reduce the costs of managing an international business – and empower your core payroll team to focus on value-adding processes and tasks.
4) Plug-and-play technology
Cloud technology is becoming more all-inclusive. In 2018, businesses won’t purchase an individual application or tool: they’ll buy an entire ecosystem of software services encompassing operations, sales, payroll, finance, and HR. Using accountancy software like Xero in combination with an integration partner on HR and payroll means there’s no data duplication, vanishingly few errors, and maximum efficiency within a truly holistic technology system.
In effect, you’ll be able to plug, play – and get right to work.
5) Self-service payroll
International businesses have been slow adopters when it comes to self-service systems, and 2018 may well be the year where this changes. Mobile-friendly, accessible, and intuitive payroll technology such as ESS and MSS platforms can save your company time and appeals to your employees – who appreciate the autonomy and ease of use that it can provide.
With cloud technology, senior business leaders and managers can get their hands on payroll data wherever they are, whenever they want. Payslip information, virtual dashboards, leave and claim statuses, comprehensive employee directories, and intuitive grids to filter complex items will be just a few of the most useful features available. All data will be available real-time 24/7 – allowing for easy international collaboration across a multitude of locations and languages.
In 2018, payroll will transcend local limitations. Using technology, the function will streamline – wasting less resources, contributing more to the business, and integrating fully with the overarching goals of the enterprise. All payroll teams have to do is get on board with the change.