Managing the nuances of international business is challenging. There are a number of HR responsibilities you and your team need to consider, including:
• Employee recruitment and hiring
• Culture management
• And, last but not least, payroll
Payroll is a complicated process for international companies. Luckily, there are payroll management solutions that can dramatically increase your organization’s success and relieve the day-to-day struggles associated with domestic and/or global requirements. In this post, we’ll discuss how a consolidated payroll solution can help your team manage the most common pain points that arise when paying employees overseas.
It’s difficult to find one payroll provider that manages your domestic payroll and all of your international payroll(s). Most US payroll companies don’t even engage in other countries, with the exception of some that do Canada and perhaps Mexico. Typically, companies end up sourcing a local provider for each country in their footprint. What ends up happening though, is that communication with each additional payroll provider exponentially increases complexity and errors start to happen.
The key is a consolidated payroll management solution with experience with all the countries you are doing business in to ensure a streamlined and error-free payroll process.
Complexity in your payroll management solutions can also create inconsistency in delivery. This puts a core tenant of employee happiness at risk: timely and accurate pay. Outside of compliance with multiple countries’ regulations, the most common challenges to achieving payroll consistency when working across borders include:
• Executing timely and accurate money transfers
• Managing multiple currencies
• Navigating time zone and calendar differences
• Dealing with multiple payroll providers across several countries
• Inconsistent reporting
A consolidated global payroll service reduces the number of providers your internal team has to deal with down to a single source, significantly reducing the chance for communication issues and inconsistencies. When team members are paid accurately and on-time, they will be more likely to stay on board and be satisfied with their position.
Integrating international payroll management solutions to your organization’s HRIS platform can be a challenge. That’s typically due to a lack of effective data mapping. Many companies decide to go without the automated exchange of payroll information, which effectively leaves them in the dark when trying to analyze their global HR activity and spend. For example, do you know for sure how many employees you have in your entire global organization? Without HRIS – payroll integration, you probably don’t.
Here again, a consolidated global payroll management solution provider can help tremendously. Global providers have likely already addressed your integration challenges with other customers, and some have pre-built and certified integrations with the major HRIS and Human Capital Management (HCM) systems.
Always ensure that your payroll partner has the necessary experience working in your international markets. Ask how long they have done business in your target countries and how many clients they have in each. Without relevant in-country experience, your organization can be subject to compliance risks due to the many nuances that exist within each country’s regulatory regime.
As mentioned above, US payroll providers are great solutions for managing your company’s US payroll, but they typically don’t function well across borders. Not only are there different accounting standards overseas, but the withholdings, benefits, and mandated payroll processes are very different. Providers of US payroll are typically ill-equipped to help you navigate the complexities of moving money overseas and into different currencies. If you don’t have a strong revenue base in each of your countries from which to derive your payroll funds, then you’ll have to send them from elsewhere. This process typically taps your primary headquarters and requires a foreign exchange (FX) transaction.
Most global payroll management solution providers offer some level of FX assistance. The top of the line providers offer in-house treasury and FX teams integrated within their service offerings. Treasury management is the final element that enables companies to do everything with one provider, under one contract.
If you’re curious about how international payroll management solutions can help your organization, contact our team of international payroll experts. We have knowledge on all aspects of global payroll from our 12+ years of experience and deep expertise in 150+ countries. Contact us today to learn how we can help you!