Global Payroll is not a Myth. It’s a Journey.

Global HR FootprintThere’s been a lot of chatter lately about whether or not it’s truly possible to have a globally consistent, fully-compliant global payroll system. Some would argue that its sheer complexity makes it almost impossible to administer an automated and effective  multinational payroll solution.

Yes, it’s true that it is highly complex but it’s not a myth. It’s a journey. It’s a journey that begins with a strategic road map and makes stops across every country in scope.

So what are some of the key steps in the journey?

The first step begins with an analysis of the organization’s global footprint. This includes a country-by-country review of where the company has, or doesn’t have, established business entities as well as identifying the number of payroll entities in each of those countries. And then, a  legal evaluation of existing contractors working in those countries. This analysis will drive the strategic road map.

The next step in the journey is a visit to a cloud, which is the hot technology platform that can be integrated into existing HCMs, accounting and Vendor Management software systems, unifying all the data. The next involves compliance and partnering with a managed service provider who has a global supply chain of vetted HR and payroll companies who are experts on in-country compliance.

Another step is related to global contractors/contingent workers, and having the ability to legally engage new workers in countries where the organization does not have business entities. This can be achieved with a solution called Global Employment Outsourcing, where  a service provider becomes the employer of record on behalf of the hiring organization. It’s completely compliant from an HR perspective which mitigates risk for the organization while giving them new tools to support their global growth.

The total solution has to take a holistic approach, beyond the global HR and payroll department, including finance, technology and risk management and equally important, engagement with regional and local HR teams.

Global payroll is complicated but with the proper planning across a company’s global organization, challenges can be overcome and fragmented processes can be transformed into a standardized system of record.

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