Global Expansion: A Scary but Inevitable Truth for HR Professionals

ScaryWorldofHROutsourcingGlobal expansion is scary, very scary. It’s a potentially risky investment for an organization overall and particularly for Human Resource professionals, who are responsible for the organization’s most strategic and expensive resource — its people!

Decisions have to be made that could have unexpected consequences and what’s make it so scary, is trying to make those decisions without having reliable information, data and facts available to help make those decisions.

You May Not even Know “What You Don’t Know!” 

Now that’s a scary thought. “What Don’t I know?” Well, even the most savvy, shrewd Human Resource (HR) professionals who have spent their careers learning about HR laws and regulations in their home regions–and have become true HR knowledge experts in the UK, the European Union, all of the U.S. states and have even mastered the intricacies of the U.S. Affordable Care Act–will still not be prepared to navigate HR compliance issues on a global scale. Why is that?

Along with global tax planning, global HR is one of the most complex areas an organization can dive into. Every country has a completely different set of guidelines, have different filing requirements for both the organization itself and for its full-time and contingent labor. Some of these requirements are very strict with harsh, and often expensive penalties for non-compliance. Many countries have unreliable banking processes–often with minimum balance and reporting mandates– which make funding global payrolls and tax authorities frustrating and labor intensive. And that assumes that the HR professional even understands the country-specific payroll calculations, tax and social cost contributions, and has a resource in place to execute the payments.

Beyond the Basics

Beyond the basic HR functions such as recruitment, talent management, benefits, payroll and termination knowledge, global expansion also exposes the organization to a host of potential risks. If an Independent Contractor is generating revenue, it could trigger additional in-country taxes. If an Independent Contractor is being terminated, it must be executed according to country-specific laws and then if you throw a disgruntled worker or two into the mix–who enjoy various levels of protection by different governments, then it could be a very scary proposition for the HR professional.

On top of all that, all of this HR administration and these compliance-related tasks will have to be managed across different time zones, thereby working around the clock in some cases, calculating budgets in various currencies (which have rates that constantly fluctuate) and navigate all the cultural differences and employee expectations in any particular country. And if HR thinks they can just “go to a country’s government website to find accurate information about filings, statutory benefits and payroll deductions,” then they better learn the local language, because it probably won’t be available in their first language and if it is translated, its translation may be unreliable and scrutinized by local authorities.

Global Expansion Does Not Have to be Scary

Global expansion is inevitable. For most industries–at least those who want to prosper and remain competitive–expanding into international markets is not a question of whether or not to do, but a question of “when” to do it. For any HR professional who is ready to begin their global journey, or has already experienced some of these scary issues while exploring new countries, there is help out there. All of these fears can be alleviated by outsourcing their Global HR to a professional. You can learn more here about SafeGuard World International, a leading provider of global managed payroll, global employment outsourcing and international HR services.

Global expansion does not have to be scary. Learn more.

Advertisements

The Holy Grail of “Big Data” for Finance & Payroll Professionals

global_payrollHistorically, options for administering global payroll included ERPs, legacy vendors and cobbled together solutions with disparate and incompatible systems. Those legacy payroll systems were expensive, decentralized, didn’t address local compliance, had poor reporting and analytics and they required multiple vendor contracts and high infrastructure investments.

Seven years ago, to solve these challenges, SafeGuard World International (SGWI) was established and created a solution using state-of the-art technology. The technology was built in the “cloud,” and SGWI joined other “cloud” leaders such as Salesforce.com, Workday and Cornerstone on Demand who were all building new technologies that would stand superior to their industry leaders who were still using older technology platforms. This new cloud-based technology was a game changer in the global payroll industry. Even Gartner recognized SGWI as a “disrupter” in the marketplace due to its growing market share winning Fortune 500 client business. It was this technology combined with SGWI’s “managed” approach to the process (vetting local payroll processors in 165 countries and taking responsibility for employee and tax payments in each country) and SGWI’s strong customer centric and passionate culture, that has contributed to its huge success.

A few of our major milestones include being the first global payroll company to sign a strategic partnership with Workday, the leader in enterprise-class, Software-as-a-Service (SaaS) solutions for managing global businesses. Today, SGWI has more shared clients and processes more payrolls for shared Workday clients than any other global payroll provider. Workday presented SGWI with their Global Payroll Cloud Partner of the Year at their 2014 Customer Conference, Workday Rising. SGWI was also the first global payroll provider to earn the newer SAS certification, SSAE 16.

When clients were asking for help with their global contingent labor, SGWI used its global HR experience to establish a Global Employment Outsourcing division. And later, started offering Human Capital Management (HCM), payroll and HR consulting solutions for growing businesses. The goal was to help both small organizations and large ones with small employee populations in any particular country offering everything from entity establishment to recruitment, in-country compliance consulting and of course, an HCM and payroll solution.

Due to an increasingly global workforce (projected to grow 18% between 2010 and 2030), only about $250Mil of the $5Bil potential market has been captured and SGWI has been investing in the technology, infrastructure and staffing required to take a significant share of that market.

SafeGuard World International serves the global employment needs for companies of all sizes, with large or small employee populations in mature and emerging international markets. A combined model of expertise in both global payroll and global employment outsourcing/contingent labor solutions is what differentiates SGWI from its competition. Clients have a mix of large and small employee populations in different countries, or are ready to test out new international markets and SGWI’s solutions manage all of their workers and provide comprehensive analytics of their total workforce costs, the holy grail of “big data” for finance and payroll professionals.

Should You Wait to Adopt Global Managed Payroll?

multinationalpayrollJust a decade ago, it was almost unheard of for multinational companies to manage payroll from a single system. Instead, it was common for them to use multiple disparate systems to process payroll in multiple countries, making payroll data extremely difficult for decision-makers to retrieve and use.

Over the past ten years, global payroll has evolved into a streamlined system in which one or a small number of providers seamlessly manage payroll and its associated data in an easily accessible platform.

While many companies have waited on the sidelines to see if the new Global Managed Payroll model would work, some organizations tested the uncharted waters, and they earned a distinct advantage. Early adopters have greater visibility and a better understanding of how their companies work than their counterparts do.

Global Payroll Gives Companies an Edge

The biggest budget line item for most companies is payroll, so they need visibility into how payroll dollars are being spent to run their businesses effectively. Without a Global Managed Payroll system, they miss out on the strategic insights associated with this critical information.

To keep up with the progress of early adopters, companies that have been observing the evolution of global managed payroll from the sidelines must implement a global payroll solution as well. It will allow them to:

  • Compare costs in one country versus another
  • Track and maintain regulatory compliance in multiple countries with different laws and regulations
  • Make sure workers in every country are paid correctly and on time

The sooner an organization adopts global managed payroll, the sooner it can obtain more valuable information that heightens its competitiveness.

Global Managed Payroll: The Time Is Now

Thanks to these early adopters, Global Managed Payroll is becoming a mainstream business practice that continues to expand as more companies see proof of its effectiveness. There are significant barriers to entering the global payroll provider market, so the available providers are large and boast demonstrated success. As a result, organizations are gaining confidence in the availability of quality global payroll service, and they are more in tune with the goals they hope to achieve by adopting it.

Organizations are getting on board with global payroll as they reinvest in HR applications. Their shift away from ERP systems to more mature, functionally rich SaaS products has been a catalyst for change in payroll. Like any initiative that aims to drive down costs or boost competitiveness, the sooner the new Global Managed Payroll model is implemented in a company, the sooner its benefits can be realized.

In the coming years, even more companies are likely to shift from using numerous different payroll vendors in many different countries to managing all payroll data and processes through one or two international providers. Some organizations may opt to hold off on implementing a global payroll solution, but they will not be as competitive in payroll or HR support as other
companies in their markets.

Which group will your organization be part of?

Global Payroll Pioneers are Now Enjoying Big Data

globalpayrollpioneersIn recent years, forward-looking organizations have been demanding a truly global solution as their leadership became increasingly dissatisfied with having different payroll providers in each country, or a cobbled-together hybrid approach.

That model had to change. To remain competitive, these organizations sought a single solution to manage payroll across multiple countries—with all of their unique taxes, labor laws and other requirements.

Technological advancements have made this solution possible. The advent of Software-as-a-Service (SaaS) technology eliminates the need for single-instance, on-premise payroll software or ERP modules. A single cloud-based payroll solution can encompass payroll for all employees in every country, and can be customized to handle a wide range of national and regional requirements. It can also be implemented across a distributed organization with minimal hassle and time.

It’s a New Era for Global Payroll

Global companies no longer need to maintain large instances of ERP modules. Today, they can purchase a mature SaaS product that’s far more functionally rich than anything available just five years ago. They can offload the burden of multiple currencies, languages, tax structures and time zones. Best of all, they gain the ability to report on payroll information globally, and seamlessly integrate that data with existing human resources information systems (HRIS).

Early Adopters Are Already Seeing the Benefits of Global Payroll

Global payroll‘s early adopters have tended to be organizations in technology fields. They are accustomed to having data available and having access to reports on a global basis. They expect integration, and they’re comfortable with outsourcing. For these early adopters and many who followed in their footsteps, a unified global payroll solution in a shared services environment makes perfect sense.

Early adopters are realizing a number of competitive advantages from global managed payroll, including:

  • Simplified management with one point of contact, one set of service level agreements (SLAs) and one set of payroll key performance indicators (KPIs)
  • Easy access to vital payroll data, such as compliance and status
  • Visibility into total workforce costs (compensation plus benefits plus other employment-related costs)
  • The ability to compare costs country-to-country and region-to-region
  • Deeper understanding of the entire organization
  • Cost predictability and lower payroll ownership costs

With a SaaS global payroll solution, there’s one monthly cost. Contrast that against the complexity of spending on payroll bureaus, sustaining internal payroll teams, covering IT costs for on-premise software as well as IT resources to manage upgrades and maintain integrations.

Why Act Now?

If payroll is working well across your organization and you have no need to report on payroll information, waiting for greater market maturity may be a viable option. But most organizations do have to report on payroll, perhaps because it’s their biggest budget line item or perhaps to help them meet their compliance requirements. The sooner you adopt global managed payroll, the sooner you can turn payroll information into business value.

If your business strategy over the next five years involves moving core functions to the cloud and/or centralizing HR services, you should at least consider a global payroll option. SafeGuard World International was one of the first global payroll pioneers and today, enjoys being a market leader in this space.

 

The Evolution of an SMEs Global HR Strategy

global hr evolutionFor many Small and Medium-Sized Enterprises (SMEs), their first step into international waters is not very strategic. They are more likely seeking out a quick solution to an urgent problem such as recruiting an international worker, setting up an international entity and legally engaging global workers. In those early days, it’s less about strategy and more about survival.

As time goes on, the SME finds itself standing up straight and enjoying some kind of HR and payroll solution for its global workforce. They have stabilized. But what does their global footprint look like now?

Well, it’s probably a set of patched together solutions. For example:

  • 75 workers in Canada or the UK who are rolled into the SMEs domestic payroll program, with the added benefit of an HRIS system to manage them
  • 35 workers in another country being payrolled by one of the Big 4, with no HRIS
  • 26 workers in another country being payrolled by a local payroll company (who speak a different language and are in a time zone 8 hours ahead of the company’s central HR department), with no HRIS
  • One or two independent contractors in one or more countries, with no HRIS

That doesn’t exactly sound stable. Here’s what the HR Director at the SMEs day might look like:

  • Approve payrolls in 5 different formats from 5 different people
  • Respond to PTO requests from international workers via individual emails, due to a lack of an HRIS system
  • Obtain “proof of compliance” for each country by reaching out to five different people, three of which do not speak English as their first language
  • In an effort to respond to the CFOs request for a global workforce costs, spend the whole day (and four more days) consolidating a variety of payroll information into one standard report that can used for any kind of sensible analysis
  • Respond to an unexpected compliance penalty from an independent contractor that wasn’t working compliantly after all, to the SMEs great surprise

There is a better way. As SMEs continue their global journey, they will need to take a more strategic approach to global HR. They will need streamlined payroll processing systems, consistent HR policies and overall global visibility into their global workforce. At this stage in their evolution, many SMEs look to outsource these functions to a global HRO partner such as SafeGuard World International, who provides HR solutions for every step in their global journeys. From a Global Employment Outsourcing solution which is a legal alternative to the independent contractor model and an HRIS & compliant payroll solution for 1-50 employee populations to high-technology solutions for larger populations, where the SME enjoys all the benefits of cloud-based payroll systems.

Companies such as SafeGuard World International also provides a range of HR professional services to help both multinationals and SMEs during every step of their global journeys including entity establishment, recruitment (RPO), country-specific employment contracts, HR helplines and more.

Navigating Global Growth: Why it’s not Smooth Sailing for HR

islandgrowthSo the company executives are making high-level strategic decisions about how, where and when to expand globally. On Monday, the thinking is, let’s get into the emerging markets, let’s get in early! So HR starts looking for Recruiters in Africa and partners up with Finance to look into setting up a Business Entity in Peru.

Oh, wait, forget that idea. Now management has decided instead to invest in the mature markets and have asked HR to hire a finance team, a dozen sales managers and two administrative assistants, within 6 weeks.

It’s not Smooth Sailing for HR

This is simply the reality of growing internationally, especially as the mid market and small businesses are taking their high-growth companies abroad. Deciding which markets to manufacture in, where to sell products and services, to name a few examples, are key strategic decisions that every organization has to make, and they have very real consequences. But that doesn’t make the HR professional’s job any easier.

It’s never been easy for an HR department to manage transition during a company’s high growth stage. New head counts are approved, then un-approved, then re-approved and it’s a dynamic environment. Not to mention that many high-growth companies don’t even have full scale HR departments; the HR team likely consists of one or two individuals who are wearing all of the HR hats such as recruiting, performance appraisals, and of course, payroll and benefits.

Imagine now having to manage these tasks outside of the company’s home country. In the home country, the HR professional will at least have a Business Entity, a general understanding  of how to recruit and a method for processing payrolls. Now try to do that in a foreign country. Definitely not smooth sailing. Sounds like one of those recent pleasure cruises where all the guests got sick!

Turn on the Cruise Control

There is a Cruise Control switch to smooth out a choppy boat ride. While all these emerging companies  have been expanding internationally, global service providers have been right there with them, providing global HR services to support their global journeys.

SafeGuard World International is one of the leaders in this space and can provide all the help that HR needs as their corporate executives navigate their  global growth strategies: global managed payroll, global employment outsourcing, HRIS & payroll for Small to Medium Enterprises (SMEs), as well as Independent Contractor Employment Agreements, Global RPO and country-specific recruitment, in-country entity establishment and a range of other HR support on a multinational scale.

HR can relax and enjoy the journey!

 

 

Sales Manager in Poland? Brazil’s national healthcare? Recruiter in Singapore?

Do these questions sound familiar to you?

ImageImageImage

They sound familiar to me because these are the questions we get from our clients everyday. SMEs are going global, fast, and they need help. This is just a sampling of questions we get from our clients relating to international HR.

How does one navigate global HR?

Well, in the past, many organizations would solicit help from a global HR Consultant or a tax attorney but these options are not always affordable for a growing small business. Since they are growing one country at a time and often have tremendous cost pressures, they need to take a more measured, methodical approach to global HR.

The problem though is that engaging and managing a global workforce is not the kind of project that can be learned with research on Google. For one thing, you can’t always trust what international payroll companies are posting on the Internet, they haven’t been vetted and may be posting inaccurate or out-of-date information. You can’t rely on this kind of information when it comes to global HR because if it’s not managed properly, you could end up having to pay fees for non-compliance, or end up with a disgruntled worker who did not receive all the benefits they are entitled to under their country’s laws.

SafeGuard World International provides global payroll and a variety of multinational HR solutions to clients of all sizes:

  • multinationals who require integrated technology solutions
  • mid-market companies that have a small yet growing number of employees in one or more countries
  • micro-multinationals who are embarking on their global journeys

We have solutions for as few as one global worker and up to thousands in one, five, fifty or more countries around the world, whether our clients have business entities and local HR specialists or not. We will provide as much or as little support our clients need to help them manage their entire global workforce–compliantly,  wherever they might be in their global journeys.

Our services included global managed payroll, global employment outsourcing, HRIS & payroll for Small to Medium Enterprises (SMEs), as well as Independent Contractor Employment Agreements, Global RPO and country-specific recruitment, as well as in-country entity establishment.

In other words, we can help you find and legally engage a Sales Manager in Poland, tell you what the national healthcare system is like in Brazil AND help you with recruitment in Singapore.

You don’t have to go at it alone, call on SGWI for all of your global HR needs.