Is standardization the solution to payroll complexity?

It’s no secret that global payroll processes have been outdated and complex for quite some time. In fact, the United States ranks within the top 11 countries with the most complex payroll systems, alongside the UK, France, Italy, Belgium, and more. Old-fashioned, manual processes of payroll data often lend to duplication across multiple internal and external systems. A lack of standardized processes inevitably means that every country a business delivers payroll in has a different structure and format for payroll data calculations, so there is no single way of working. This, along with siloed teams, create barriers within the payroll department that only increase both complexity and poor visibility.

Payroll systems that are not standardized don’t support the growth and scalability of a business. A company may be ready to expand and rapidly hire, but complexities across different countries creates hurdles that can be both costly and time consuming. Compliance concerns can also impact data security and protected information – if a payroll department cannot see what is happening in each country, they cannot be compliant. A lack of standardized processes across countries also forces them to endure time-consuming manual processes, where proper technology can help remove tedious (but important!) tasks from their workload.

Standardizing the payroll data and process across countries could end the complexities mentioned above. When there is a standardized payroll process in place, each payroll professional is able to operate within the same payroll data and process, and work in a standardized way. If a payroll professional functioning in one country unexpectedly needs to take over a colleague’s duties in another country, the same policies and procedures from the original country will still be followed. This allows the payroll professionals to take over responsibilities without skipping a beat. A single way of working makes payroll faster, more efficient, and more manageable than ever before.

Hybrid and remote work have altered the way global payroll functions. Businesses in different countries require employers to work with local payroll providers to ensure new hires are being paid correctly and on time. However, this can increase compliance complexity, data security, and cyber security concerns if a business does not have a standardized payroll process in place. A single payroll process across a business also allows for more flexibility while adding new local payroll providers and onboarding them easily on the standardized platform. Without standardization, payroll experts must become familiar with a new system, new country data, different formats, currency, and a new language. The flexibility that standardized processes offer is advantageous to both seasoned and inexperienced payroll professionals, since it makes the transition smoother and reduces the ‌time needed to get up to speed.

Read more: 4 payroll trends that could help transform employee compensation

Standardized data also allows for comprehensive and detailed reporting when comparing country costs often requested by business leaders. This allows employers to read the story behind global payroll data and helps with decisions for further investment or changes across the globe. Auditors can see what’s happening in each country thanks to the digital and transparent audit trails that are organized in the same format. These reports are quick to pull and are available on a global and local country level thanks to the use of standardized data across countries.

Standardized payroll processes generate a way of managing and delivering multi-country payroll that applies to all countries, territories and geographic areas, eliminating the complexities and providing a more efficient way to deliver and manage multi-country payroll. If your company is not currently using standardized data and processes, think about implementing technology in order to manage all payroll data in one place.

Fidelma McGuirk, CEO and founder of Payslip.