A company has one chance to make a first impression when it comes to onboarding employees. The process can set the stage for the entire employee/employer experience. From the interview to the new-hire paperwork, a streamlined and consistent process can ensure that the employees’ pay and benefits, as well as many other employee-related items, are correctly established the first time around. Global payroll is no exception, but onboarding globally can be somewhat more of a challenge.
Onboarding successfully can ensure that payroll runs smoothly. Payroll set-ups on newly hired employees can make or break a global organization’s success—especially on a global playing field. There are several ways that a company can ensure a smooth payroll transition and make the first paycheck a successful event.
Overcoming Common Obstacles
When a company is processing multiple country payrolls and dealing with multiple country HR processes, it can run into issues common to those who manage a global payroll. Cultural differences, language barriers, and local providers can create a complex set of processes. Where possible, it is a best practice to engage as few vendors as possible. The use of a consolidated payroll service will allow a company to execute payroll in numerous countries across the globe. Usually, these providers will be able to handle additional items from reporting to compliance filings.
The risk in correctly processing a global payroll is typically the same despite company size. Whether you have one or 1,000 employees in a country, it is necessary to ensure that your chosen provider is equipped to handle any number of employees and that the ROI for those countries is not impacted due to size. To avoid this issue, organizations can rely on a payroll consolidator that specializes in keeping all global payrolls under one roof, and under one strict compliance process.
Consolidating international payroll through one provider helps improve a company’s ability to understand global salary costs, handle fluctuations in currency, and make important strategic decisions for future operations. Aside from payroll logistics, it’s critically important that organizations have a documented compliance regimen for each country of operations.
Payroll compliance varies across the globe—with multiple differences from country to country affecting everything from taxes to labor contracts and statutory payment schedules. Therefore, it is critical that your chosen corporate payroll services are aware of, and well-versed in, the compliance requirements in the countries where you have employees. Companies need to select a partner that has proven expertise to truly handle compliance correctly.
Remember that you, the employer, are ultimately responsible for compliance. Newer providers, typically, are more prone to make mistakes along the way. Look for providers that have a proven history of serving clients in your target countries and are willing to educate you and your HR team on all the requirements. Finally, ask prospective providers what guarantees they offer to ensure your compliance success.
Organizations need to be proactive and organized in managing the pay date for each payroll cycle, as well as the milestone dates for each activity leading up to payday. These include scheduling a cut-off date for changes, a register approval date, and a funding date. The funding date is the day by which funds must be sent and received in country, accounting for time needed for wires and foreign currency conversion if necessary. Otherwise, organizations may fail to recognize statutorily required payment schedules and/or country-specific holidays that will disrupt the normal cycle. If operating in multiple regions, synchronizing calendars may contribute to increase overall efficiency.
When a company decides to use a global provider, it should trust that the provider has the global expertise to ensure your compliance. This provider should easily partner with you to ensure that you understand all the needs your company must fulfill to ensure a successful payroll.
Many facets of global payroll should be considered when onboarding. A successful onboarding experience is the beginning to a successful end result.
Dee Byrd, CPP, PHR, SHRM-CP is an M&A Payroll Project Manager for Paytech Inc. Byrd has more than 25 years of global payroll management experience and currently sits on the American Payroll Association’s (APA) Electronic Payments Committee. She also participates in the APA’s Global Issues subcommittee and the Government Relations Task Force Paycards subcommittee.