The 2023 “Getting the World Paid” industry survey conducted by PayrollOrg (PAYO) provided an inside look at the global payroll industry. The survey enabled PAYO to gauge industry trends in the rapidly evolving global payroll landscape.
In the months leading up to Global Payroll Week (GPW), 1-5 May, nearly 300 global payroll professionals from around the globe shared their professional insights on several key areas of global payroll.
Global Payroll Challenges
One question on the annual survey asked individuals “What are your biggest global payroll challenges?” According to respondents, 68% stated compliance is their biggest challenge. The second largest challenge is managing multiple vendors, with 37% of respondents identifying it as one of their top three challenges. The third challenge, according to 33% of respondents, was designing the best operating model.
Other results showed big changes, including 27% of respondents who indicated managing costs as a challenge, which is an increase of 8% over last year, and 22% of respondents listed not having the correct payroll talent as a challenge—an increase of 6% from last year.
“Beyond the compliance and cost management challenges, which we would expect to top the list, what is interesting this year is the increase in two other specific areas—not having the correct payroll talent and an inability to design the best payroll operating model,” said Graham Wylie, VP International Marketing at ADP.
Each country contains its own unique and challenging set of labor laws and tax regulations. When asked which countries payroll professionals found to be the most challenging to pay employees, the United States, Canada, and the United Kingdom formed the top three.
Global Payroll Performance
Payroll standardization and performance continue to be ongoing obstacles for many organizations processing international payrolls. When asked, “How do you track your global payroll performance against objectives?” 46% of survey respondents said they do not track global payroll performance, which is down 5% from last year.
“Visibility and tracking of critical data and its processing is essential to maintaining effective compliance. Unfortunately, achieving that visibility is not always straightforward—46% stated they aren’t even tracking global payroll performance, which begs the question, ‘why’?” said John Pearce, SVP Payroll Operations at CloudPay. “Payroll departments are constantly striving to deliver the best possible service for employees, so why are we not seeing higher numbers tracking performance? Is it an awareness or guidance issue from senior management, or perhaps a lack of access to the right data?”
Service Providers
Payroll service providers can assist organizations in staying compliant when developing and managing multiple payrolls across the world. When asked, “What is the primary resource or method you use to answer questions relating to global payroll processing?” the survey revealed that 22% said they use global payroll providers. Eighteen percent of individuals indicated they use resources offered by the Global Payroll Management Institute (GPMI), now PAYO, while 17% of individuals use accounting firms, which is an increase of 7% over last year. Another result that showed big change included 11% of respondents who use local partners to answer questions related to global payroll—a decrease of 10% from last year.
More than one payroll service provider is often needed to get the job done accurately and on time. When the survey asked respondents, “How many payroll service providers are you using today?” 45% of respondents use two to five providers, while 12% depend on six or more to process their payrolls internationally.
Global Payroll Technology
Trends in global payroll technology, including artificial intelligence (AI), robotic process automation (RPA), and data analytics, can lead to increased productivity, less manual work for payroll professionals, and more. The survey asked respondents “Which of the following technologies are you and/or your payroll outsourcing partner using in your global payroll processes?” In response, 28% indicated data analytics, with 17% of respondents saying they use enhanced reporting, and 17% said they use global cloud connectors. Also notable, there was a 4% increase in the usage of both earned wage access (EWA) and RPA.
In addition to the areas highlighted above, the survey analyzed several other areas of the global payroll profession and industry, payroll standardization, and accuracy. Visit PAYO's website to view the complete 2023 “Getting the World Paid” survey results.