When it comes to global workforce payments, there are numerous challenges and complexities to consider when paying a diverse global workforce accurately and on time.
Jonathan Nash, Director Payments Expert with Papaya Global, and Jonathan Ricetti, Head of Pre-Sale Payments at Papaya Global, discussed the difficulties associated with global workforce payments in the webinar, “Global Workforce Payments Jigsaw: Mastering a World of Complexities,” sponsored by Papaya Global.
The difficulties associated with global payments aren’t just centered on paying employee salaries but making all the payroll-related payments on a country-by-country basis for social security, taxes, pensions, and other payments associated with the global workforce.
Current Global Payroll Challenges
Attendees were asked about the complexities they face paying a global workforce and, on a scale from 1 to 10, 32% of attendees said the difficulties ranged between a 7 and 9.
“It’s crazy that we are well into 2024, and yet many organizations still rely on manual [processes] for payroll and payments, whether that be Excel-driven, manually keying in data, manually keying in payment information into bank incomes, manually keying into files, or anything like that,” Nash said. “This approach is hugely time consuming.”
According to Nash, these errors, and the potential fraud risks associated with human intervention, are causing negative downstream impacts on global organizations.
One of the biggest challenges is also the most common method for making global payments. The payment process, known as a bank payment file or bank files, formats and translates data from an organization’s payroll system into one that the employee’s bank will recognize and allow for payment processing.
The problem with this process—other than being extremely outdated—is that the payment information doesn’t go directly to the employee’s bank, but through multiple teams of individuals, which makes fraud or other errors more likely to occur.
Another common hurdle in global payments is the use of siloed systems. These disconnected systems where payroll data is stored in various applications and handled by different teams can slow down the payments process and negatively impact business by providing a lack of standardization.
Global Banking
One of the most interesting bits of information from the webinar was the revelation that some global corporations have an average of 850 bank accounts. Nash joked that he uses only one or two accounts on a personal level and finds that challenging enough.
Having numerous accounts can also create challenges with data handling and management.
Some of these challenges might include the following:
- Erroneous data handling
- Payroll-to-payment discrepancies
- Data security risks
“All these bank accounts require [businesses] to open a general legal entity. Having this many bank accounts and dealing with every single country also [comes with] some legal costs and overheads that some people don’t always consider,” said Ricetti. “When it comes to the data management and handling of these accounts, one thing we see quite often is people entering world data inputs. I can tell you from working in the banking [industry]…payments repair, processes, etc., are one of the costliest operations in banking.”
Ricetti said making sure that corporations provide the correct data inputs can ensure faster payments globally.
I’d Like to Solve the Puzzle…
Ricetti and Nash looked at some of the real-life examples of Brazil, India, and the maritime industry to demonstrate some of the challenges of and complexities of global payments.
“It’s incredibly complex from country-to-country,” said Nash.
So, what’s the solution to this jigsaw puzzle?
Some solutions to these global payment challenges include the following:
- Implementing a cross-border payments platform built on a tier-one bank infrastructure
- Ensuring payroll and payments are all under the same umbrella
- Ensuring seamless integration with your HR/finance tech stack
- Ensuring you have a reliable global network of local, certified experts
“We are all moving into a world where we have instant payments or same day payments,” said Nash. “What employees want is to be paid on payday.”
Register today for the free on-demand webinar, “Global Workforce Payments Jigsaw: Mastering a World of Complexities,” accessible until 28 February 2025.