In Greek mythology, King Sisyphus of Corinth angered Hades, god of the underworld. In retaliation, Hades bestowed a severe punishment; He forced Sisyphus to roll an immense boulder up a hill—only for it to roll back down every time it neared the top. He was cursed to repeat this action for eternity. But what does the fate of Sisyphus and the work global payroll professionals do have in common?
Well, payroll professionals have hefty responsibilities. And as soon as they complete one payroll cycle, a new one starts again. Because of payroll’s cyclical nature, they often overlook the next step in the process: workforce payments. It’s the last mile, and it’s often the most challenging.
Managing Workforce Payments
While it’s true payroll professionals no longer need to go to the bank to physically withdraw cash, count it, and distribute it in envelopes with pay stubs, the process is still cumbersome. Payroll professionals are burdened by individual banks or payment providers’ specific requirements. Global organizations looking to deliver payments to their employees, tax authorities, and benefits vendors must rely on an assortment of partial solutions.
Without a universal standard for workforce payments, the market lacks standardized payment rails and often suffers from several issues, depending on individual processes, summarized below:
- No land-date commitment: Most current solutions were designed to focus on the “send” date, not the “land” date, making it hard to ensure delivery of on-time global payments every payday
- Lack of transparency: Organizations that rely on payroll companies without an in-house built solution to manage workforce payments sometimes lose visibility into the payments processes, leading to hidden fees and high foreign exchange (FX) rates
- Fragmented operations: Different entities and formats lead to transparency issues. When data is siloed, the transference between platforms creates a risk for data breaches that affects employers and employees.
- Liability: Payment companies and banks that process workforce payments can unintentionally damage employers by not providing full liability. According to a recent QuickBooks survey, one in six employees said they would quit their job if they received a single inaccurate paycheck. Considering the challenges and costs of hiring and managing a global workforce, this is certainly something to consider.
- Lack of control: Disjointed payroll and payment solutions lack control and visibility. Since the process isn’t streamlined, there’s no end-to-end coverage. Organizations can miss the “big-picture” and analytics of the workforce payroll and payments, thus losing a strong strategic asset. This lack of visibility and control prevents companies from optimizing their biggest liabilities.
These core issues include real bureaucratic headaches. For example, when opening a bank account in most locations, a company is usually required to do the following:
- Meet with a business advisor before starting the process.
- Prepare a business plan, regardless of the intention to borrow money.
- Submit the application and wait for approval.
In addition, several supportive documents are required. These may vary according to the type, size, and nature of the business, but can potentially include a copy of the articles of association, the most recent annual return, a certificate of incorporation (when applicable), and financial forecasts.
How Tech Streamlines Payments
Multinational companies that pay their employees locally must establish accounts in various banks in different locations. Of course, opening the accounts is step one in an arduous journey that also includes managing the accounts, delivering the data in the required formats, and keeping it accurate and safe. These are cumbersome manual tasks that become more complicated as the business grows and the operations expand.
Combined, these issues turn payroll and payments into an endless Sisyphean process for every stakeholder involved. They also show that global payments can put a significant strain on business growth and organizations’ scale-up, which can’t reasonably be solved by simply hiring more people to do the job.
That’s where innovation can work its magic. The payroll cycle will not change. Payments will always need to be delivered, just like Sisyphus’ eternal burden of pushing the boulder to the top of the mountain. But imagine if he could use a forklift, a crane, or a truck? How much easier would this process be?
Thankfully, workforce payments don’t require heavy machinery. Smart technology solutions do the heavy lifting, closing the gap between payroll and payments and streamlining these business-critical processes from human capital management (HCM) to enterprise resource planning (ERP) systems.
In a sense, this is a belated technological revolution whose impact on global workforce management can potentially be as great as the Industrial Revolution was in the 19th century. Companies seeking to expand and grow globally should consider harnessing innovation for workforce payments or risk falling behind their competitors.
Finding the Right Provider
When seeking a workforce payments provider, you must consider the pain points discussed above and look for solutions that would alleviate them. Therefore, it’s crucial to have a clear understanding of the organization’s unique problems and a defined “wish list” for the solution. Often, getting one solution creates a different problem down the line, which then requires another tool to fix it, and more fragmentation than before.
When seeking a workforce payments solution, here are the main things to consider:
- Full compliance: Just like any solution, full compliance comes first. There are many consequences associated with noncompliance, including financial penalties and legal action. In extreme cases, businesses may be shut down, so updated knowledge of local payroll regulations that enables full compliance is certainly a priority.
- Fraud prevention: Any payroll payments solution should rely on strict know your customer (KYC) and anti-money laundering (AML) analysis, as well as continuous monitoring to ensure that payments are legitimate and fraud is prevented
- Data security: Be sure to inspect the data security and check for recognized international standards for data protection. Also, insist on role-based access to prevent unauthorized users from accessing sensitive payments data.
- Global reach: Be sure that the solution you choose is available in the locations and currencies you require. Doing so will remove the stress of juggling currencies and optimize payments worldwide.
By embracing the right technology, you can alleviate payroll and payments pain points and gain control, accuracy, and efficiency. As leaders of your organizations, you can then invest the freed-up resources for development, growth, and scale, turning Sisyphus’s boulder into gold.