How your global payroll strategy can drive future growth
Working across borders creates an array of opportunities to expand your business. To grow sustainably, learn how this multi-national organization is handling payroll for their borderless workforce and the benefits that come with a global strategy.
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Working across borders creates an array of opportunities for growth. But it can also lead to a number of organizational challenges.
Payroll is a great example of an administrative function that changes from relatively straightforward to far more complicated as a company expands into new locations. Unfortunately, when an organization isn’t set up to handle that complexity, it can run afoul of local regulatory requirements, expose itself to a variety of operational risks, and ultimately jeopardize business continuity.
And yet, many lack such a strategy. According to EY’s 2021 Global Payroll Survey, 37% of organizations don’t have a plan of action to address hybrid or flexible work for employees in different jurisdictions.
The reality is that any organization focused on growth needs a global payroll strategy that makes it easy to expand into new countries and grow sustainably. In this article, we’ll dive into the benefits of going global with your payroll experience.
Why a fragmented approach to global payroll doesn’t work
Multinational companies often handle payroll differently in every country where they do business, using disparate systems and technologies in each jurisdiction. The problem with that approach is that it’s inefficient and leads to varied experiences from one country to the next. It also makes it difficult to obtain a holistic view of the workforce since the relevant data is siloed rather than consolidated into one single source of truth.
As a result, organizations might struggle to know basic things like how many people they’re employing, how much they’re paying those employees, and whether they’re doing so in a way that’s compliant with local regulatory requirements. Having siloed data can also make it virtually impossible to accurately forecast labor spend.
The benefits of a single, global payroll solution
Aquent is a global marketing and creative staffing organization with thousands of employees spread across eight different countries. In order to solve payroll challenges and build a strategy for future growth, it leveraged a single, continuous solution for global payroll. This, in turn, presented the organization with various benefits:
A unified source of payroll data
Having payroll and time and attendance data in a single system allows companies to maintain real-time payroll data. That way, they don’t have to spend time reconciling errors from batch processing. Plus, having a single source of payroll data helps ensure employees are paid accurately and on time no matter where they’re working. That’s exactly what Aquent experienced.
“It was important for the firm to grow and to have the HR framework, that single source of truth for talent and for staff information, across the globe,” notes Larry Bartlett, VP of Finance at Aquent. “Our clients are global; Aquent has to be global in how it services those clients. Our staff and our talent are part of that equation. To support that, we needed a global enterprise-level HR system.”
A global payroll platform can provide companies with consolidated reporting that reveals insights at the local, regional, and global levels. With a platform that serves as a single source of truth, reporting can become easier and more seamless. It also allows leaders to track and compare key metrics that help inform decisions on payroll operations, workforce composition, and more.
In Aquent’s case, while the company’s legacy global payroll solution worked, it wasn’t comprehensive enough to provide the reporting it needed to feel confident in data accuracy or drive strategic business decisions. Aquent found itself plugging the gaps with other systems. This led to a complex web of solutions that was costly and time-consuming to manage and that resulted in errors and knowledge gaps.
“The single pane of glass gives us visibility from a single source into multiple systems and multiple payroll processes in various countries around the world. Aquent never had that before,” says Larry Bolick, Aquent’s CIO. “Previously, we had individual point solutions in different locations that had to roll up into a single view. Now, Dayforce does a lot of that for us. That's important because management at headquarters in Boston now has visibility into Melbourne, Toronto, and soon into Britain for the purposes of payroll, HR, and other areas as well.”
Improved efficiency and cost control
A global payroll strategy generally helps companies move away from expensive customizations, consolidate interfaces and vendors, and leverage economies of scale, thereby lowering overall costs.
Aquent ultimately decided on a single solution to optimize all of its global payroll processes. Since doing so, the company estimates that its incidence of errors has gone down by 50%, if not more. And when errors do occur, the team can quickly correct them in the system.
The payroll team is saving five hours on data entry and processing just on Monday payroll, which adds up to more than 30 days of work over the course of the year. They have also saved time on the accounting side, where Dayforce makes it easier to post payroll to the financials.
Aquent’s Dayforce investment also led to cost savings. “From an ROI perspective, we were projecting about $280,000 of savings in terms of displacing other systems with Dayforce functionality. So far, we're about two-thirds of the way towards meeting that goal,” says Bolick.
Lower risk exposure
Global workforces face global challenges. Regulatory requirements can vary from country to country. For organizations with multiple operating jurisdictions, a controlled system of compliance is critical for paying all your people accurately.
“Our biggest difficulty is keeping track of our employees and making sure that they're getting paid properly, making sure that we're collecting all the appropriate documentation, and keeping up with all of the new rules and regulations,” says Jen Horton, Aquent’s VP of Human Resources.
A single, global payroll solution can help payroll teams stay on top of changing legislation in multiple regions and avoid costly fines and penalties. It can also help lessen companies’ reliance on hard-to-understand customized processes at the country level.
With Dayforce, companies can maintain compliance while gathering real-time insights across a widespread workforce.
It can be difficult to predict the future. When organizations leverage technology that can scale alongside their workforce, growth can become a foundational part of your plans.