Out-of-date practices and lack of visibility and knowledge of local processes are the biggest potential threats to effective multi-country payroll management, according to report.
- A quarter of businesses (23.7%) rely on potentially out of date, ‘historic practices’ when choosing a payroll operating model
- One in five (20.12%) still manage payroll approvals manually, for example by email
- A staggering 79% of businesses do not have the system capability to consolidate or view a single global report for all their payroll operations.
Released today - 29 November 2016 – the report An insight into multi-country payroll processing seeks to offer a better understanding of the current challenges faced by payroll practitioners in an evolving industry and the methods they employ to achieve greater efficiencies, better organizational reporting and business insights.
Commissioned by TMF Group - a global provider of business services operating in over 80 countries - and compiled by the Global Payroll Association, the survey canvassed the views of 165 payroll practitioners, from Senior Vice Presidents and Directors to operational staff, across a broad spectrum of industries.
Key report findings include:
▪ The risk of inertia: While over a third of respondents (36.5%) claim ‘efficiency’ is a key driver in selecting a payroll model, it was concerning that nearly a quarter (23.7%) also admitted that ‘historical practices’ determined their choice – potentially limiting the range and scope of their delivery capability – and 1 in 5 (20.12%) still manage payroll approvals manually.
▪ The value of local knowledge and experience: ‘Knowledge of country legislation and requirements’ was overwhelming rated as one of the biggest challenges when acquiring or divesting payrolls (49%) or when operating payroll across multiple countries (35%). As a result, 70.25% agree that having an in-country contact, able to communicate in local language is very important.
▪ Achieving compliance and consistency across borders: Other top challenges of multi-country payroll included ‘the ability to find information on legislation and compliance’ (35.7%) and ‘achieving consistency in policies and processes’ (33.6%). One in four (25.2%) also cited difficulties in managing multiple vendors.
▪ Moving from a local to a global view:Furthermore, around two-thirds of businesses (65%) report that do not yet have the ability to view the payroll processing status across each of their operational markets and, as such, a staggering 79% of businesses do not have the system capability to consolidate a single global payroll report for all their operations
This is borne out by the findings that 1 in 5 companies (20.99/20.73%) do not have any global or multi-jurisdiction payroll processes or policies, instead managing each market on an individual local basis.
Deborah Williams, TMF Group’s Head of Global Business Services, commented: “Global payroll is still a relatively young industry but it is evolving fast. Organizations are increasing going through transformations on a global scale but still trying to manage this themselves at local level.”
She continued: “In truth, what worked for an organization before – manual processing, local-level reporting – just won’t be fit-for-purpose as they seek to consolidate activities and globalize.
“Online technology platforms offer one solution to providing global reporting and analytics, but this must still be complemented with a real understanding and knowledge of local and regional compliance requirements. Having the right people to manage your payroll is still very much key.”
Mikolaj Plucinski, Managing Director at TMF Poland added: “The majority of international companies operating in Poland have either local specialists in-house or will outsource their payroll function to a locally-based provider. Polish labour law changes very rapidly, for example next year the national minimum wage will amount to 2,000.00 PLN for full time employees, and for civil contracts, 13.00PLN per hour. The government is also working on regulations that will allow employers to maintain employee files electronically instead of on paper.
“As reflected in this report, an up-to-date approach and on-ground support is essential, but increasingly, so is an organizations’ ability to observe its Polish payroll at a global level; and tie local processes in with overarching policies and procedures.”
To download the full report, visit http://www.tmf-group-global.com
For further information, please contact:
Kate Martin, Director of External Communications, TMF Group – kate.martin@tmf-group.com
NOTES TO EDITORS:
An insight into multi-country payroll processing
Published in November 2016 by the Global Payroll Association, this 2016 global payroll survey and subsequent report canvassed the views of 165 payroll practitioners, from Senior Vice Presidents and Directors to operational staff, across a broad spectrum of industries, as well as payroll outsource and software providers. Commissioned by TMF Group, the survey sought to gain a better understanding of the current challenges faced by payroll practitioners in an evolving industry and the methods they employ to achieve greater efficiencies, better organizational reporting and business insights.
About TMF Group
TMF Group is the global expert in local business. With a network of offices across over 80 countries, TMF Group has the in-country expertise and knowledge to help businesses (of all sizes) expand and operate both within and beyond their home markets.
- TMF Group serves clients of all sizes and from all sectors; everyone from a small start-up to a large multi-national, working with 60% of the Forbes 100 and the FTSE 100.
- TMF Group’s global business services have been recognised in three separate assessment reports from The Everest Group in reflection of its broad capabilities and innovative technology solutions. And most recently, identified as a Leader in the Multi-Country Payroll Focus market segment, in NelsonHall’s NEAT Evaluation for payroll services; all underpinned by a global governance model that provides clients with increased transparency and greater control of their own operations.
- A Leader in multi-country payroll services - NelsonHall’s Evaluation & Assessment Tool (NEAT) 2016.
- A Major Contender in global payroll outsourcing and the strongest provider in Latin America Multi-Country Payroll Peak Matrix Assessment 2015
- A Major Contender in global finance and accounting outsourcing Finance and Accounting Outsourcing PEAK Matrix Assessment 2016
- Widest Geographic Coverage and Strong Language Capabilities Multi-Country Payroll Platform Assessment 2016.