In the midst of a global talent crunch, it’s not unusual to have to look beyond your own borders to find the kind of people that will drive your business forward.
The good thing is that the rise of remote working has made assembling a top team of global talent more accessible than ever. But, while hiring talent from overseas is a breeze (in comparison to 10 years ago, at least), paying international employees can be a tricky affair.
It’s easy to make costly payroll mistakes when you’re managing an ever-growing workforce—especially when you’re pinging payments all over the globe.
When it comes to global payroll, there are many things to consider. Here, we will explore the challenges of global payroll and tell you what you need to know to ensure international success (a.k.a. worldwide business domination).
Global payroll: the main challenges
Did you know? The global payroll services market is expected to exceed $74.29 billion by the end of 2023. A testament to the necessity of making smooth overseas payments.
Paying international employees is starting to become common practice for businesses across sectors. But, as we mentioned: nobody said it was easy. Here are the main challenges you should know when it comes to global payroll.
Employee confidentiality
One of the biggest challenges of paying international employees is data protection. In an age where cybercrime is rife, safeguarding your employees’ data is paramount. Without adequate security measures, you could find yourself in fiscal as well as reputational hot water.
To protect your international employees’ payroll data, working with a system that is compliant with the likes of GDPR and CCPA as well as any regional data regulatory framework relevant to your company is a must. Your international payroll system must also have the ability to perform a host of stringent data security checks. No ifs, no buts, no compromises.
Global vs. local? That is the question
In the ever-evolving world of global payroll, there’s a hot debate along the lines of global vs local payment solutions.
While some organizational stakeholders or decision-makers push for a network of local or regional payment systems, others see the value of consolidating every branch of payroll into one central platform or application.
As digital technology continues to push the payroll envelope, working with a central platform or solution is wise. But, to ensure success, consistency, and the ability to scale without droves of logistical teething problems, striking a balance between regional payment flexibility and global payment efficiency is vital. Work with a solution that suits your specific payroll needs, and you’ll gain a panoramic view of every process across regions.
Read: An employers’ guide to simplify expat payroll processing for insider advice on this lesser-known branch of personnel payment processing.
Growth & administrative costs
Setting up foreign payment entities in several regions can prove labor-intensive—not to mention costly. Plus, you’ll also need to consider a jaw-dropping number of additional costs and overheads including HRMS licenses when paying international employees from around the globe.
Consolidating global payroll processes
Historically, businesses across sectors have adopted a fragmented (and eye-poppingly manual) approach to paying international employees. Not only does setting up regional payroll entities individually drain organizational talent resources (that could be utilized for more strategic pursuits), but it will sap your budget.
To improve efficiency while driving down unnecessary administrative costs, working with a unified global payroll system is vital.
A quick ‘paying international employees’ case study
Fintech innovator Aspire, for instance, wanted to expand its business after a colossal round of funding—$158 million to be precise. Due to the rising costs of hiring skilled tech professionals coupled with a significant shortage of domestic talent, Aspire decided to extend its search to India.
To ensure a smooth onboarding experience as well as a consistent, compliant payroll process, turned to Multiplier for a solution. Using our global payroll technology, the fintech company successfully onboarded 80 skilled professionals from India while gaining the capability to hire talent from a choice of additional territories.
Speaking on the subject, Aspire’s Head of People said:
“Overall, there is a significant cost saving compared to setting up an entity. The process, the product, and the overall service have helped us achieve milestones at record speed.”
Global payroll: Your quickfire checklist
Considering the innate challenges of global payroll, it’s clear that investing in a tech-driven solution will help you consolidate every process related to paying international employees.
With so many international payroll platforms and apps out there promising the planet on a stick, choosing a solution that ticks all of the boxes is essential to your ongoing organizational success.
To help you on your quest to international payroll success, here’s a quickfire checklist of the key qualities you should look for:
- The ability to integrate with a range of employee payment options, including bank transfer, PayPal, Venmo, and Wise, among others
- The ability to integrate with a mix of existing tools and platforms plugged into your business ecosystem
- The ability to scale seamlessly as my business grows and expands to new regions
- Robust security, data encryption, and compliance features
- Seamless currency conversions in a wide range of nations and regions worldwide
- Accessible payroll analytics and expense management tools
- A solid level of user support and guidance
Final thoughts
Did you know? 75% of businesses that have rolled out a global payroll solution note a reduction in payroll errors, and 68% have seen improved compliance with local regulations.
In the age of the remote workforce, hiring talent from across the globe is no longer a far-flung luxury for scaling businesses. But, to benefit from a melting pot of remote global talent, having a viable and scalable means of paying your international employees is vital.
Rather than setting up regional entities separately, working with a solution that will tie your entire payroll process together will save you untold amounts of time and money while serving up the insights you need to make continual strategic improvements in an ever-evolving digital landscape.
Work through our essential checklist one item at a time and you’ll connect with a solution that suits your specific payroll needs while eliminating the key challenges that come with paying international employees.
We wish you the best of luck on your expansion journey and for more invaluable advice, read our guide on how global payroll data makes the life of an employer easier.
