Global payroll: The challenge of looking local
Globalisation is a word synonymous with the rise of industry. However, recently we may have heard it thrown around a boardroom alongside the other generic buzzwords, and as such something about it becomes disjointed and bereft of purpose. In reality, globalisation is a powerful force – something that should be cultivated and respected in the corporate world.
And whilst we may associate globalisation with HR issues such as executive management and brand outreach, one aspect of it which is often overlooked is the affect it can have on payroll systems. When a company moves to another country, it can be a case of ‘lost in translation’ which is a dangerous game to play when it comes to culture. A brand which wants to appear local whilst maintaining a global outreach has a problem on their hands – namely, how can you integrate yourself into a culture which is thus far alien to you?
Dealing with the inevitable differences in payroll legislation from country to country can bring up potential red flags for HR leaders. The nitty-gritty under the cultural changes means getting to grips with in-depth legislative changes.
Managing the sheer volume of legislature
With the oncoming thrall of GDPR to worry about, HR leaders need to get their ducks in line, or risk facing payroll meltdown. "No one country is the same, and even in-country there are mostly regional variations to take into account," adds Simon Parsons, Director of Payments, Benefits & Compliance Strategies at SD Worx "Consequently, the complexity in managing the varying in-country requirements is significant, necessitating specialist knowledge. Whilst specialism is required, the need for process standardisation and economies of scale cannot be ignored either – efficiency and effectiveness in managing different payroll systems is also key to ensure there is a sufficient level of flexibility at the local level."
And the challenge of appearing indigenous to each of these branches of your brand is a skill nuanced over time and with much practice. There’s no 'one size fits all' approach to delegating payroll legislation, especially globally, though finding the right kind of help in order to make the process as painless as possible is a step in the right direction.
HR should always try and use all the tolls at their disposal. And in the modern workplace, there’s on key element of HR practice that should be being utilised to the max – real-time analytics. As Parsons points out, data can transcend language and actually be used to bring the payroll systems together. "Reporting, not just numbers, but real-time analytics, is a key driver in managing different payroll systems," he says. "Aggregating data from various payroll systems is critical, as is the means by which the aggregation is achieved. An effective technology strategy is vital to connecting payroll systems and being able to deliver global insights with regional variations."
Legislature only poses part of the payroll problem
As we touched on earlier, the issue of cultural assimilation is as important to a blossoming company as monetary success. Employers should know and appreciate the importance of company culture in today’s world; and a firm that is not culturally aligned, both internally and externally, is in for trouble. But with so many branches in so many countries to worry about, how can HR effectively find a system that allows for personalisation on this scale?
It’s true that any real success in cultural assimilation is not measured purely by how well your payroll system functions – although we shouldn’t overlook how important this aspect is in promoting employer brand. For now, maybe it’s enough to reminisce on how Parsons summarises the necessity behind local payroll guidance in a global conglomerate: "A true global corporate culture requires moving away from an HQ-centric mindset, leveraging organisational capability and competence from across organisational assets that incorporates diverse values and know how. Global corporate culture is multifaceted and borderless."
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