How to choose a global payroll solution

Global payroll solutions are designed to solve the challenges that come with running a multi-country payroll. While they all have the same objective (i. e. simplifying global payroll), no two solutions are alike.

There are several different types of global payroll solutions available on the market, and the differences between solutions and providers can be vast. But how can businesses make sure they select the right global payroll solution for their needs? Here’s what to look for in an international payroll solution. 

Implementing a global payroll can be a very long and tedious process if managed internally without expert support. A global payroll solution should allow for fast and easy implementation, which is why organizations should inquire upfront what the provider’s implementation process looks like. 

What are the different implementation steps? How long will it take? They may even have some case studies with previous clients that illustrate the implementation process in an example.

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Great user experience

It doesn’t matter how many features a unified global payroll solution offers if it’s a nightmare to use. Payroll software solutions should be intuitive and easy to use. What’s more, they should be adjusted to the business’s individual needs. 

Businesses should work out which payroll data insights and functionalities they require and ask for detailed information about the software platform. Will the platform be accessible 24/7? Will it be deployed self-hosted or cloud-based to be accessible from everywhere in the world and leverage new technologies? 

Scalability

Global expansion is an ongoing project. Once it’s started, companies have to keep growing and expanding into new markets if they don’t want to fall behind their competitors. This is why a global payroll solution must be scalable. 

Adding new payroll countries and new in-country payroll providers should be an easy process, and the solution should offer coverage for enough countries to allow the organization to keep growing.

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Automation, Standardization, Consolidation

Payroll automation, standardization and payroll consolidation form what one might call the core of a global payroll solution. The idea is to standardize data formats, streamline processes, automate data flows, and ultimately consolidate all global payroll data in a single source of truth. 

Not only does this lead to better data visibility and transparency, but no longer having to extract and harmonize data also means less manual work. This is particularly helpful when preparing for audits or compiling reports. 

Advanced reporting

Global payroll reporting capabilities are yet another feature to look out for when choosing a global payroll solution. A global payroll platform should provide different reporting options, including country-specific reporting as well as reporting for certain regional hubs and for all geographies combined. 

It should be possible to view and analyze the same pay elements and cost factors for all payroll countries and easily draw comparisons between them. Transparent, reliable payroll data is the basis for making well-informed business decisions.

Compliance

Global payroll compliance is one of the top priorities for every organization that runs a multi-country payroll. There are many different compliance challenges companies face when growing globally, and payroll as well as tax and benefits management are a big part of the compliance burden. 

When choosing a global payroll solution, businesses should make sure that compliance is ensured by experts and that the chosen service provider has a proven track record. They should be able to offer expert advice on payroll regulations, taxation and benefits management in all the current and future markets on the business’s global expansion list.

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Integration capabilities

Organizations usually rely on many different tools to manage their global workforce. Having a whole range of different HR tools can quickly turn into a curse rather than a blessing if the systems don’t interact with one another. 

To make internal workflows as efficient as they can be, a global payroll solution should be set up to enable payroll software integrations—for example for integrating HR and payroll systems to allow for seamless data transfers. An international payroll software solution should ideally provide an open API for integration with many different workforce management tools.

Employer of Record option

Businesses that only want to hire specific talent in a foreign market don’t necessarily need to set up a local legal entity and payroll. There are different ways to hire abroad without an entity, one of them being an Employer of Record (EOR). 

An EOR hires employees on behalf of the client business and takes on all the legal and administrative responsibilities of the employment. Since an EOR can simplify global expansion in more than one way, businesses that might want to use this option in the future should look for a global payroll provider that also offers EOR services. 

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International payment options

A big part of global payroll processing that is often underestimated is the act of issuing the actual payment. Cross-border payments are slow and expensive, and since some countries don’t allow payroll providers to pay employees on their employer’s behalf (if the payroll provider even offers this service), organizations should choose a global payroll solution that also covers global payments.

Employee self-service functions

One of the latest global payroll trends is the increased importance of employee experience. In the war for global talent, business leaders have to make an effort to provide their employees with the best experience possible. Since timely payments are arguably a commonly expected standard, a global payroll solution should ideally include employee-self-service functions. 

Employees should have access to the payroll system to visualize their payslips, update personal information, and more. Self-service functions for employees are also beneficial for the business, since payroll and HR teams don’t have to deal with minor employee requests anymore.

Contractors included

Hardly any business only operates with full-time staff. Especially fast-growing start-ups and scale-ups often rely on freelancers and contractors when they first set foot into a new market. Independent contractors represent a significant cost factor in global payroll and should therefore be included in any global payroll reports and data insights. 

That’s why a global payroll solution should include both employees and contractors and provide consolidated data for the business’s entire global workforce. Ideally, it should also come with additional contractor management tools. Lano is an example for a global employment solution that offers integrated payroll, EOR, and contractor management services.

High data protection standards

Payroll data is highly sensitive and thus requires the highest protection standards available. When choosing a global payroll solution, organizations should carefully check the security of the payroll database to prevent data theft. 

Another aspect to check is compliance with data protection regulations. Data protection frameworks like GDPR have a big impact on payroll, and organizations must make sure to comply with all the legal requirements to avoid fines.