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Do you know any work challenge that is so time-consuming and energy-consuming, many wouldn’t dare to take it on, unless equipped with the latest technology and talent of the highest order? Payroll is such a challenge. And what makes payroll such a difficult mountain to climb? And can you reach its summit and prove yourself worthy of the global payroll challenge in your organization? Let us look at the top 11 global payroll challenges in this article.
What are the Global Challenges in Payroll?
1. Statutory Compliance
The payroll in a company will be spread across several countries across continents. Each country will have its own regulations for statutory compliance. Making the right deductions under the tax rules for each country can be very difficult as can be the maintenance of a different set of best practices in line with the rules and regulations for each country.
2. Data Security
Ensuring that the data of the employees is secure can be a very difficult job without a good payroll management system and a reliable team of employees. It is possible that data of individual employees can find their way into data banks and the hands of hackers and be spread on the Internet. It is also possible that the data of individual employees may be altered without their consent internally, which will lead to incorrect credit and classification of employees.
3. Payroll Accuracy
This is perhaps the biggest challenge of them all. How does one maintain payroll accuracy? Especially when it is not just about ensuring that the right salary credit happens but also that the leave balance is correct and that reimbursements and other benefits or variable components of the salary are credited at the right time and accurately. Without accuracy in payroll, the business can come short of compliance or maybe even be subject to legal allegations.
4. Maintaining Confidentiality
This is perhaps the toughest part of payroll. It is necessary to ensure that each payroll record is accessible to only that person who it identifies. The levels of access to the payroll system must also be clearly defined, and the system must always track the use of the self-service system and the use of the payroll records by anyone who has access at a higher privilege level. This way, we can always track any breach of data.
5. Lack of Visibility
Sometimes it is the exact opposite problem that confronts payroll as a global payroll challenge. There is a lack of access or a lack of visibility to the finer details for each employee. Sometimes the payroll management system itself does not maintain it. This leaves the payroll teams and other departments wondering what may have happened in case there is an issue, such as if books don’t tally across payroll and accounts teams.
6. Lack of Transparency
This is a common global payroll challenge when the payroll system is very obscure and very few people have access to it. There are not even employee self-service portals, and the salary and other benefits are directly credited. Employees cannot even obtain their pay slips without permission from HR. This lack of transparency will affect the organization very detrimentally and even lead to friction between the employees and the management.
7. Lowering payroll costs
Lowering payroll costs is a mandate for most companies. Because this is generally a cost-intensive function where a lot of people are involved unnecessarily, to lower payroll costs, companies may have to move from manual processes to automated processes. Such automated processes will help lower the number of personnel and hence the overall cost of payroll. Automation will also reduce the risk of human error in payroll.
8. Shifting from Legacy to Modern Systems
Legacy payroll management systems do not have the advanced features that most modern payroll management systems have, and they also may not be compliant with the statutory compliances issued by countries across the world. Mostly, you would still need to buy a license separately for each country you operate in to run a payroll management system that checks for differences across these countries.
9. Securing Great Payroll Talent
Great payroll managers and executives are not easy to find. This is because they must not only have the necessary financial acumen but also have people management and time management capabilities. In addition, they would also need to be familiar with top payroll management software. Lastly, they must have the capability to manage employee queries if they are approached directly.
10. Overworked Payroll Administrators
Payroll administrators do not have it easy in most companies. Though no job is easy, payroll management can be particularly cumbersome. In fact, that is why accounting does not handle payroll and neither does someone in HR do it. Payroll administrators need to manage payroll executives, take care of the payroll management system and sometimes even must respond to employee queries.
11. Managing the Payroll of Remote Teams
Remote teams are in other geographies. They may even speak a language other than English or a language you do not know as a payroll administrator or manager. How do you cross this language barrier? Can we ever overcome such a challenge in payroll? Also, the compliance constraints in the other country would also need to be addressed and of course the time zone etc. when it comes to crediting the salary and managing work hours and leave balances.
You Need a Payroll Management Partner
A payroll management partner will do a 360-degree management of your payroll needs, addressing it from the point of view of compliance, accuracy, and time and employee management. You wouldn’t need to worry over managing employees working remotely or losing employee data to a breach. In fact, none of the challenges we have mentioned herein will be of a bother to you. Alp Consulting has been a payroll managing partner for over a decade and we would be happy to manage your recruitment needs. Drop us a call and bid any challenges in payroll goodbye.
