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Global Payroll Strategy: A New Normal in Payroll Outsourcing

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by Pradeep Martin , Analyst-Category Specialization, HR Services
6 September 2020

payroll management

“When the going gets tough, the tough get going.” This statement has more relevance today than ever before, as most companies/ industries have withstood or shown resilience against the global COVID-19 pandemic, standing stronger than before.

A similar phenomenon is occurring in the payroll outsourcing industry. As companies plan to move to a cloud-based system and adopt a global strategy, it is necessary to build such a strategy and adapt a better process to survive COVID-19 or similar situations in the future. Employees depend on salaries, and payroll is a continuous functional department for every company.

Global payroll teams that have not yet moved to cloud solutions are facing challenges, as most workers remain confined to their homes under lockdowns, with governments changing legislature related to labor—adding another layer of complication for payroll teams.

Adopting automation is crucial in such a situation. Companies can deploy chat boxes to handle common queries that arise regularly. Companies that have adopted cloud technologies are reaping benefits: their streamlined processes require less human intervention, thereby minimizing errors, and workers can allocate time for subjective thinking rather than repetitive work.

How Adopting a Global Strategy Can Benefit Companies

Adopting a global strategy in payroll is the foundation for an organization’s long-term success. Moving to a unified or global payroll enables companies to have a backup team in place that operates the same payroll process.

The process uses technology extensively, with well-defined rules, allowing an organization to complete the payroll task even if it faces a crisis like the present one. Companies that have moved from an on-premises system to a cloud-based system have already built resilience and eliminated redundancy. Virtualizing a global payroll will ensure payroll continuity, and it is the norm of the day in achieving a global payroll strategy.

Companies that are agile and flexible in terms of processes are performing well amidst this pandemic, but certain organizations do not have the ability to stabilize the process and thus consider it the biggest risk.

Role of Digitalization in Enhancing the Global Strategy

Global payroll strategy is the norm of the day. It helps in decision-making , compliance and reporting, in adopting standard best practices across business models regardless of the business’ operational country, in focusing on strategies in building digital transformation, and in managing resources.

Most businesses focus on digitalization and consider it the only basis for a well-defined payroll transformation; however, there are other pillars such as strategy and culture. Some key strategies are as follows:

  1. How can payroll transformation improve the overall position of the company?

  2. How is it going to drive value from investments?

Companies are considering both digitizing and adopting a global strategy for the payroll, owing to the lack of control over data that was once easily accessible because of remote working.

Importance of Cloud Technology in Remote Working

Technology—especially integrated cloud solutions in payroll—has played a major role in companies achieving agility and flexibility in processes. Estimates suggest that about 37 percent of all companies are developing global strategies to transform their payrolls.  

Companies have also noticed that mobile technology and electronic payments are most suitable in such situations, and 10 percent have already adopted these electronic payment modes. Such payment modes are the future for companies planning to work remotely, and a cloud-based payroll solution can help employees take employees take photos/scans of expense receipts on their phones and upload them to simplify the expense management process.

Cloud offers the latest technology to save data and ensure higher data privacy without maintaining or investing in physical hardware, while providing speed and power in this new era of working. A cloud-based solution can easily integrate new technologies such as machine learning (ML) and artificial intelligence (AI), which help in automating regular tasks and indirectly building resilience during crises. Companies that have moved from on-premises to the cloud are already reaping benefits.


Key considerations by companies while transforming payroll or moving to cloud solutions are given in the figure below.

payroll management

When planning to adapt a global strategy and move to cloud solutions, companies should analyze the overall benefits gained by the organization and the outcome of payroll transformation.

Companies should analyze the key value drivers when considering payroll changes; however, most organizations initiate the payroll process thinking only of what it can offer instead of how the company can utilize it to achieve best results.

Technology and architecture are crucial. In particular, cloud-based technology offers the latest advancements in data safety and privacy, without the need to maintain or invest in physical hardware while enabling speed and power in this new era of working. Real-time data analytics, ML, and AI help in building resilience, and companies that have moved from on-premises to the cloud are already reaping benefits.

If a company is simultaneously considering a global approach or a country-by-country approach, the implementation and road mapping stage can help clients decide whether to adopt a migration strategy or payroll transformation strategy.






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