The COVID-19 pandemic has impacted every industry and company around the world. Multinational companies found unique challenges in each country when they implemented different lockdown measures, company-wide work-from-home arrangements, and evolving leave and furlough policies. Adapting to this new “normal” for global companies has been made more challenging due to in-country obstacles we don’t always encounter in the United States.
Business continuity has taken on a whole new level of understanding for companies during the pandemic. Contingency plans sound great when you’re planning for a short-term emergency or a construction project in the office building, but as the pandemic has continued month after month, companies have had to adapt to changes and regulations in real time. Global companies that rely on partners around the world have seen the impacts of the pandemic from a totally different perspective as well.
Global payroll is one aspect of operations that may be behind the scenes most of the time but uses partners from different areas to make sure employees are paid on time and in compliance with local regulations. In many countries that were hit hard by early COVID-19 outbreaks, such as Italy and Spain, ensuring staff was available to maintain payroll without disruption was a concern. Providers from India had internet service connectivity issues. Employees were working from home in different regions with varying speed and reliability issues, making it difficult to maintain communications and ensure deadlines were being met.
Below are two country provider experiences in processing global payroll during COVID-19.
Japanese Provider’s Experience
One payroll provider in Japan had only a handful of employees who were able to work from home prior to the pandemic. The payroll provider quickly purchased new equipment to allow employees to set up operations in their individual homes. Advance scheduling became more important, as did coordinating meetings, reviews, and manager approvals. The rollout was not always smooth due primarily to slow internet connections but has been successful over the course of the year. Although monthly payroll data is delivered electronically, registrations for statutory benefits are handled mostly in paper form.
Paperwork was also sometimes stalled and, in some instances, urgent payments had to be handled at a bank counter. This resulted in employees having to go to their local bank in person and wait in lines due to restrictions at branch offices.
The provider’s business continuity plan was originally designed for cases when a server was damaged, so most of the activities were for backup servers at data centers or using a temporary offsite facility if the office was damaged. They had not yet envisioned a time when employees would need to work from home and have immediate remote access.
Spanish Provider’s Experience
In Spain, withholding taxes and social security payments were done in person at a bank. With the change to remote working, one Spanish payroll provider had to utilize an online banking platform. Ten months later, it continues using this platform and has decided not to go back to in-person payments at the bank.
The biggest impact for this provider in Spain was offering security for payroll while simultaneously studying the government directives that were being published. The media was often reporting on information that was not approved by the government, so the provider had to break the bad news to clients about what was happening. They faced the challenge of managing business operations, learning new regulations, studying government directives, and implementing in real time.
Government websites were also sometimes crashing or not up to date with the latest changes. As a business, the provider in Spain had not considered having employees work from home. But it had invested in a cloud-based system vs. in-house IT servers, with higher security and backups in place. It also invested in an online switchboard so that clients could call office lines and calls could be answered from any location.
Its business continuity plan allowed it to get up and running within 12 hours of the office shutting down. Each staff member took their PC, screens, all IT equipment, printers, and office chairs and went home to set up. The company IT department went to each employee’s home to ensure high-speed internet was connected. Once connected from home, the team had access to the cloud-based payroll system and business was uninterrupted.
Changing With the Times
In some countries, certain payroll processes require physical copies of documents to be filed with government agencies, which is extremely difficult to manage while employees are working remotely. Government agencies will hopefully make changes in the future to update regulations and create online portals, so providers can send digital documents and payroll-related filings electronically.
Tools like Zoom and Microsoft Teams have been used by providers worldwide to maintain internal collaboration and information exchange with clients, yet most international providers do not expect to continue working remotely after the pandemic ends. Most providers are confident they have the knowledge and systems to process payroll remotely without interruption or disruption, but they also believe having the team working together in the office is better for morale and productivity.
With data security in mind, providers are ensuring their employees use business computers or laptops to perform daily payroll work from the office or at home. The same data privacy precautions such as two-factor authentication, passwords, or antivirus software continue to apply in remote working situations. The Zoom platform is fully compliant with the EU’s General Data Protection Regulation (GDPR) and continues to enhance security and privacy mechanisms to remain compliant.
Processing global payroll is more complicated than U.S. payroll due to regulations in each country, differing time zones, language barriers, and service capability levels. During the pandemic, these obstacles have been magnified and weaknesses have been stretched to the limit. Identifying issues in the payroll process in any country can help strengthen the process for payroll in all the countries being managed. If you determine an in-country provider is not meeting service level expectations, you can look for a new partner to help simplify payroll in that specific country.
Current business continuity plans have changed due to the pandemic. But the pandemic has also given us a new opportunity to look at the global structure of our business. The idea that something unforeseen can change the whole world in an instant will reshape our way of planning for the future. It is no longer just the threat of a natural disaster or a war in one country but looking at the entire world and the way we all live and work together in a global community.
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Jade Boneff-Walsh is the Vice President of International Partnerships for Blue Marble, where she is responsible for nurturing and growing the company’s relationships with partners worldwide. She brings to the role more than a decade of expertise in cross-cultural negotiations and relationship management across varied industries. Boneff-Walsh is certified in Cross Cultural Negotiation by the United Nations and in Alliance Management by the Association of Strategic Alliance Professionals (ASAP). She has lived in Australia, Canada, Brazil, and the United States, where she currently resides near Washington, D.C.