Four out of five global payroll professionals responding to the 2021 “Getting the World Paid” industry survey said the COVID-19 pandemic had little to no impact on their operations.
Conducted by the Global Payroll Management Institute (GPMI), the survey provides an inside look at the global payroll industry. The survey enables GPMI to gauge industry trends in the rapidly evolving global payroll landscape.
In the months leading up to Global Payroll Week (GPW), 26-30 April, nearly 600 global payroll professionals from around the world shared their professional insights on several key areas of global payroll.
Global Payroll Challenges
The annual survey asked individuals, “How has COVID-19 impacted your global payroll operations?” In response, 81% stated that COVID-19 had a minimal or no impact on their operations. Conversely, 19% responded that COVID-19 had a large impact on their global payroll operations.
When asked, “What are your biggest global payroll challenges?” 62% of respondents stated compliance is their biggest challenge. The second biggest challenge was designing the best operating model, with 31% of respondents identifying it as one of their top three challenges. Coming in third was managing multiple vendors at 29%.
Having more than one system of record for payroll can also be a challenge for organizations around the globe. The survey asked respondents, “Do you have one single global system of record for payroll and HR data?” Fifty-two percent responded no.
“With more than 50% of the respondents’ organizations lacking a single global system of record for payroll and HR data, one can discern that multinationals should focus on a global payroll strategy that envisions to achieve a single source of truth—a system that captures and consolidates all payroll and HR data to foster unified payroll across multiple countries of operation,” said Samuel Isaac, Senior Vice President of Strategy at Neeyamo.
Global Payroll Technology
Advances in technology continue to change the global payroll landscape. When asked, “Which of the following technologies have you and/or your payroll outsourcing partner started using in your global payroll processes?” 75% indicated data or reporting, with 40% of respondents saying they use data analytics, and 35% said they use enhanced reporting. Respondents could select multiple answers.
“It’s encouraging to see that 75% of respondents are finally starting to focus on enhancing their global payroll reporting and data analytics capabilities, especially in light of the ‘blind spot’ it has created in the wake of the pandemic,” said Virginia Magliulo, President of GlobalView Payroll at ADP.
In addition to data analytics and enhanced reporting, 20% of respondents use global cloud connectors, and 11% of respondents use robotic process automation (RPA).
Global Payroll Performance
Payroll standardization and performance remain a work in progress for many processing payrolls internationally. The annual survey asked individuals, “How do you track your global payroll performance against objectives?” Forty-eight percent said they do not track global payroll performance.
“It is surprising to see that 48% percent of respondents are not tracking global payroll performance at all,” said John Pearce, Senior Vice President of Payroll Operations at CloudPay. “Whether you are using an in-house or outsourced solution, your payroll performance is mission-critical, and performance deficiencies can significantly impact the broader organization.”
Accuracy is a critical element of the payroll function no matter the size or location of the employees and organization. When asked, “What do you consider to be the three most prominent root causes of decreased global payroll accuracy?” 50% of respondents put HR data inputs at the top. Lack of HR process standardization was next at 33%, and retroactive entries and corrections third at 26%.
“I was quite surprised to see that over 48% of respondents are not tracking their global payroll performance against objectives,” said Christine Keily, Chief Tax & Payroll Officer at Immedis. “At a base level, companies should look at monitoring foundational key performance indicators such as payroll accuracy rates or number of errors, time to process payroll, and cost per pay slip, for example.”
Keily said companies should then build on key performance indicators to streamline and find additional areas for improvement.
Payroll service providers can help organizations remain compliant when setting up and managing multiple payrolls across the world. When asked, “What is the primary resource or method you use to answer questions relating to global payroll processing?” 29% of respondents said they use global payroll providers. Eighteen percent indicated they use local partners, and 16% of individual use professional networks.
Many payroll professionals rely on more than one service provider to help them process payroll. When the survey asked respondents, “How many payroll service providers are you using today?” 43% of respondents use two to five providers, and an additional 19% depend on six or more to process their payrolls internationally.
“With many organizations paying a workforce over just a handful of countries, typically through multiple 'In-Country' providers, it's clear that technology alone isn't making global payroll and HR easy for industry professionals,” said David Munn, International Director of Managed Services at IRIS FMP. “It's the blend of technology, service, and employer/colleague engagement that will drive improved pay slip accuracy and employee satisfaction over the full employee lifecycle.”
In addition to the areas highlighted above, the survey analyzed several other areas of the global payroll profession and industry, including technology and payroll service delivery models.
Visit the GPMI website to view the complete 2021 “Getting the World Paid” survey results.
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Cynthia Crise is the Public Relations and Social Media Coordinator for the Global Payroll Management Institute (GPMI) and the American Payroll Association (APA).