Last year was a game-changer for payroll professionals. Organizations experienced an upheaval in their routines and, in many cases, the redeployment and redistribution of their employees. Added to the impact of COVID-19 and the sudden shift to sheltering at home was socioeconomic instability that stemmed from political and social unrest.
For workers, stress and high levels of burnout were prevalent, and uncertainties, including furloughs and layoffs, became part of everyday life. Since then, payroll has emerged as the single source of truth in organizations: the most reliable bond between employer and employee.
Much has been written about engaging employees. It’s well documented that employee productivity plummets when retention risks increase. There’s nothing more important to employees than getting their wages, on time and accurately. The expectation is amplified when employees are dispersed around the globe. Combining global payroll and payments can help bring together the modern workforce, streamlining tax and labor complexities for the employer and raising employee confidence through well-defined, deadline-driven processes. The COVID-19 global pandemic put into sharp focus why organizations need to centralize and digitize business-critical functions. Global payroll is no exception.
Post-Pandemic Concerns, Changes
As organizations look to post-pandemic recovery, there will continue to be many changes. Employees have new expectations shaped by these uncertainties. Financial stress is on the rise, especially among millennials, who were particularly hard hit. According to Charles Schwab’s 2020 Modern Wealth Survey, 57% of Americans say COVID-19 has financially impacted them or a close family member. In addition to their heightened focus on financial wellness, employees require reassurance and empathy from their employer, qualities that are even more important during a crisis.
Yet, from new expectations come new ways of living. Employees in the U.S. fled from New York and California for less expensive locations such as Raleigh, North Carolina; and Austin, Texas. Such unanticipated changes in location—whether short-term or longer—have resulted in worries for already stretched HR and payroll professionals grappling with the related tax implications. Women have left the workforce in droves during COVID-19 due to family pressures that range from homeschooling children to balancing eldercare. The May 2020 U.S. Labor Report cited that a shocking 2,651,000 women left the workforce at the start of the pandemic. Often, it’s these same workers who held service occupation jobs, crippling categories that were already in trouble.
There is also a need to do more with less. Many organizations have put in place cost-saving measures to weather the pandemic and prepare for recovery. Yet, areas such as HR and payroll are busier than ever, navigating new work situations and new regulatory requirements. Practitioners are increasingly looking to become more efficient by streamlining processes and introducing smart solutions to automate tasks and increase productivity.
Global Payroll as a Unifying Force
With all of these changes and the degree to which they’ve occurred, it’s readily apparent why unifying global payroll is a practical necessity. Having one system of record ensures data integrity, pay processing timeliness, and payroll and payments accuracy. The model reinvents traditional payroll, moving it from a decentralized model with varying process maturity levels to an elegant, centralized, technology-driven standardized operation. Consolidating on a single platform means employees, managers, and employers gain certainty in uncertain times through better tax and compliance reporting. Increased automation and digital transformation make for a more modern employer brand, attracting and retaining employees. And employees are empowered, loyal, and more productive.
Process automation is just one of the areas of improvement to consider. Single-person dependencies were uncovered by the pandemic. For example, companies had not anticipated the number of unemployment claims, and teams that did not have cross-trained staff couldn’t meet the corresponding deadlines. Documentation locked away in file cabinets was of little use to those dealing with these high-volume situations. This situation is yet another ringing endorsement for building one unified digital platform that can support organizational resilience.
People readiness is another focus area. Since the pandemic, traits such as trust, inclusivity, and resilience have a strong correlation with business outcomes, specifically engagement, productivity, innovation, and retention. The workplace infrastructure for people to build social capital where connection and purpose are attributes of a strong community is prized. Unified global payroll is a key area that can signal that change and adaptation are parts of the culture and something to be embraced.
A well-designed global payroll strategy isn’t an initiative to be taken casually. Few organizations were fully prepared for the pandemic. Moving to this desired state requires careful consideration, especially in selecting the right outsourcing partner that can provide both treasury and payroll services. We’ve discovered that COVID-19 uncovered many moving parts and fragmentation. Employees have lost faith in employers that didn’t step up with support, new safety protocols, and empathy.
As the world continues to reorganize, grappling with complex human challenges, isn’t it time to look deep into your existing payroll procedures? Paying your employees on time and accurately now goes well beyond meeting your perfunctory compliance and regulatory requirements. Organizations that deal with fast-evolving situations know that it pays to prepare for the unexpected and build robust global strategies. A unified payroll platform demonstrates true leadership and ensures organizational resilience in the face of extraordinary challenges.
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David Barak is the Chief Marketing Officer at global payroll provider CloudPay. He leads a global team focused on communication, brand strategy, HCM ecosystem partnerships, and HCM integrations.