In collaboration with the Global Payroll Management Institute (GPMI), Immedis recently completed a survey of its subscribers, posing the question, “Is global payroll ready to tackle the rise in globalization?” Respondents represented a cross-section of industries from technology to manufacturing and health care.
Of those surveyed, a significant portion were global payroll managers, and more than a third work in organizations with more than 10,000 employees.
Payroll has transformed in recent years, with technology and innovation dramatically reshaping the industry and the operation of payroll itself. So, what does global payroll look like in 2021? Did the pandemic throw more obstacles in the way or alleviate some? Are companies changing expansion tactics and views on global mobility?
Compliance Remains a Top Concern
To make sure they are staying current with changing legislation in current and future locations, most rely on third-party advice. The capability of these providers to cover such needs divided respondents to a near perfect 50:50 split between those who are confident in the ability of their provider (51%) and those who are experiencing some issues.
With a little more than one-third of respondents saying that they are moving, or are planning to move, into new countries, evaluation is needed by those experiencing issues regarding where these problems originate. Is there something amiss internally, or have some organizations outgrown their current provider(s) country coverage and may need to look at someone who can meet more extensive needs?
COVID-19, Global Mobility
The impact of the pandemic shows some businesses have a changed view on international assignments, with 58% saying it has changed how they view the need for them. The ability to work remotely is overhauling many traditional business practices. It remains to be seen just how long term these changes are, but for now, it’s offering companies two clear options:
- Created the ability to hire locally, having seen the need for travel may not be necessary
- Opened the global talent pool to hire beyond borders that they would not have previously considered
On the flip side of this and countering the above, many companies (more than 75%) still have measures in place to track mobile employees, and almost 50% cited having a robust global mobility strategy in place or under review.
Meeting the legislation and tax obligations for different assignment types overwhelmingly remains a top concern at more than 71%.
So, while hiring practices and options to work from home may change to some degree, it appears the need for international assignments will not come to an end.
Where Is Global Payroll Managed?
Somewhat surprisingly, few organizations operate a centralized global payroll. In fact, its management is pretty evenly spread between local, regional, and centralized models. If companies are looking at expansion plans, it may be time to actively look at the benefits that accompany a centralized model and the global visibility this can bring.
Overall, the picture painted is mixed. But what is clear is that there are still significant numbers of payroll managers facing uncertainty around provider capability, compliance, and their ability to deliver payroll to employees deployed to new geographic locations.
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Christine Keily is the Chief Tax and Payroll Officer at Immedis. She has more than 20 years’ experience in global payroll, taxation, and social security. As Chief Tax and Payroll Officer, Kelly is responsible for the delivery of a first-class service to Immedis customers.