The 2022 “Getting the World Paid” industry survey conducted by the Global Payroll Management Institute (GPMI) 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), 25-29 April, over 400 global payroll professionals shared their professional insights on several key areas of global payroll.
Global Payroll Challenges
The annual survey asked individuals to highlight their three biggest global payroll challenges. An overwhelming 68% stated that compliance was their biggest challenge. Respondents said the second biggest challenge was using multiple vendors, with 34% identifying it as one of their top challenges. Designing the best operating model was next at 27%, with language barriers in fourth at 25%.
“When asked to identify their biggest global payroll challenge, a quarter of respondents list ‘language barriers’ while 15% cite ‘cultural issues,’” said Graham Wylie, VP Marketing International at ADP. “This gulf in cross-border understanding is borne out by our own research with the Economist Intelligence Unit, which found that the most common HR challenge among larger companies is ‘understanding cultural differences.’”
Wylie continued: “We know that employees—post-pandemic—are open to broadening their horizons. In fact, our recent ‘People at Work 2022’ study on global workforce sentiment finds that more than four in 10 respondents have contemplated relocating overseas. This ever-increasing mobility means employers need a global payroll partner staffed by specialists who can not only speak the local language but are completely clued in on the cultural nuances that can make or break a business expanding abroad.
Each country contains its own unique and challenging set of labor laws and tax regulations. When asked which countries payroll professionals found to be the most challenging to pay employees, the United States, Canada, and the United Kingdom formed the top three.
Global Payroll Performance
Payroll standardization and performance remains a work in progress for many processing payrolls internationally. The annual survey asked individuals “How do you track your global payroll performance against objectives?” Fifty-one percent of respondents said they do not track global payroll performance.
“We all want to deliver the best possible service for our employees, so why are we not seeing higher numbers tracking performance? Is it lack of awareness, lack of guidance from senior management, or we don’t have access to the right data to allow us to check?” said John Pearce, Senior Vice President of Global Payroll at CloudPay.
Global Payroll Technology
Advances in technology continue to change the global payroll landscape. When payroll professionals were asked, “which of the following technologies are you and/or your payroll outsourcing partner using in your global payroll processes,” 27% indicated data analytics, with 18% saying they use enhanced reporting, and 16% said they use global cloud connectors.
“I am hugely excited to see that payroll teams are focusing their technology on payroll data analytics and enhanced reporting,” said Richard Limpkin, Chief Innovation Officer at Immedis. “We believe that the true potential of payroll data in unlocking the greater organization has yet to be fully realized. Once senior leaders begin to understand its power, it will dramatically enhance the impact of the payroll function.”
Service Providers
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?” 21% of respondents said they use local partners. Twenty percent of individuals indicated they use global payroll providers, and 17% 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?” 54% of respondents use two to five providers, and an additional 30% depend on just one service provider to process their payrolls internationally.
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 2022 “Getting the World Paid” survey results.