Ensuring smooth payroll operations can be a significant challenge for global employers. Moreover, if it is a business expanding into a new market, it gets even more critical to be aware of any possible mistakes that may take place. Such errors usually impact a business’s operations and its efficiency to a large extent, which eventually becomes a big mess!
In this article, we will look at the five such common global payroll errors global employers make. As we understand these mistakes, we will also discuss how to avoid these mistakes and ensure that your business operations run smoothly!
Here are the five most common yet significant global payroll errors to avoid.
No awareness of global employee Benefits
The first and most common global payroll mistake businesses make is having little to no idea of the global employee benefits. For any organization looking forward to extending its operations to new countries, it is a must to have a clear idea of the employment benefits. For instance, sometimes local governments provide healthcare benefits for employees. Some countries have separate rules and regulations for these employment benefits through private insurance companies.
It depends on the country and its government to decide how much and what category of benefits employees will be entitled to. There are many other rules concerning employee benefits that differ from country to country. Therefore, if you are about to expand your business to a new country, make sure to have a clear idea of the employee benefits you will be responsible to provide your staff.
Partnering with the wrong payroll service
One of the most common mistakes a business ends up making is partnering with the wrong organizations to manage payroll operations. For businesses that operate in multiple countries, one of the most common options is to outsource a specific part of their global payroll process. However, a significant part of outsourcing payroll services is choosing the right partner you can trust with your business. It must be an organization that truly understands your business and what would be the best-suited strategy to deal with its payroll processing. An organization that holds relevant expertise and experience in providing reliable payroll services to a business.
While there would be many other options in the market claiming their expertise, it’s up to you to make a conscious choice for your business. It’s not always an easy step as you may make mistakes while choosing the right organization to manage your business’s payroll service provider. Therefore, you must always do your research and look out for any red flags while deciding on a reliable service provider for your business. Remember, it is always a decision that can either make or break your business’s payroll operations.
Managing multiple payroll providers with no data consolidation automation
One of the most common yet effective ways to handle global payroll operation systems is probably outsourcing. From planning for expansion into new markets to processing payroll, organizations outsource the services to their in-country partners. As popular as it is as a method to manage multiple payroll providers, it also comes with its share of demerits for an organization. Handling multiple providers become an even more difficult task to perform in the long run with a consistently increasing amount of suppliers.
The amount of data transferred between the central system and external payroll providers makes it hard to manage so many tasks at one time. It leaves no possibilities for further standardization and maintaining an efficient and transparent workflow concerning data transfer. However, you can work jointly with an employer of record to get additional assistance with managing multiple payroll providers. In this way, you can ensure complete transparency and effectiveness in your workflow.
Depending on spreadsheets rather than going for payroll software
What’s the one common practice that most businesses use to keep their records? It is undeniably the spreadsheets. It is one of the most convenient and comprehensive ways to keep track of organizational data. However, with the advancements in technology, the use of spreadsheets now sounds outdated. Many organizations still depend on spreadsheets while processing their payroll. It comes with many disadvantages that ultimately slow down the entire process and increase the possibility of errors in data.
Moreover, if it is an organization processing payrolls on a global level, the errors may become frequent and problematic in the long run. A better alternative is to go with payroll software to standardize and automate the entire payroll process. It will significantly consolidate your organization’s payroll data on a single platform with little to no possibility of errors. For more assistance with global payroll services using the latest software technology, we’d recommend you partner with a reliable Employer of Record.
Lack of data security
Another common global payroll mistake businesses make is not ensuring protection for critical data. It is essential to understand that payroll data is highly sensitive information. For the same reason, it must be handled with utmost care and sensitivity. If your business runs payroll in multiple countries, it may become even more essential for you to provide sufficient data protection, or else it may become a major disaster. It is also necessary because countries have different sets of rules and regulations concerning data protection.
Further, performing global payroll operations needs frequent transfer of data between systems which significantly increases the risk of a data breach. Therefore, you must always ensure to provide tough security to safeguard critical data to prevent it from any possible data breach or online attacks.
The common errors discussed above are some of the most basic yet significant points to consider. Even the most trivial mistake can cost your business a lot in both the short and long term. Hence, if you are about to take any decision regarding payroll operations for your business, do not forget to keep these points in mind. We hope you will find this guide immensely helpful in making wise decisions for your business’s payroll!