The COVID-19 pandemic raging for the past 18 months has impacted everyone and everything, including business operations. This also includes payroll operations. With almost all of global workforces moving to remote work and working from home, employees are relocating to their native place. This relocation has a significant impact on calculating and processing payrolls and various social securities to employees. Against this (undoubtedly gloomy) backdrop, the Global Payroll Association (GPA) had organized a half-day virtual event known as the ‘Global Payroll Summit’ on the 23rd of June, 2021. From Quadrant Knowledge Solutions, I had the opportunity to attend the event and take away key insights in regard to the various challenges & opportunities pertaining to the global payroll sector and various market opportunities in regard to payroll as a profession. The summit was an interactive event with multiple virtual lounges to interact with fellow members and experts from the industry. The primary theme of the summit revolved around the future of global payroll, impact on the bigger business picture, social security, and payroll reporting & analytics.
The scattered data and the In-Country Payroll Providers (ICP) who are based across time zones are major problems with payroll processing. These problems make it difficult to centralizing and managing payroll in real-time a difficult process. This, in turn, results in increased turnaround time to process the global payrolls. However, these hurdles also provide an opportunity for the payroll providers to combine their expertise and collaborate with Subject Matter Experts (SMEs) for enhanced centralized and standardized payroll operating processes. Moreover, as vendors move to a cloud-based subscription model, the investment and dependency on one vendor decreases and organizations need not be with one vendor throughout their lifetime. This reduces the risk for organizations associated with “keep all the eggs in one basket,” asserted Ivan Chaney, Senior Director, Global Strategy, Ceridian. With the workforce working remotely, the demand for employee experience, self-service portals, on-demand pay tools, adherence to compliance, and enhanced reporting capability for payroll software providers are mounting. Moreover, this helps employees to update their payroll-related information on the portal, rather than sending the same through mails or contacting the payroll team.
Furthermore, an important component of payroll is social security or national insurance, which includes various components of its own. Each country has its specific rules regarding social security. Moreover, it becomes difficult and complex for organizations to manage compliance and regulations in regard to social security for a particular employee if the employee is on Country ‘A’’s payroll but working in Country ‘B.’ Both the country will have different compliance in place, and the decision on social security payment needs to be based on various parameters.
At the end of the day, it is important to have analytical insights on the expenditure on the global payroll and various components associated with it, as it takes up a majority of organizational expenses. With data scattered around the globe and with various exchange rates and currencies at play, it is important to have centralized visibility and clarity over payroll across countries. The amount of data generated while processing payrolls can provide insights into the financial health of organizations and empower strategical decision-making processes for various teams, including the finance, HR, and payroll processing team.
With the complexity of payroll processing and compliance, it is safe to assume that there are various opportunities developing for payroll professionals. When I talk about payroll professionals, it is not about manually doing the paperwork or calculating the payroll, the focus is on the bigger picture where the payroll professional understands the business operations, articulate all the data, and narrate the payroll story so that the c-suites and managers can work on the same and plan for an upward business. Even if we take into account the pandemic, the payroll professionals made sure to deliver employees’ payroll and show value proposition despite the fact that the employees were located in multiple locations and areas globally.
About the Author:
Pallavi Bothra is a part of Quadrant’s global research and consulting team. She is responsible for enterprise software research and also conducts global strategic market outlook, SPARK Matrix Analysis, and client consulting assignments. She has also worked on various strategic research and vendor evaluation projects and is a part of Quadrant’s best practices team in identifying the most promising companies in the enterprise software domain space. Pallavi has been an integral resource for consulting assignments including detailed market mapping, custom market intelligence, analyst briefings, and others.
Pallavi holds a Post-Graduation in International Business and Marketing from Sri Balaji University (Pune, India) and a B.Com from the University of Delhi, India.