Moving away from in-house global payroll management can feel like a big step, whether you’re just starting out internationally and feel like you can handle it yourself, or you’re long established on the world stage but face inertia at the idea of moving away.
Whatever the reason, though, there’s a lot to be gained from partnering with a global payroll management company.
This article runs through ten of the key benefits of entering such a partnership.
What Is International Payroll Outsourcing?
Outsourcing international payroll is the act of partnering with a specialist global payroll company, and handing responsibility for the process over to them.
At a top-level, outsourcing international payroll is a popular way to streamline your internal processes and reduce the administrative burden on your organisation. The third-party will calculate pay, process payment, report to the relevant tax authorities, and more.
Outsourcing lets you tap directly into existing expertise rather than sourcing or building your own: expertise which delivers myriad benefits, including compliance with international law and knowledge of the ever-evolving legal landscape.
Why You Should Outsource Your International Payroll
Let’s drill a bit deeper into the clear benefits to your organisation that outsourcing can deliver.
1. International payroll is very complex
This isn't to say that your organisation wouldn't be able to handle it, but there is a certain amount of appeal to outsourcing complex processes to specialists. Money and internal resources that would have been invested in hiring and training payroll staff (where relevant) - and in the actual processing of international payroll - can be directed elsewhere instead, helping to achieve other key business objectives.
2. International payroll is always changing
Even if you have a skilled in-house team managing your payroll currently - whether national or international - the constantly shifting landscape of employment and tax law around the world means that their skill sets must be constantly developing. This carries costs that outsourcing removes from your business.
3. You maintain compliance around the world
By outsourcing your international payroll you guarantee compliance to all relevant legislation and regulations in the jurisdictions where your business operates. An international payroll will have fully up to date knowledge of what data is needed, which rules apply, how to act within them, along with what needs reporting and to whom.
4. Payroll errors are reduced and employee satisfaction is increased
Outsourcing to a company with the relevant experience and expertise, and the right systems and infrastructure already in place, makes a streamlined payment process more likely. And at the end of the day, for the vast majority of people within your organisation, this is what matters most.
Partnering with a global payroll specialist means that new locations can be plugged in and set up immediately, with immediate payment for all employees in that region as a result.
Keep things in-house, though, and there are more likely to be hiccups and teething problems. With payment, these disruptions can have huge impacts on the lives of your employees, so it’s best to get things working smoothly from the outset.
5. Your company benefits from regional expertise
A global payroll company depends on establishing and maintaining not only a high level of legal knowledge for each region but also a high level of cultural sensitivity.
In practice, and when combined with point 5, this means that your employees - and indeed customers - around the world stand to have a positive interaction with your business.
This may be something as simple as translating payment notifications and messaging into the local language, or something more elaborate like bringing in regional experts to advise on expansion to new regions. However this point manifests itself, your company that benefits.
6. They take care of the paper trail
International payroll involves more than just paying staff for the hours they work. There are payslips to generate, notifications to send, reports to file with tax authorities in each region, and myriad more paper-based boxes that need ticking.
When you keep payroll in-house, all of this falls at your feet. As does organising, securely storing, and sharing the accompanying documentation.
Then, if your operations attract the interest of any tax authorities, you’re required to assemble the right documents and present them for audit. All of this comes with enormous implications on human resource and budget allocation but falls under the remit of a global payroll services provider.
7. Improved data security.
Improved localisation. Operating in a new country isn't just a case of setting up a new office and cracking on as normal. There are new cultural norms to observe and operate within, a new company culture to build, new relationships to foster between offices in your organisation, and between your company and the community. Outsourcing to an international payroll company lets you take advantage of the staff they already have embedded in countries and cultures all over the world.
8. Systems are accurate and accountable
Accuracy and accountability are essential in payroll management, domestic or international. We’ve communicated pretty clearly the myriad benefits of utilising systems built, implemented, and managed by an external global payroll agency - here’s another.
What’s more, you have the flexibility to set KPIs around these metrics, meaning that there exists accountability between your business and its payroll provider, as well as between your business and its employees.
9. You have a single point of contact
Rather than chasing in-house payroll staff in offices (and time zones!) across the world, wouldn’t it be easier to speak with a dedicated account manager who know the ins and outs of your organisation and payroll systems?
With outsourcing, this is what you’ll get. Your queries will be directed to a person or team with the right global payroll experience to answer, and often with first-hand experience of working on your account.
This may sound simple, but you’ll be amazed at how much more efficient it makes things.
10. It means taking fewer risks
Ultimately, you want your global payroll systems to be sturdy, secure, and fit for purpose. You want the peace of mind of knowing that these same systems have encountered - and overcome - challenges for international businesses like yours.
You also want the peace of mind that working with experts brings. Global payroll agencies employ teams with years of experience on projects whose nature and goals align closely with your own. They know how to deal with the issues that will arise, and their expertise will ensure your business rides whatever waves operating internationally brings.
Outsourcing international payroll brings a wealth of benefits that will make a positive impact at every level of your organisation.
At Optimum Pay Group, we have the experience and credentials to deliver global payroll success every time. Our portfolio of clients spans the globe, and we’ve helped each one to streamline and optimise their processes.
Let’s have a chat and see how we can help you, too. Click here to talk to us!