Immedis recently collaborated with the Global Payroll Management Institute (GPMI) to conduct 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 organizations’ payroll teams 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 expanding, or are planning to expand, 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 a provider that can meet more extensive compliance needs?
COVID-19 and Global Mobility
The survey revealed some interesting contrasts in how the pandemic has impacted perspectives on international assignments. Fifty-eight percent surveyed responded that the pandemic has made them see international assignments in a new light. 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, there are two clear yet contrasting implications to be drawn from the pandemic’s impact on global mobility:
- Encouraged some organizations to focus more on hiring locally, having seen a dramatic reduction in the need for travel due to expanded remote working
- Expanded remote working has caused some organizations to consider a wider global talent pool and to hire beyond borders, an option they would not have previously considered prior to the pandemic
Adding to the contrasting survey responses about global mobility, 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 is unlikely to decline by much due to the pandemic, and in some cases may even be expanded in some organizations.
Where Is Global Payroll Managed?
Somewhat surprisingly, few organizations operate a centralized global payroll. In fact, its management is fairly evenly spread between local, regional, and centralized models. If companies are looking at expansion plans, it may be time to actively consider and research the benefits that accompany a centralized model and the global visibility this can bring.
Overall, the picture painted by the survey 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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