Although the COVID-19 has changed the reality we live in and our daily basis routines, we still live in a hyper-connected world. And although it remains to be seen if, as some claim, this will have an impact on global processes (or if, as has happened after the 2008 crisis, it will mean a push towards internationalization). What is clear is the determining role that technology plays and will play regarding international management, with special mention to payroll processes and operations led by professionals in this field.

In recent years, and now even more so in a post-coronavirus scenario, multi-country operations are always defined by high exposure, which involves a constant need for control, accountability and updated and always available information. With legislation changing very fast and adapting to the unexpected circumstances that we live in, it is necessary to have enough visibility to manage the entire process with guarantees, from start to finish and in any geography in which we operate.

Challenges in International Payroll Management Processes

In this context, the HR professional is particularly exposed to the need to coordinate and lead multiple markets, each of which is moving forward at a certain pace and recovering from a pandemic that has affected everyone, but not everybody in the same way.

The professional who leads these payroll management processes is the one in charge of running a ship that sails in waters where multiple factors move. From cyber-security and the need to adapt to a new digital paradigm, to the impact that new workplace modalities (such as teleworking) have on these situations. Thus, if we add the pre-coronavirus factors and those that have been added after this situation, these are some of the challenges that the Human Resources professional in charge of managing international payroll processes must handle:

  • Cultural differences.
  • Physical distance, with components such as time difference or new working modalities like teleworking
  • Lack of global resources.
  • Lack of global leadership.
  • Need of development regarding digital skills
  • Cybersecurity and compliance. Data privacy management. Adaptation to multiple legislations and increasingly demanding regulations.
  • Money movements.

Management models and technology

Technology must be an essential driver in this situation, but it must be followed by a model that adds value to the management of the process.

Making it as simple as possible, we can define two organizational systems. A traditional one, in which technology is there, but by means of unsafe and inefficient solutions such as email communication; and the second one: a system in which technology is the key driver element, the one who adds real and differential value to the ecuation.

In the first model, information is transmitted in a “non-organized” way, derived from the irregular flow of inputs and outputs in the payroll process. The HRBP (Human Resources Business Partner), based in the companies’ headquarters, is the main point of contact with this information (continuously exchanged with the local managers), leading the payroll processes of each of the company’s locations. This would translate into a low visibility of the overall picture because there is no monitoring of it:

  • Firstly, communications are through email, there are no standardized processes since they exclusively attend to local compliance of each country’s payroll.
  • Secondly, payroll reports are basically generated in heterogeneous formats.
  • Thirdly, but not least, the risks of errors and sanctions are higher.

In a multi-country management system in which technology and processes play a key role, the organization, availability and accountability of information are the basis for the process performance. This is the result of the integration of a single technological platform for payroll available for all countries. Al the actors (independently of its country or location) will report to the HRBP that is at the top of the process, acting as a single point of contact and leading to a global information transfer system.The ability to speak the same “language” (as the process and reports are the same in each country), as well as monitoring the entire process from start to finish, generates much more visibility and control of activity in each of the locations.

It is important to emphasize that when we speak about technology we do not simply refer to payroll software, but to a model that it goes far beyond by making use of payroll data at a global level, allowing for global interpretation of data and being able to optimize operating time. Technology is the solution that accompanies international activity and allows for the unification of processes, which facilitates the simplification of outsourcing options and helps in the centralized management of personnel and payroll administration.

At Auxadi we create value with technology by developing a payroll and personnel administration platform that makes our clients stronger in terms of Payroll Intelligence. Not only does it allow us to have our own company’s data, but it also allows us to analyze it creating knowledge about the environment and facilitating decision making and strategies in the company. Real-time reports about the evolution of the workforce in the company or the company’s costs per employee are a fundamental tool when we design the future plans of a company.

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Marta Almenara

Marta Almenara
Payroll Services Manager

All information contained in this publication is up to date on 2020. This content has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this chart without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this content, and, to the extent permitted by law, AUXADI does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this chart or for any decision based on it.