How Scalable Payroll Software Fuels Global Business Growth

Modern payroll software provides the power and flexibility businesses need to expand into new countries and hire more employees. It is a strategic asset in the growth of global businesses.

Without considering the effects of future growth, relying on an inadequate payroll management system now can lead to problems with achieving scale in the future. 

Your payroll process might function at your current size but break down when your company has doubled its workforce or expanded to a dozen more countries. Such a breakdown can significantly hamper employee sentiment and restrict future opportunities for growth.

Business leaders can sidestep these issues and lay the groundwork for future growth by embracing a flexible, modern payroll processing system that works on a global level. In the process, they can manage challenges like complying with local laws and regulations, handling and analyzing data, and breakdowns in interdepartmental communication.

The Practical Significance of Scalability

Growing a company to larger overall operations, in terms of the size of its workforce and equipment base, can bring many benefits. Such size increases can come with cost reductions from economies of scale and overall increased revenues.

For global businesses, expanding into new markets comes with the benefit of diversifying the entire operation.

However, the benefits of that expansion come at a cost. Many business operations look different at one size compared with another. A system that works for a handful of people will often not work for thousands of employees. At the same time, a system that works in one country is not guaranteed to work in another country—there are different laws and regulations to take into account.

Therefore, it is important for expanding global businesses to design their operations with the goal of achieving scale in mind. They should build flexible processes that adapt to working with more people in more places.

Challenges with Scaling Global Payroll

Payroll, like many business operations, functions differently when applied to different numbers of people. This is especially significant in the case of multi-country payroll, in which a company may coordinate different-sized operations in different countries, facing different regulations for processing payroll in each locale. Complications with currencies and time zones increase rapidly with every new country added. 

In any case, the growth of a global company involves both expanding into new countries, as well as expanding the size of the workforce within each country. Both bring challenges that require a sophisticated international payroll setup to navigate.

Expanding internationally requires aligning with different tax laws, labor laws, data security requirements and wage regulations. This is especially pertinent for remote employees, who may not always be aware of which country’s tax laws they are liable for, or which tax forms they need.

Size matters within countries and at the company-wide level. It is not uncommon for a global business to have very large operations in some countries, but only a handful of employees in others. Their question, then, is whether to use the same payroll system everywhere or to rely on different frameworks for different-sized operations. 

Companies that have ambitious expansion plans across the globe would be wise to coordinate or consolidate their entire payroll operation as much as possible. A patchwork system of different global payroll services in different locations can quickly lead to communication breakdowns. 

It is common for organizations that are managing the complexity of multiple locations across the globe to have several in-country providers, localized partners and various software solutions to execute global payroll. This creates complexity for organizations trying to achieve one unified view of their global payroll costs. The power of One View is the ability to provide a consolidated view of payroll worldwide and singular employee experience, irrespective of the nuances within each country.

Difficulties in cross-department communication also increase at greater sizes. Finance and HR are two departments that commonly interact with the payroll provider and rely on its payroll data and insights. This communication can break down if the payroll management system is not equipped to function with more employees or with additional countries.

Expanding with Your Company: Achieving the Holy Grail of Payroll

A robust, flexible global payroll system can help solve problems associated with future growth.

Instead of having separate and disorganized manual processes, when you achieve true scale, you then have the ability to offer standardized workflows. Payroll becomes unified across different countries and contexts.

Instead of several different views, you can have data in a normalized, single place. A single source of truth supplies managers, payroll professionals, and employees with the information they need.

Instead of having to go through HR, employees can use self-service portals to easily access and change their information. An employee who needs to alter their address or bank information can simply do so online or through an app.

Ultimately, a modern payroll system provides the features necessary to expand internationally at scale. Using a consolidated system like One View prevents the problems associated with a patchwork system of payroll processes.

Conclusion: The Importance of Global Payroll Software

While sometimes overlooked, payroll is a function that lies at the heart of all business operations. Employees show up to work because they expect a paycheck, accurately calculated and on time. As a result, faulty payroll operations can become a serious bottleneck when it comes to expansion. 

In addition, payroll errors are expensive. Ernst & Young estimates the average cost of an incident at $291. Modern global payroll software is crucial for avoiding such problems and making global expansion an easier and more productive process. Business leaders should be making decisions about managing global payroll that reflect not just their current needs, but their anticipated needs for the future.

UKG One View provides a powerful global payroll platform that adjusts to the needs of your business as it grows. With features like HCM integration, real-time reporting and ultimate flexibility to choose how payroll works best for each unique organization, it offers payroll leaders the tools they need to approach the problems of running a globally expanding business in the 21st century.

Interested in hearing more? We’d love to talk.