We often say that our biggest competitor is Microsoft Excel.
It is true that much of international payroll comes down to operations on spreadsheets. Some prospective clients ask why they should use Immedis if they can get away with using Excel. To which we answer: why would you want to rely on spreadsheets? Spreadsheet applications like Excel don’t handle compliance issues, manage different rules for different countries, or provide security. Compared to robust global payroll providers, it’s like driving a horse and buggy instead of a car.
Not all companies realize the immense difference that global payroll operations can make, but many are starting to see where they are lacking. We took a survey with GPA (Global Payroll Association) to find out where our services can have the greatest impact. To start, our survey discovered that our fears were not misguided. Over 71% of respondents indicated that they frequently use Excel within payroll processing and data analysis.
Of course, the optimistic take on this is that most of the potential payroll application market is still untapped. Those 71% of businesses could all benefit from using Immedis software.
Let’s take a look at some other key results of the survey.
International Payroll Close: From Comfort to Crunch Time
We asked companies the following question: “What is your current payroll close date for all data inputs and changes?”
Respondents fell into four broad classes:
- 11.7% indicated 15+ days before payroll close
- 22.9% indicated 11-14 days before payroll close
- 26.4% indicated 7-10 days before payroll close
- 39% indicated under 6 days before payroll close
This suggests that most organizations could do better when it comes to their payroll close time. Few are handling data in real time. Most companies lose time by transferring information back and forth between external service providers. Imagine the nuances and complexity beyond just compensating employees as well. When focusing on other countries throughout the world, there is a very different approach to benefits, tax, withholding and things like bonuses and commission. Excel can track variances, in theory, but it becomes increasingly difficult to verify changes as they happen each month. With 39% of respondents claiming that they are processing payroll 6 days before payroll close, this is the equivalent of cramming for a test in university. Too much margin for error, and completely negates a Payroll specialist’s ability to make strategic decisions versus reactionary decisions.
We wanted to get a sense for how businesses managed their payroll through multiple vendors. One advantage of using an integrated global payroll system is that it combines data and processes into a single platform. It immediately alleviates potential shortcomings or variability within external partners.
Our survey discovered that over 44% of organizations are juggling at least 5 vendors at once, with some managing over 100! We also wanted to find out about the beliefs and attitudes regarding vendors for those we surveyed.
Two questions we asked were:
Do you believe there is a single vendor who can handle all of your international payroll needs?
- 42.4% said yes
- 57.6% said no
How important is achieving international payroll delivery through a single vendor?
- 46% said very important
- 40% said somewhat important
- 14% said not that important.
Together, this information suggests that there is a vast segment of the market that is simply poorly informed about their options, or they have been burned in the past from other partners that have over-promised. More than half of businesses might not even know that their global payroll needs can be handled with a single vendor. And a large chunk does not know that delivering international payroll through a single vendor can have a tremendous impact.
Integration with Human Capital Management (HCM) Software
Our survey results showed that most organizations lack payroll and HCM integration, or lack HCM systems entirely.
- 66.7% have some form of HCM system in place
- 33.6% have a cloud-based payroll solution in place
- 14.6% have seamless Payroll/HCM integration
- 49.3% have integration that requires manual intervention
- 36.1% have no integration whatsoever
Integrating global payroll with HCM systems is one way in which Global Payroll systems like Immedis provide immense value to businesses. It means easier data sharing and analysis. The fact that most organizations have some form of HCM in place, but very few have seamless integration with Payroll, means that Global Payroll is poised to provide benefits to large swathes of the market.
Payroll Information Access to Enable Proactive Decision Making
Global payroll systems provide the greatest speed and ease of access for payroll reports and employee data analytics compared to any other solution. Regretfully, not enough businesses take advantage of this fact.
- 7% request information from service providers to get reports
- 31% perform manual consolidation of reports from multiple systems
- 31% rely on service providers who deliver as part of their service
- 31% access a real-time dashboard and access to relevant reports
With most organizations pursuing a sub-optimal path to accessing payroll reports and analytics, this drastically lengthens the time it takes to produce global payroll related reports. This can make it harder to pay payroll taxes and adhere to local tax laws.
- for 19%, it takes over 1 week.
- for 41%, more than 1 day.
- for 12%, 4-8 hours.
- for 12%, 1-3 hours.
- just 16% can instantly access their reports
With just 16% of respondents receiving reports at optimal speed, that leaves 84% who could potentially benefit from Immedis’ services. The data speaks for itself.
International employees may need to update their payroll related information for a variety of reasons. They may move, change phone numbers, take leave, or request changes to their payment schedule. It follows that modern global payroll processes allow for global employees to self-service their change requests. Payroll data, much like Healthcare information, is also personal and private. It only makes sense for employees to have the ability to change their own information and be in control of things like banking, geographic information, etc.
Yet almost half of organizations surveyed have no way for employees to do this:
- 51.7% do have self-service capability
- 24.9% have employees contact a member of HR or Payroll
- 8.8% have a dedicated mailbox for payroll queries
- 14.6% relies on another solution
Additionally, a modern payroll solution would allow for international employees to request on-demand pay. Modern people, after all, expect on-demand rides, food, and tickets at the push of a button. The weekly, bi-weekly, or monthly payment schedule is largely a vestige of the 20th century. With statistics outlining that nearly half of organizations create additional hurdles for employees, this creates unnecessary friction and a lack of control.
Very few organizations offer on-demand pay:
- 70.2% have no plans to implement on-demand pay
- 16.1% are unsure
- 9.8% have future plans to implement on-demand pay
- just 3.9% currently have on-demand pay in use
Conclusion: Why Global Payroll Has Room to Grow
Not enough businesses have the proper awareness or take advantage of global payroll systems. It can be an intimidating initial conversation for a Payroll Specialist, CFO or CIO to wrap their mind around unifying In-Country Partners around one global Solution. Immedis has made the conscious choice to partner with 5 of the leading HCM Suite’s to fast track onboarding and reduce switching costs. Our research suggests that this is largely due to a lack of information. When businesses think they can get away with Microsoft Excel, they might not bother looking for other solutions. The other unfortunate reality is that the cliché, “If it isn’t broken, don’t fix it” applies when information and awareness is lacking. We are on a mission to help folks understand there is a better, more efficient way.
Global Payroll Setup provides many advantages that not enough businesses enjoy:
- Reducing the number of vendors to manage
- Integration with HCM software
- Immediate payroll information analysis
- Streamlined employee experience
Immedis offers a global payroll application that helps systematically manage all of the above details. Our system brings businesses to the highest level of integration with regards to HCM and Payroll. It is self-operating and self-correcting, allowing users to submit and access data in real time across domains.