Recently, Immedis and GPA took a survey of those within the payroll industry. We wanted to get a closer look at how organizations manage their global payroll data. We discussed the significance of these results for the bigger business picture in another article, but here we wanted to take a look at the statistics for a deeper dive into the “why” behind them.
We will examine insights from the following areas:
- Vendor Relations
- International Payroll Close
- Employee Experience
In every case, we found that most businesses operate with subpar payroll technology. They seem to be unaware of what the cutting edge of global payroll technology even is or looks like. They may not know how to transition to modern payroll. We believe that better messaging and communications can help organizations learn about their options and deliver better payroll to their employees.
Companies doing business in multiple countries face multiple different sets of regulatory requirements. As a result, many companies find themselves using separate vendors for each country. While this may function on some level, it is a poor global payroll data solution compared to using a single global payroll provider for comprehensive payroll data management.
Having a unified global payroll system means that it is far easier to share, analyze, and manage information across all of payroll. It also means that expanding into new countries is far easier—instead of having to get a new vendor for each new country, you can simply use the scaling power of your existing provider to expand.
The number of vendors that some organizations use is really incredible. We discovered that over 44% rely on at least 5 vendors at once, with some managing over 100. What likely happens is that a company doesn’t see the value of global payroll providers at first, and then gets stuck in a loop of adding new vendors.
Consider a company that only operates in the United States. If they choose to add locations in Canada, they might elect to simply get a new payroll system for Canada. Not seeing their distant global expansion, they don’t see the point in global payroll processing. And so with every new country they expand to, they get a new vendor, until they have too many to manage.
Evidence for this possibility comes from the fact that most companies don’t know about the possibility of global payroll.
Do you believe there is a single vendor who can handle all of your international payroll needs?
To which 42.4% said yes, and 57.6% said no. This means that more than half of organizations surveyed are simply unaware of the massively cost-saving option of global payroll. Perhaps these organizations are content with their situation and are not searching for alternatives. But many of those surveyed would likely not be content with multiple providers if they knew about global payroll.
We also asked:
How important is achieving international payroll delivery through a single vendor?
To which 46% said very important, 40% said somewhat important, and 14% said not that important. It is likely that many of those for whom single-vendor delivery is important are also in the majority who don’t know about global payroll. Only a minority thinks they would not benefit from having a single vendor, but many of them would probably change their mind if they were better informed.
Despite this, almost half of our respondents have had problems with their payroll providers.
Has your payroll provider(s) ever failed to deliver on their service?
To which 46.8% said yes, and 53.2% said no. Combined with the above results, this is astonishing- most respondents have had problems with their payroll providers, yet don’t know or don’t care about using a single provider. Yet having a single provider would improve accountability and transparency, and reduce the chances of error.
International Payroll Close
Modern global payroll solutions, like Immedis, allow for rapid, real-time delivery of information. But old-fashioned systems, which can be as basic as an Excel spreadsheet and manual entry, are much slower. They often require days or weeks of work to correct the data, and make inputs and changes. They are also lacking in data security.
We asked survey respondents the following question:
“What is your current payroll close date for all data inputs and changes?”
The results indicated that there is a wide spread in payroll close dates, with 39% saying under 6 days and 11.7% saying more than 15. In this case, it is clear that many organizations would benefit from real-time data and improved data security.
Employee experience is at the heart of payroll operations. Getting paid is, after all, the main reason why people work, even if they do find meaning in the work itself. When it comes to employee experience, there are many things that payroll providers can do to make employees happier.
New trends, such as on-demand payment, give employees greater control over their own payroll. Better communication processes for payroll queries make life easier. And guarantees for remote work and gender pay equality ensure that workers feel they are being treated fairly.
We wanted to know what initiatives, if any, our survey respondents were taking to improve their employee experience. We gave them a list of possible initiatives that they could check off if their payroll teams and data were being used to support them.
Our survey results showed that only a minority, 37.3%, were improving the employee experience at all. As for specific results, a mere 7.4% said they were improving their employee well-being, and 15.7% were promoting diversity and gender equity. In addition, less than 12% were using payroll to facilitate remote work. Given how popular remote work has become in recent years, there is a lot of room for improvement here.
Again, many companies are likely not aware of the options that global payroll brings. If they were, they might be more likely to take these initiatives. But it is particularly surprising that so few are using payroll to promote diversity and gender equity, given that salary parity is a big part of equality.
Conclusion: Why Communication About Global Payroll Is So Important
Only a minority of the payroll managers we surveyed were taking full advantage of the powers of global payroll. Most delivered lackluster employee experiences, had poor payroll close cycles, or were tied up in complicated networks of multiple payroll vendors.
We believe that more businesses would benefit from global payroll if they received more communications and information about it. Companies that have dozens of vendors, for example, might have had just one for years, as soon as they started expanding internationally. This would have led to lower rates of problems with payroll providers and easier management of data.
In any case, the insights from the GPA survey are valuable for our continued operations and decision-making.