By Raj Narayanaswamy | April 27, 2018
The cost of noncompliance is higher than ever
Global labor compliance issues are on the rise, with wage and hour litigation skyrocketing by 358% in the United States since the year 2000. The cost of noncompliance is higher than ever, and yet businesses continue to dedicate significant time and money to employ solutions that don’t fully cover their global time and gross payroll needs. Here’s how it works:
Traditional Vendors Leave Businesses at Risk
Multi-location, global businesses are well aware of the challenges of compliance and risks of noncompliance, and employ big-name traditional vendors to cover their payroll and compliance needs. Still, most well-known vendors that support time and gross pay needs only support major locations (US, Canada, UK, India, etc.) that typically house about 80% of a global organization’s workforce. But what about a company’s 20 employees in Greenland? Or satellite office in Romania? Businesses are on their own when it comes to covering the remaining 20%.
Managing Local Vendors has High Startup Costs and Marginal ROI
To cover the remaining 20% of their workforce, businesses tend to rely on multiple local vendors across locations — but the time, effort, and resources spent managing these vendors can be significant. Often, companies end up spending more time and money on managing payroll for this remaining 20% of their workforce than they do for the primary 80%. Balancing localization needs, the wide variation in local labor laws, various local union or collective bargaining agreements, and different payroll processes across locations can result in major payroll errors, overpayments, underpayments, and labor litigation.
Disjointed Payroll Results in a Vacuum in Knowledge Management
With multiple payroll solutions across locations, companies typically end up data sharing and managing through Excel, which increases potential for errors and information gaps. Collations, validations, and consolidation processes are also often handled manually through Excel, causing huge administrative overheads. Without a centralized system, it’s difficult to get a unified view of payroll (often requiring significant administrative overhead to gain even some semblance of a unified view), and visibility and control over gross pay processes and global compliance will be limited.
Alleviate This Headache by Streamlining Payroll in One Modern System
Global businesses need to reevaluate their antiquated, disjointed payroll processes in favor of a modern, streamlined solution. Ideally, a modern global time and gross pay solution should include these qualities:
- Scalable and highly-configurable to meet a company’s unique needs.
- Supports comprehensive end-to-end workflows including global payroll with compliance.
- Cloud-based with a continuous (and constantly updated) global compliance library at its core.
- A single platform to support time, absences, gross pay and compliance, that can scale across geographies,to eliminate those high startup costs in your smaller locations.
Original Source: HR.com
Author: Raj Narayanaswamy