Traditional ways of managing the payroll process are being challenged faster than ever, accelerated by technology, more complex legislation and data privacy regulations, advancements in benefits and rewards, and the changes in workforce structures.
This is according to NGA Human Resources report entitled, 2017 Global Payroll Complexity Index (GPCI), which surveyed 3 000 HR and payroll professionals in 48 countries including South Africa. It was produced in collaboration with payroll bodies in Europe, North and South America, SA and Australia.
The research finds there is a growing interest by companies in exploring multi-country payroll solutions, because of maturing cloud technologies and an increasingly connected globe. It says regulatory challenges, especially when growing a business or expanding internationally, are increasingly complex to navigate.
The study notes Africa's overall payroll complexity is slightly lower than average, with SA sitting towards the mid-point in the overall rankings. Most African countries are challenged by technical and HR updates, despite low numbers of payroll runs and updates - this is likely the result of maturing legislation and reporting requirements, it adds.
The study says new competitors are emerging from growing economies and changing business models threaten to disrupt established companies unable to respond by expansion and opening new offices to compete on a global, or at least, regional scale, adds the report.
"We continue to be increasingly aware of a burgeoning interest in exploring multi-country payroll solutions, because of maturing cloud technologies and an increasingly connected globe, says Anne Clifford, senior director, global payroll operations at NGA Human Resources.
Each country and business type has its own cultural, regulatory factors and union agreements that affect payroll, says the report. In 60% of countries, employee-specific contracts influence payroll, it adds. Additionally, multi-level rules, legislation and agreements are continually adapted to comply with economic factors and changing working practices, notes the study.
"The results of the Global Payroll Complexity Index confirm that multinational organisations face a myriad of demands such as managing employee data, employment and taxation compliance, data storage and privacy, salary and benefit calculations, and a wide range of work rules, and time-off benefits, says Mary Holland, global director of strategy, development, and training for Global Payroll Management Institute.
"Many of these are mandated by statutory country laws, work councils, and collective bargaining agreements. Organisations are challenged with managing risk exposure, increased government audits, standardising processes, and steering governmental changes while ensuring the integrity of their company brands."
"Payroll is no longer just about paying people. It's about managing data: the handling, control and security of data in an ever more complex tax and legal landscape," says Clifford.
More organisations are recognising the benefits of a complete payroll solution in standardising process and minimising risk, says the report. Other benefits include ensuring standard compliance, raising employee engagement and loyalty and ultimately, delivering financial savings, it adds.
"For organisations aspiring to elevate their business to the next level, having a robust payroll system and process in place is, without a doubt, fundamental. "Zero tolerance on payroll non-compliance and the competitive emergence of new business economies means, without a doubt, that businesses must have robust payroll systems and processes in place."
Share