Multinationals want improvement in payroll practices, Ernst and Young report reveals
Tom Newcombe, May 02, 2013
The majority of multinational organisations want improvement in their payroll practices, yet they are skeptical about whether payroll providers can deliver a comprehensive global solution, according to a survey from Ernst and Young.
The survey, Global payroll: myth or reality of 161 global senior payroll leaders found 70% said they are not confident a global vendor currently exists that can provide a 'truly global payroll solution'.
They identified a wide range of issues as potential hurdles, from total cost of the overall solution (16%) to the vendor understanding and meeting specific requirements (14%) and legal and regulatory requirements (12%).
However, chief commercial officer at payroll services provider Ceridian UK, Nick Laird thinks a global payroll provider "doesn't actually exist" as there are so many companies operating in small countries, there "is no point".
Laird told HR magazine: "Cost is obviously the big issue for companies when trying to select a vendor."
He added: "We also find companies face huge complexity issues when moving into certain countries and it's difficulty for them to keep up with everything that is happening on a cultural level."
The survey showed just 15% of respondents think the effectiveness of their payroll policies and practices are excellent and meeting best practice.
Stuart Steel human capital partner at Ernst and Young, said: "Accepting the status quo in payroll solutions may have worked in the past, but it is no longer adequate for companies that need to compete and expand in the global marketplace.
"Organisations need global payroll data to make important business decisions. Managers can build the business case based on risk and compliance to improve payroll operations, but access to the payroll data is proving to be very value added."
Steel added: "It's time for organisations to begin viewing payroll as a critical business process that requires a global solution with local flexibility."