Rethinking Payroll for the Global Workforce

Countries around the world are adapting and embracing working remotely. Employers and employees have significant ongoing advantages on both sides of the coin, provided that they can make remote work actually work.

In its 2022 Work Trend Index, Microsoft Work Lab conducted a survey across 31 countries and found that 53% of respondents are likely to consider transitioning to hybrid work in the coming year. Similarly, Webex conducted studies in 2020-21 which showed that 53% of businesses plan to optimize their office footprint due to the increased demand for greater employee flexibility and autonomy.

This profound and permanent shift in working preferences means businesses can now choose from a global talent pool to find skilled workers who otherwise might be in short supply locally. And with online collaboration established as the new normal, companies can easily engage international freelancers and contractors for shorter-term projects too. 

It’s clear that companies need to meet the changing needs of their employees wherever they work, even if that’s from the kitchen table. And in transitioning to a remote-first, global workforce, they must also facilitate seamless and cost-effective global payments to their talent no matter their location, even if it is across the world.

Managing Global Workforce Payroll at Scale

Taking advantage of a global talent pool means ensuring companies can make global payments to an international workforce in a way that’s efficient and less costly for all involved. While cost and efficiency are essential, so are timely payments.

Paying gig workers and contractors can strain business resources, particularly small and medium-sized enterprises (SMEs). Businesses that need to make international payments often struggle to navigate the complexities and compliance issues. While hiring international contractors offers many benefits, such as access to a global talent pool, cost savings, and flexibility, payment challenges can cause significant financial and operational problems. A few of these issues include:

Payroll Strategy for a Flexible Global Workforce  

Payroll management is one of the most critical aspects of managing a global workforce. Payroll strategy refers to the approach used to manage payroll, including how employees are paid, how taxes are handled, and how compliance with local laws and regulations is ensured. Developing an effective payroll strategy for a global workforce requires careful planning and consideration of various factors, including the specific needs of each country or region where employees are located. Based on changing workforce trends, an international payroll strategy is essential for organizations to reduce risk, increase compliance, and build a leading operating model.

While most organizations have formalized a payroll strategy, challenges persist. Payroll, flexible working policies and inaccurate employee data often impact multi-jurisdictional payroll withholdings and compliances.

Implement International Employee Payment Preferences

It’s one thing making cross-border payments to a global workforce, but individuals also expect to receive their wages not only in their local currency but also in a way that suits their lifestyle. Here are two ways to ensure your company is encompassing a change of mindset to pay and retain global workers.

1. Prepaid or virtual cards for the gig economy and unbanked workers:  

The disbursement problems of the gig economy can be solved with prepaid or virtual cards as an alternative to direct bank transfers. 

Uber’s ‘Instant Pay’, allows drivers to access some of their earnings via a debit card instantly. Satisfied drivers are loyal, and improved employee retention mitigates the cost of re-hiring talent: win, win. Even better, card-based cross-border payments allow unbanked workers to receive their wages and all employees to access their earnings wherever they are.

 2. Automate payroll processes to pay a global workforce

With new ways of working and the geographical expansion of the workforce comes the increased complexity of payroll management. But there are solutions; delays and errors can be avoided by minimizing human intervention and repetitive processes with a modern, automated payroll system.

With the never-ending changes, upgrades and cloud-based could be a worthwhile investment for many organizations with newly upgraded payroll systems or by simply partnering with a global payroll platform.

How Can Nium Help Global Payroll Platforms?

In the office or remote, at home or abroad, domestically or internationally – Nium makes international expansion seamless for global payroll platforms by paying people in a way that works for them. Pay to accounts, cards, or wallets while saving on foreign exchange and avoiding delays, and fees. Nium enables global payroll platforms to pay gig workers and employees in their local currencies while also managing compliance with local laws and regulations related to payment processing.

Overall, Nium offers competitive foreign exchange rates, ensures built-in compliance, enables real-time payments, provides robust security offerings, eliminates deductions, and offers extensive market coverage. This entails ensuring transaction transparency, including status updates, validations, access to data, reporting, and notifications; integration with existing systems and networks; and global service to ensure the same experience across local time zones for the entire workforce where everyone gets paid on time in the way that they want.

To learn more about how you can enjoy the value of a truly modern payment system, download Nium’s latest ebook: Payroll Goes Global: Optimizing Workforce Payments for International Businesses, or contact us here.