Recent research shows an increase in the number of payroll professionals facing difficulties due to gaps in knowledge of legislation and local requirements. Inadequate internal systems also pose a significant challenge.
Lack of knowledge of local regulations is the biggest challenge facing global and domestic payroll professionals, according to the latest industry trends report from the Global Payroll Association.
41% of global and payroll professionals in the country interviewed reported a 'lack of knowledge of local payroll legislation and requirements' - a 6% increase over 2016.
The most common reason for payroll errors - cited by 30.2% of respondents - was a failure of in-house professionals to understand local rules and regulations. This is understandable considering that only a third of respondents (29.6%) claimed to be responsible for obtaining local pay compliance information, but often did not know where to find it.
Deborah Williams, Global Head of Service Lines, said: "The payroll industry is doing an extraordinary job, even though it faces ever more complex rules and regulations. However, the lack of local knowledge is a cause for concern as it has potential repercussions on compliance. Ultimately, this can affect payroll and business performance. "
"It is encouraging to see that four in five (79.3%) payroll professionals value having a contact in the country - as in our case - that speaks the local language to help them communicate more effectively."
Other survey results include an alarmingly high number of seven in 10 payroll professionals (69.4%) claiming to have no or less than 50% of the overall policies applicable to all payrolls. A similar pattern emerged in the case of processes.
Deborah Williams added, "The lack of consistency and control resulting from not having strong payroll policies and processes in place should be of concern to organizations operating in multiple jurisdictions as this leads to payroll processing errors and increases the risk of non-compliance ".
"Our report with GPA also shows that many organizations have not yet adopted the right technology to support their payroll operations on an international scale, which contributes to the failure of policies and processes."
"There is a growing trend among organizations to adopt middleware to solve the problem of trying to deal with many systems and vendors in different territories. We currently see many organizations turning to payroll outsourcing to meet those needs. "
Melanie Pizzey, CEO of the Global Payroll Association commented: "Our second annual survey with the TMF Group indicates that payroll professionals in many countries face greater complexities on many fronts. Consequently, the transformation of the overall payroll is - or will become - a priority for employers, so they can gain consistency in their overall operations and maximize the return on their investments. "
The four major challenges faced by global payroll professionals and in the country: