Suppose an employee in France or Belgium has 3 days of educational leave, but on the second day, they go down with Covid. No software can automatically translate such a situation to your payroll correctly.
Multi-country payroll partners: what (not) to look for?
Payroll in Europe has become notoriously complex, making it nearly impossible to maintain a flawless multi-country payroll for your international workforce. Outsourcing partners line up to offer you peace of mind. But how do you know which one is the perfect match for you? Look at these three considerations and decide for yourself.
#1 Payroll software can’t work miracles
Some classic cars from the 60s and 70s are engraved in the memories of petrolheads. Not just because they look great, but mainly because of their superior engine. A flat-six engine, a Colombo V12 or a thumping all-American V8, to name only a few. Car manufacturers actively played the engine card to distinguish themselves. Today, however, just about every engine on the market is reliable and technically sound. So, people no longer focus on what’s under the hood. It simply doesn’t matter anymore.
The same has happened in the payroll industry. The days when a powerful, fancy payroll engine was a genuine gamechanger are long gone. All vendors now offer similar payroll software to process large numbers of payslips in a matter of minutes. But what none of these industrialised digital processes can do? Deal with extraordinary employee situations. That’s where tech fails and the engine sputters. In other words, payroll software with 100% built-in compliance doesn’t exist – not even if you opt for a Ferrari-style payroll engine.
Tip: choose a payroll partner who can switch engines
Why go for a fancy one-size-fits-all solution if you can get an equally reliable payroll engine that’s exactly right for your company size, industry and objectives? SD Worx offers own (and 3rd party) IP payroll engines for all your European teams, whether it’s a one-man band in Austria or a large unit in the UK. Each team’s payroll will run on a fit-for-purpose engine
#2 Local payroll expertise is more important than ever
Although the Payroll Proficiency Index shows that mainly companies in France, Belgium and Germany struggle with their payroll-related duties, rising payroll complexity is a trend across the whole of Europe. New rules and regulations pop up all the time, while existing ones are rarely revoked. The outcome: it takes a lot of local expertise to keep up with legislation. Obviously, that’s one of the main reasons why multi-country payroll is generally outsourced, but even outsourcing partners themselves barely survive in the swamp of legal exceptions, special tax deductions, union rules and whatnot.
Long story short, pick a payroll partner with boots on the ground – literally. Local experts who know their way around collective labour agreements, excel in taxation and social security, and say to which financial incentives you’re entitled, among other things. To refer back to the car metaphor: local payroll expertise makes sure you steer in the right direction, brake when necessary and accelerate from time to time. A smooth driving experience beats a loud engine.
Legal compliance doesn’t depend on the right technology, but on the right local expertise.
Tip: choose a payroll partner who has its own local teams
Multi-country payroll partners who rely on external organisations for their local expertise always constitute a risk. After all, chances are that they’re not always top of mind for those local organisations, meaning continuity, quality and stability are at stake. That’s why SD Worx created payroll teams of its own in 19 European countries – unique in the market.
#3 Payroll scalability and flexibility have become essential
If anything, these last few years have shown us that uncertainty is probably here to stay. Risks and opportunities alike can surface at any given time. You need to be able to quickly upscale or downscale your operations in various locations. And obviously, payroll handling should evolve simultaneously. You don’t want administrative and HR challenges to get in the way of your business strategy.
The simplest solution is to get one payroll partner for all countries within your operating radius. This not only results in a single point of contact and contract for your multi-country payroll, but also in increased scalability and flexibility. For example, starting up a payroll in a new country or expanding the service level in an existing location, will be undemanding. A (temporary) set-back? You won’t need to twist and turn to get out of contractual obligations. On the contrary, your payroll partner knows your company inside out and can think things through with you.
A single payroll partner in all your locations can become an ally for your business strategy.
Tip: start small and let your relationship grow
You don’t need to go all in straightaway with a multi-country partner. Start with one, two or three countries and see how it goes. The same goes for the service level. If your payroll runs smoothly, you can add services such as flexible remuneration, time registration or recruiting to the mix. You’re in the driver’s seat.
Director International Portfolio at SD Worx