How to keep payroll compliant as business expands?

As businesses expand their workforce and enter new international markets, the challenge and importance of maintaining payroll compliance grows exponentially. It's not just a matter of ticking boxes for regulations; as our new research shows, it represents the largest investment in payroll management for many companies. Running closely behind is investing in fortifying payroll data security, a critical aspect given the sensitive nature of payroll information. These investments are foundational to safeguarding your company against financial penalties and safeguarding employee data against breaches. 

What the data reveals 

As companies grow, particularly beyond the 500-employee mark, the ratio of payroll staff to employees often shifts dramatically. This shift can potentially amplify workloads and introduce compliance risks if not handled properly. HR leaders must recognize these changes and plan accordingly - whether it's beefing up the team, integrating cutting-edge software solutions, or seeking external support, proactive planning is key to mitigating risks and ensuring compliance amidst payroll complexity. 

Beyond technology, investing in comprehensive compliance support is crucial. This includes ongoing training for payroll staff – investment undertaken by one in every four employers, according to our findings.  Additionally, seeking counsel from compliance and legal experts, and possibly engaging specialized advisors for international laws, is imperative. These steps ensure that compliance is integrated into the payroll process, not merely an afterthought. 

When compliance calls for change  

For many companies, achieving true payroll compliance calls for systemic shifts. This may involve restructuring the payroll department, integrating new roles that focus solely on compliance, or even changing the company culture to prioritize compliance at all levels. Such systemic changes help embed compliance into the fabric of everyday operations. 

As businesses expand internationally, consolidating payroll functions with fewer, more capable partners can streamline operations and enhance compliance.  Opting for partners capable of navigating multi-country payroll under diverse regulations can lead to streamlined processes, cost efficiencies, and clearer communication channels. 

Future-proofing payroll compliance  

It's particularly important to recognize the pivotal role that Artificial intelligence (AI) plays in modern payroll compliance, especially when it comes to monitoring legislation and implementing necessary changes. As our research reveals, this is currently the most common reason why AI is used for payroll management. Right now, AI enables automated updates to payroll systems when new laws come into effect, ensuring compliance without manual intervention. Future applications may include predictive compliance analytics, which could foresee potential compliance violations before they occur. 

Scalable payroll compliance  

For HR leaders, scalability in payroll compliance hinges on three key strategies: 

• Continuous Learning: Encourage ongoing education in compliance-related developments, particularly in international contexts. 
• Technology Leverage: Harness the power of AI and robust payroll systems to automate and streamline compliance processes. 
• Strong Partnerships: Cultivate relationships with external experts who can provide insights and support on compliance matters across different jurisdictions.