Insights into global expansion & employee retention

Published: August 30, 2022

Global Payroll Solution Providers: How to Choose One

Global payroll solution providers aren’t new, but the industry has grown rapidly in response to the unprecedented growth in remote work. And it’s not just that there are now more providers than ever before: they’re also better because they’ve had to adapt and find innovative solutions to business challenges. Companies seeking to tap into the global talent pool are, in a sense, spoilt for choice.

So how do you choose the best global payroll solution provider for your needs? 

Let’s begin by comparing the two main models: aggregators and wholly-owned global payroll.

Global payroll solution providers: aggregator vs. wholly-owned

Global payroll is the process of paying a workforce that spans multiple countries or jurisdictions. Just like any payroll, it has to handle payments, deductions and benefits, and keep track of work hours. It also involves payments to relevant tax authorities, in line with regulations in each territory.

Global payroll solution providers are third-party organisations that provide these services for companies who wish to outsource them. These organisations exist to unify data from multiple sources and to bring their clients into full compliance in the countries where they hire. Now let’s consider the two main approaches to global payroll:

  • The aggregator model
  • The wholly-owned model

Global payroll aggregators

As the name suggests, this model coordinates service providers under one umbrella. Global payroll providers in this category engage in-country partners (ICPs) in foreign countries to handle payroll on behalf of the client.

Aggregators are also known as partner-dependent providers. The advantage of this model is that local ICPs compete to win contracts with the aggregator. This provides an incentive to improve performance. But there are also significant drawbacks.

If you partner with an aggregator, your relationship with vendors is not direct. This means that your highly sensitive payroll data is handled by third parties, potentially without your full oversight. It also makes it difficult for the client to add services, or make changes to existing ones because the contract exists between the aggregator and the vendor.

And while aggregators typically promise a single price and a single SLA, the reality is often a battery of contracts (and invoices) for different vendors. 

The wholly-owned model

In contrast, the wholly-owned model answers the need for centralized and standardized control. These providers own their own international employment infrastructure and personnel in all the countries where they operate.

This gives their clients access to all the legal expertise they need, under one roof, mediated by one SLA. And unlike the aggregator model, providers who own their own infrastructure have every incentive to keep their prices competitive. Here are some of the biggest names in the wholly-owned space:

This model represents a significant improvement over the partner-dependent model. But even among wholly-owned providers, each one has its own strengths and weaknesses. These are factors you need to weigh carefully before you make a decision.

Wholly-owned global payroll solution providers: key features and deal breakers

The size and nature of your business are the first factors to consider when setting up your global payroll solution. Equally important is the location (or locations) where you intend to start hiring new talent.

Each country has its own playbook when it comes to regulating relationships between its citizens and foreign companies. But beyond these company and country-specific factors, there are some common features to look out for when selecting a provider.

Customer service: anyone there?

Implementing a global payroll solution requires open and ongoing communication with your provider throughout the relationship. By its nature, payroll is dynamic: changing headcounts, staff relocations, promotions and increases.  

Our suggestion: research all potential providers to find out as much as you can about their customer service. Our customer service options available and responsive? Do they offer a single point of contact? Remember, one of the main strengths of a wholly-owned global payroll vendor is a streamlined, consolidated SLA.

Sluggish or inadequate customer service will probably be a deal breaker in the long term.

Integration or silos? 

Ideally, a global payroll solution should be able to integrate with your current HR and finance systems. Integration reduces manual input errors. That saves time and labour, but even more importantly, it goes a long way to improving employee satisfaction and engagement.

Inaccuracies or delays in payroll are a major source of frustration for employees. Another advantage of integrating all these data streams is that it enables accurate reporting and decision-making based on reliable information. 

Our suggestion: ask detailed questions about how the solution integrates with your systems. Limited integration capabilities are likely to add more complexity on top of the complexities you’re trying to solve.

Do they have the compliance superpowers you need to operate around the world? 

International hiring can be the force multiplier your company needs, but it also comes with significant responsibilities. Before hiring or contracting global talent, companies need to have a clear strategy in place to comply with local employment laws and tax regimes.

That’s one of the otherwise insoluble problems that global payroll solution providers exist to solve. So it’s vital that your provider can walk the walk when it comes to compliance. 

Our suggestion: make sure that the provider has a proven track record of managing the intricacies of employment regulations in the locations where you want to hire. Which countries are they able to cover? How do they handle sensitive payroll data?

Do they understand the intricacies of hiring in particularly well-regulated regions like the EU? 

Playroll gives you a headstart on global expansion

Through our fully-owned employment infrastructure spanning the world, Playroll offers a plug-and-play solution to your global payroll needs:

  1. Set up your account in minutes
  2. 2-step onboarding with pre-compliant contracts
  3. Use the cost calculator to forecast costs, tax and contributions, all before you advertise
  4. Press play!

With decades of experience building and managing remote teams, we know what it takes to build a global presence. We’re ready to help you build yours.

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