Understanding the various regional complexities of payroll processing is not uppermost in most businesses’ agendas. Whether that refers to; local taxes, regional holiday pay, or national legislation regarding insurance, pension schemes, subsidies and the like, for most businesses this considerations are of little importance and seldomly feature in the boardroom. Payroll processing is rarely considered a mission critical activity and decisions regarding payroll are often made quickly and usually without strategic considerations.
But there is no margin for error when it comes to payroll processing. It has to be done correctly. Employees rely on their wages and any mistakes have significant consequences, including legal action, reputational damage, excessive employee turnover and consequently high recruitment and training costs.
Many rely on large payroll processing firms to handle these complexities and while that may make sense for international firms for local businesses this simply isn’t the case. The reason why it doesn’t make sense for local businesses is partly due to the level of outsourcing that happens within the industry. For instance, many international payroll providers will outsource local payroll processing work to a preferred payroll partner in that area. For instance a Manchester based business utilising a multinational payroll provider may find that their payroll service is in fact being processed by a Local Payroll Service in Manchester (such as Paycheck Plus).
From the point of view of the multinational payroll provider the rationale behind this is simple. Local payroll providers will be better aware of their country’s government’s guidelines. For instance a UK payroll service will be better aware of UK legislation (Such as Payroll Auto Enrolment requirements), while an Irish Payroll Service will be more aware of Irish legislative requirements, such as PAYE modernisation or Payroll Incentive Schemes such as the Small Benefit Scheme).
Consequently, it is often the case that businesses who choose to work with an international firm are in fact dealing with a local firm but at considerable extra expense and at a step-removed. Cutting out this intermediary and dealing directly with a local payroll provider makes operational and financial sense.
With a local payroll provider businesses benefit from a better understanding of local and national legislation, more direct lines of communication, improved cost-efficiencies as well as easier and faster setup.