Digital and social disruption are fundamentally transforming all aspects of a company’s business. Traditional payroll service and delivery is no exception: globalization, increased legislation and the accelerated advancements of digital technology are among the most strident forces propelling multinational and global organizations to reimagine their payroll operations.
Many companies are seeking to expand their global footprint to chase new revenue streams. This has payroll implications that companies need to consider as part of any exploratory process. As companies become more global, however, the need for greater compliance and standardization across jurisdictions becomes more acute.
Meanwhile, legislation around the globe grows increasingly fragmented and complex. Governments contending with a perfect storm of declining revenues and rising costs of aging populations are pursuing more aggressive means of payroll tax collection, thanks to the advances of digital technologies. Digital technologies also lie behind the stance by governments for greater regulatory transparency of personal data collection and greater scrutiny of data privacy protection.
In this summary of our third biennial edition of the EY Global Payroll Survey, we explore how these issues and others are impacting organizations, as well as the solutions they are using to address them. We also delve into the choices payroll providers are making to respond to the challenges their customers face.
1. Global expansion means prioritizing payroll earlier
Payroll is no longer seen as a risk, but rather as a risk mitigation tool. Payroll professionals can identify complexity, and provided that they are given advance notice, they can develop solutions to avoid legislative noncompliance and the associated penalties.
2. Companies are incrementally moving payroll back in-house
The number of companies with fully outsourced payroll service models has decreased by seven percentage points, from 26% in 2015 to 19% today.