As companies go global, payroll is shifting from being a behind-the-scenes administrative task into a powerful strategic function. Aligning payroll governance and strategy with broader business goals helps your company improve its operational efficiency, ensure compliance, reduce costs, and minimize risks.
In other words, payroll is being used as a foundation to grow, adapt, and thrive in every corner of the world. So how can you adapt your own global payroll strategy?
We’ve gathered together expert insights and practical tips to answer this question. In this article, you’ll hear from:
- Sagar Khatri, Co-Founder and CEO at Multiplier
- Ian Giles, Global Payroll and People Leader
- Michael Nierstedt, Payroll Product Director at Multiplier
- Natalie Lloyd, Global Customer Success Manager at JGA Recruitment Group
What is a payroll strategy?
A payroll strategy is a blueprint for managing payroll and defines how your business handles payroll processes, systems, and partnerships in different locations. It provides a clear structure for all of your payroll operations.
In a global context, a payroll strategy governs how you manage payroll across multiple countries to ensure consistency, compliance, and efficiency. It might encompass automation, centralized data, and insightful reports. The ultimate goal? To transform payroll from an administrative function into a strategic driver of business.
A well-defined global payroll strategy ensures that payroll and payroll planning supports wider business goals, providing the C-suite with the insights needed to support its place within the global landscape. Giles puts it simply: “Payroll isn’t just about paying employees. It’s about building trust, ensuring compliance, and supporting the overall health of your organization.”
The benefits of an effective payroll strategy
Not only does an effective payroll strategy help you achieve your payroll goals, but it also helps you make payroll a key driver of business success.
Your business can save time and resources by automating routine tasks and using data to stay a step ahead when it comes to decision-making. As Khatri says, “It’s surprising how many companies can’t forecast payroll costs, understand payroll costs three months from now, or dissect costs at the department level.”
Let’s take a closer look…
Improved compliance
63% of payroll professionals admit that compliance is their biggest challenge when it comes to managing global payroll. A unified payroll strategy reduces compliance risks by centralizing data and automating regulatory updates, helping you stay on top of changing regulations and pay frequencies in every country your business operates.
Reduced costs
Almost a third of payroll professionals cite managing multiple vendors as one of their main challenges. A strong global payroll strategy minimizes the complexity and costs involved with managing multiple payroll vendors by consolidating payroll operations and reducing the need for manual data entry and reconciliation with automation.
Data-driven insights for the whole business
A well-executed payroll strategy helps you transform payroll data into a powerful decision-making tool that benefits the entire organization.
Payroll isn’t just an employee database that helps you pay employees — it’s a rich source of information that, when combined with data from finance, HR, and other business functions, provides a comprehensive view of workforce costs and trends. It can help you craft competitive compensation packages, forecast future labor needs, and meet ever-increasing pay transparency legislation such as the EU Pay Transparency Directive.
Enhanced global consistency
Centralized systems and processes allow you to enforce consistency and accuracy in global payroll management. By standardizing policies and procedures, you can ensure accurate and on-time payments and meet all local compliance regulations.
This is especially prudent when employees work in regions with complex regulatory rules. As Nierdstet explains “When you’re using too many local providers, international employees can suffer from a second-class payroll experience.”
What are the key elements of a global payroll strategy?
A well-defined global payroll strategy ensures efficiency, compliance, and a great employee experience across every region where your business operates. Here, we’ll dive into the key components.
The right tools
A strong global payroll strategy helps control costs by reducing administrative overhead and minimizing errors. Speaking on what businesses need (and want!) in terms of efficiency, Giles says, “There’s a pressure to reduce costs, and companies are looking for consolidated platforms with automation and really strong integrations so all data is correct.”
Managing payroll can be a major time sink for global businesses, especially when dealing with complex processes across multiple countries. That’s where automation steps in, to take over repetitive tasks and free up valuable time for your team.
Technology can monitor and implement your payroll strategy, handling everything from tax calculations to benefits administration without constant manual input. The right tools also ensure data security – a critical concern as you expand across borders.
But integrations are equally important. Without connecting payroll data to other business systems, companies miss the bigger picture, leaving them with a disjointed view of labor costs (such as accrued payroll) and overall financial health. As Khatri puts it, “Payroll goes into accounting, performance management, employee storage — and it should all be integrated.”
Compliance
With unique tax laws, social security requirements, and labor regulations, maintaining compliance across multiple countries is one of the biggest global payroll challenges. And that’s why many businesses turn to hiring multiple payroll partners — one for each country they operate in — to manage operations.
Nierstedt recognizes how a talent shortage is also fueling this trend: “We’re experiencing a huge talent shortage in payroll. So, partnerships and consultants are becoming more important and the technology you choose is becoming one of the most important decisions you can make.”
However, for a global payroll strategy to be truly effective, a centralized system is essential. Relying on a fragmented payroll model — where businesses use separate systems and processes for each different region — creates complexity, increases the risk of errors, and makes it difficult to maintain global oversight.
Instead, a centralized global payroll system provides global access, ensures compliance with both local and international regulations, and offers comprehensive reporting functionality.
Pay transparency
A strong payroll strategy puts pay transparency front and center — not just as a way to meet local laws, but as a tool for shaping fair, competitive, and data-driven compensation practices. Clear, accessible pay data helps businesses establish consistent, equitable pay structures across global markets while accounting for local nuances and avoiding pay compression.
Nierstedt also sees enormous potential for companies to achieve better benchmarking for pay transparency, which can be supported with better systems: “There’s just so much opportunity to provide better benchmarking, not just within a company, but across many companies, to figure out what the correct pay benchmarks are.”
This kind of benchmarking is a key part of any global payroll strategy. By using payroll data to compare compensation across regions, industries, and roles, businesses can identify pay disparities, close wage gaps, and offer competitive salaries that attract top talent.
Lloyd supports this, emphasizing that unified compensation principles ensure equity throughout the world. She says, “This ensures consistency and fairness across all markets, reinforcing the company’s commitment to pay equity.” However, she also stresses the need to adapt strategies to local contexts, explaining, “Global strategies balance transparency with flexibility, supported by centralized compensation policies and localized execution.”
Evaluating payroll strategy success
Establishing a payroll strategy is not a one-and-done exercise. Monitoring performance regularly at audit enables you to adjust and optimize your payroll processes, ensuring they stay on track with broader company goals.
But, despite the importance of evaluating your payroll strategy, many businesses still struggle to measure its success. According to a recent survey, 41% of respondents admitted they do not track global payroll performance against objectives.
One of the first steps in evaluating success is defining clear payroll strategy objectives from the start — and these should include reducing costs, ensuring compliance, or boosting your overall business goals. The sooner these are in place, the sooner you can begin to measure the effectiveness of your strategy against them.
To evaluate success, regularly review KPIs and metrics such as payroll accuracy, processing time, and compliance with local tax laws.
Automated payroll systems make this task easier by identifying issues before they become problems. For example, payroll reports and dashboards easily track error rates and delays in payroll processing to help you pinpoint areas for improvement.
Take control of global payroll with Multiplier
When it comes to managing a global payroll strategy, companies need strategic payroll solutions that can integrate both in-house and outsourced payroll operations.
Multiplier provides a comprehensive platform designed to simplify global payroll management with flawless integrations, easy automation, and amazing reporting functionality. As Khatri says, “Multiplier has a beautiful dashboard with reporting capabilities. The CEO has a view, the CFO has a view, and you can slice and dice to look at data from any perspective.”
Let Multiplier help you enact a more efficient payroll strategy. Book a demo today.
FAQs
Q. How can I align my payroll strategy with my company’s financial goals?
You can align your payroll strategy with your company’s financial goals by using data to forecast labor costs across different geographies, manage budgets, and inform strategic planning.
Q. What is payroll governance?
Payroll governance involves the best practices, frameworks, and systems that ensure compliance, accuracy, and consistency throughout payroll operations. It enables businesses to manage and minimize payroll risks and ensure compliance with relevant rules and regulations.
