Why payroll scalability & flexibility are key to business growth
New markets. Fresh revenue streams. High returns on reinvestment. Revitalized product development. “Going global” is a strategic manoeuvre opening the next chapter for many organizations seizing the moment to expand their global footprint…expanding businesses should remember growth is a marathon, not a sprint.
All businesses pursue the common objectives of revenue, profit and growth, but the most crucial influence on achieving your goals is your ability to scale and flex based on market conditions. Translation: that means your payroll and HR needs to be able to scale and flex too.
Consider 3 of the different ways organisations typically grow:
Organic growth usually means hiring more employees, including more payroll staff to deal with the extra work. More employees. More payslips. It’s all fine, if your payroll software can cope.
Growth by acquisition is rarely plain sailing. New staff come on board. Salary discrepancies arise. Benefits vary. So do allowances. And the biggest problem of all? Different payroll systems. Even with the best data mapping and integration, you can still face problems with out-of-date data or security issues from systems with different rules.
New problems arise when you expand into new, international territories. Conjure in your mind a spider’s web of different tax legislations, labour and employment laws, and language and cultural differences.
Workforce costs could account for up to 60% of the total business cost, but less than 30% of the financial leaders consider payroll data when developing their growth strategies.
Is your payroll ready to scale with you?
Growing your business without knowing how you’re going to pay your new employees is never a good idea. Struggling to run payroll on an inadequate system can lead to stressed payroll supervisors, mistakes, wasted time, disgruntled employees and compliance issues.
Workforce costs for some businesses can account for up to 60% of total business costs, yet ADP’s research shows only 27% of financial leaders consider payroll data when developing their commercial and growth strategies.
Nearly a third (30%) of finance and HR leaders are not confident that their payroll system can support their plans for growth or geographical expansion.
Inability to work real time based on a single source of truth forces multinational organisations into spiralling costs associated with multiple systems’ compliance, operational vulnerabilities related to resource effort required, and inability to scale to meet mid-term business requirements and future growth strategies.
ADP’s research overwhelmingly shows the majority of businesses (70%) believe their payroll is unprepared for future disruption or major regulatory change, while just over half (51%) currently have limited confidence in their payroll compliance.
“Payroll is more important than people think to growth strategy. Managing workforce costs is core to both employee retention and your ability to scale,” said John Antos, VP of Strategy, ADP.
“Optimised, agile payroll and HR systems can provide real value to business continuity, help reduce risks of losing top talent and aid modelling future workforce operational scenarios for growth while managing the bottom line,” he said.
Reduce international compliance risks
Outsourcing payroll reduces the risk and the burden of dealing with payroll in a growing company. Outsourced payroll providers can help with local tax reporting, regulatory compliance, data security and unemployment claims.
Save time, money and the hassle of staying up-to-speed on complex compliance requirements in each country. Not having to spend long hours on administrative work affords you the ability to focus on business growth initiatives, and improved accuracy can prevent costly penalties. Flexible pay options and self-service apps can also help improve employee satisfaction.
Scale and flex based on your business needs
Outsourcing can be tailored to suit your needs and budget, now and future-forward. Cloud-based solutions provide the option to scale up or down, add new technology and make it easier to share information.
As your needs grow, payroll service providers like ADP can also help with additional services such as treasury service, expatriate payroll, and reporting and analytics.
If you’re looking for growth, integrating your HRIS and payroll data means you can carry out anything from gender pay gap reporting to skills gap analyses and make the right choices for your future.
Finding the right provider for a cloud-based payroll solution should give you all the scalability and flexibility you need. What you do with that flexibility is up to you.
The pandemic had an unexpected silver lining – thrusting HR leaders to the forefront of business strategy. It’s the perfect opportunity to completely rethink how you approach your payroll to proactively drive business growth.
Find out more about optimising payroll for your business.