If you’re shopping for an international payroll provider, you’ll quickly find there are a lot of choices out there. And everyone seems to be offering something a little different. It’s easy to get mired down in the combinations of tools, technologies and a la carte menu items—all claiming to help you efficiently pay your employees.
How do you create a shortlist of the best international payroll providers? And how do you figure out which will be the best provider for you?
The first step is understanding what kind of payroll provider you need. There are three primary types of international payroll providers, and the best one for you will depend on your unique situation.
3 types of global payroll providers
Let’s break down what we’re actually looking at with international payroll providers. It’s easy to get lost in the acronyms, but it really boils down to three main types:
- Companies that specialize in providing payroll technology
- Providers that focus solely on providing international payroll services
- Providers that pair payroll services with supplemental HR services, called HRO providers
Payroll technology providers
Technology providers offer payroll platform technology or Human Capital Management (HCM) software that can manage payroll processing, tax filing, garnishments and end-of-year reporting in one convenient place.
Pros of payroll technology providers:
- Technology providers make an easy choice for agile midsize companies who are already embracing data-driven business models. When it comes to sharing, analyzing and reporting global payroll information in real-time, there is no substitute for solid technology.
Cons of tech providers:
- Technology implementations, migrations and upgrades can be complex and time-consuming. These platforms don’t always account for how frequent updates may impact their clients.
- You must have a robust IT infrastructure in place to support the use of technology platforms in your business. Otherwise, the tools may end up being a big expense that isn’t fully utilized by your staff.
- These platforms typically offer limited multi-country coverage, which can make it difficult to fold new countries into your payroll operations.
- Tech providers specialize in technology, not payroll. Platform providers may offer little in the way of strategic advice or local expertise that you need to scale your business around the world.
- Most technology providers take the HCM approach and design complex software to cover all of your bases. That’s great if software is what you are looking for. But, if you are trying to keep your global payroll simple and streamlined, a complex system won’t do you any favors.
Global payroll services
Global payroll service providers cater to businesses of all sizes, offering fully managed or aggregated payroll processing services. The best international payroll providers offer a range of payroll services, up to fully managed outsourcing. Some may even offer extended HR services, and many are able to integrate with your HCM or HRIS technology.
Pros of global payroll providers:
- Payroll service providers unsurprisingly specialize in providing payroll services—not developing technology. These providers can offer valuable expertise when building and optimizing payroll strategies across multiple countries.
- Payroll compliance is a big deal, and it only gets more complicated as your company expands your global workforce across new locales. If you need support to keep on top of local regulations and localized payroll, you will want to choose a global payroll service provider.
- Payroll providers offer the most flexibility for payroll services—without tacking on additional HR solutions. If easy and compliant payroll is your primary focus, it’s a no-brainer.
Cons of payroll providers:
- The focus is solely payroll—if you also need significant HR services, you may have to look elsewhere. But if you already have an HR partner or an in-house human resources function, a standalone payroll service provider may be perfect for your global footprint.
HRO stands for human resources outsourcing, and HRO providers offer a range of services that can meet the evolving needs of middle- and large-market enterprises. With these providers, payroll is a base service, and other services can be added a la carte to customize solutions.
Pros of HRO providers:
- HRO providers can be a great choice if your business needs a lot of custom HR support in addition to payroll services.
- HRO providers can help you to integrate a variety of services across HR and payroll with a single provider. The biggest issue is finding one that offers everything you need—you don’t want to end up with a dozen subcontracts driving up the cost and complexity.
Cons of HRO providers:
- With so many different companies offering varying services, it can be difficult to evaluate HRO providers against other HRO providers—and alternatives in the market. They don’t have a singular focus like payroll-only service providers, and their tools aren’t as comprehensive as those from technology providers.
A hybrid approach to global payroll
While there are three primary types of global payroll providers, you aren’t limited to a single choice.
Sometimes the best international payroll solution is a hybrid approach.
Many multinational companies choose to implement an HCM or HRIS, while also partnering with a global payroll services provider. These providers fill gaps in countries that many technologies do not cover. They also offer valuable local expertise that tech companies cannot, helping to ensure compliance.
In the hybrid approach to payroll, companies integrate their HCM/HRIS with a global payroll provider to take advantage of both technological functionalities, as well as breadth and depth of payroll expertise.
For example, let’s say you use (or are implementing) an HCM, but it only supports payroll in a handful of countries. But you have to pay workers in 10 countries. You can choose a global payroll services provider to integrate with your HCM and process payroll in all 10 countries. Now, you can access and use all of your payroll data across all 10 countries right in one cohesive platform.
Weigh all of your payroll options against scalability
Getting set up with a payroll provider is going to be a big undertaking, regardless of which avenue you take. You don’t want to find yourself evaluating options again anytime soon. A new global payroll implementation is a big project to tackle. To find the best international payroll provider for your business now, make sure this partner can scale with you in the future.
- If you are going with a technology provider, you’ll want to ask around about custom builds and evaluate how much your company will have to adapt to use the software.
- For payroll providers, focus on geographic service areas to ensure that they will be able to meet your needs wherever you decide to grow.
- And for HROs, take a close look at aligning your growth goals with their service offerings to avoid switching providers again.
Which is the best international payroll provider for you?
If you’re having a difficult time comparing apples to oranges, we get it. There are many different iterations of payroll providers, and the options can be as diverse as the countries they operate in. It makes it challenging to choose the right service from the get-go.
You need more than simply competent service—you need great service that fits your company’s current needs and can help you reach your long-term goals. The best international payroll provider for your business is the option that meets those needs, while also ensuring accuracy, timeliness and compliance.
If you still need help evaluating your options, we’ve got you covered—speak to one of our global payroll experts today.