Besides the dollars and cents that get transferred between bank accounts, payroll processing is rife with detailed information that can be used to make faster, more effective business decisions.
And global employers can use this data to gain a significant advantage—one just has to know the best way to use it.
What is payroll data, exactly?
Payroll data refers to all of the details behind your payroll, including every bit of information collected during processing.
Different types of payroll data include:
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Employee demographics
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Labor hours and overtime
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Salary and compensation figures
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Use of employee benefits
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Tax withholdings
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Payroll processing costs
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Job code changes (labor utilization)
Combining and analyzing payroll data in different ways can show you current trends and predict the future direction of things like:
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Hours worked by department
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Distribution of overtime
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Average pay rates by function
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Payroll burden by geography
How multinationals should be using payroll data
How many meetings or conversations have you had about the cost of your payroll or the distribution of overtime in the company?
These discussions are usually fueled by best guesses and generalizations. Payroll employees manually run some reports, spend time digging through them, then collate a few data sets to pass around.
In other words, you put a lot of time and effort into coming up with marginal data sets that often produce mediocre insights—and therefore mediocre results.
Payroll automation and payroll analytics offer new capabilities that make payroll data a whole lot more accurate, accessible and useful. With the right technology in place, your payroll data comes in from a variety of sources, is qualified for accuracy and is aggregated into a single, ready-to-analyze output.
This puts past, present and future views of your data right at your fingertips, in real-time.
And that opens the door to big opportunities for multinational employers to use payroll data for compliance, strategy, and human resources.
1. Using payroll data to improve compliance
Compliance is the number one thing on many global executives’ minds. It’s a common (and sometimes costly) sticking point, clouded in confusion, thanks to rules that often change for every country, state or region.
Clean payroll data, standardized around the globe, is a game-changer for compliance. Yet more than one-quarter of multinational companies report virtually non-existent global payroll standardization, and up to three-quarters of companies are struggling to implement some form of standardization.
Better quality data in your payroll up-streams means fewer payroll errors and more efficiency in processing payroll. Accurate, automated payroll data can put a stop to common problems like off-cycle payments, corrections, and calculation errors when working with different currencies. And with fewer errors, the associated costs of missed deadlines and extra labor level off, as well.
2. Payroll data for global business decisions
Access to insights via payroll data helps global leaders make better, faster decisions about the business’ strategy. Without having to crunch numbers in Excel, analyze a bunch of different data sets, or even qualify the accuracy of the numbers.
You can use payroll data to inform workforce planning decisions, like whether it is cost-effective to employ contingent workers in different locales. Similarly, you could compare actual benefit costs to projections for many different areas to see where the most cost-effective opportunities are for expansion.
A quick look at the payroll data modeling can also flag potential problems in real-time, allowing your business to react and correct problems quickly.
For example, let’s pretend a manufacturer sees a spike in overtime hours at a specific facility. This can trigger an investigation into the root cause with a same-day turnaround. Instead of losing two weeks' worth of productivity, the issue can be discovered and addressed in as little as a single shift.
3. Improve recruitment and retention—proactively
Talent has always been a very subjective area in business, chock full of feelings and emotions. Payroll data provides a new lens through which to understand the dynamics of attracting and retaining employees.
Multinational employers can use payroll data to provide a snapshot of salary, worker demographics, length of employment, benefits and more to uncover employment trends across the company's global footprint. Then, you can connect talent trends to local cultures, allowing you to make effective decisions regarding pay, benefits and other offerings that directly feed into talent recruitment and retention in specific locales.
For example, this data can feed predictive modeling to show you how a small salary increase might affect employee retention in different regions. Or maybe better maternity benefits would help you to attract the talent you’re looking for in another region.
Using payroll data to uncover these insights puts time on your side. Your company can proactively work to keep employees happy and engaged or react to problems in the moment—instead of months after retention rates start to plummet.
Make payroll data a competitive advantage
Payroll data has been around in one form or another for decades. The difference now is that standardization and automation has made the data more timely, accurate and accessible.
And speedy, accurate insights from your payroll data can mean the difference between snagging a big opportunity and completely missing out. They can mean the difference between nailing all the local payroll regulations or racking up a steep amount compliance fines. And they can mean the difference between keeping or losing good employees.
So, are you using your payroll data to your full advantage?
Learn how Payroll 360 can provide you with a centralized view of your global data, equipping you with the insights needed to get ahead and stay ahead.
