• Jamie Haerewa, Managing Director at Agile HRO


• 16.02.2023 10:45 am
#fintech

As companies continue to expand their reach across the globe, navigating the complexities of international payroll has become a daunting task. From currency fluctuations to navigating diverse employment laws, the challenges of paying employees in different countries can seem never-ending. But with the rise of fintech, the global payroll maze may finally have a solution.

Fintech has revolutionised the financial industry with its innovative solutions, and the world of payroll is no exception. With cutting-edge technology and streamlined processes, fintech companies are providing businesses with the tools they need to navigate the global payroll landscape with ease.

So how can fintech help businesses navigate the global payroll maze and get the most out of their payroll process? Jamie Herewa, Managing Director of Agile HRO, explores…

Challenges of Global Payroll Management

Before delving into the specifics of global payroll, let’s take a step back and discuss the unique challenges businesses face when managing payroll for employees in multiple countries. These include:

• Compliance with local laws and regulations: Different countries have different laws and regulations surrounding payroll, making it challenging for businesses to ensure they comply with all the relevant requirements.

• Currency conversion and exchange rate fluctuations: Companies need to consider currency conversion and fluctuations, which can impact the accuracy of their payroll and the amount of money their employees receive.

• Managing a remote workforce: With the rise of remote work, companies need to have a flexible payroll system that can accommodate employees working from different locations. This includes ensuring accurate time tracking, calculating different tax rates, and dealing with different time zones.

How Can Fintech Help?

Fintech has the potential to revolutionise the way companies manage their global payroll by making the process faster, more efficient, and more secure. Here are a few ways fintech can help:

Crypto Payroll

In recent years, there has been a growing demand for digital and crypto payroll solutions as more employees seek to receive their wages in digital assets. In fact, according to research by SoFi, a staggering 36% of workers want the option to receive at least part of their salary in cryptocurrency.

It's not just everyday employees looking for this option either. High-profile individuals like former Seattle Seahawk Russell Okung, musicians Mel B and 50 Cent, and even politicians like Miami Mayor Francis Suarez have made headlines for opting to receive part of their salary in Bitcoin. This trend shows that the demand for digital and crypto payroll solutions is not just a passing fad but a real and growing trend.

Fintech companies are capitalising on this demand by offering innovative solutions that allow employees to receive their wages securely and efficiently. This simplifies employee payroll processes and positions businesses at the forefront of the digital revolution. 

However, it’s important to note that this is still a nascent technology, and there are some risks associated with using digital assets for payroll. To mitigate these risks and ensure a smooth transition, consider taking a hybrid approach to payroll and allowing employees to receive part of their salary in digital assets and the rest in traditional currency.

Payroll Automation and Integrations

Automated payroll processes have become increasingly popular in recent years, particularly with the rise of fintech solutions. The main advantage of these solutions is their ability to streamline payroll processing and make it more efficient. They can process payroll for multiple employees in multiple countries with minimal effort and help reduce errors.

However, it's important to remember that while automated payroll processes can offer significant benefits, they may not be suitable for all businesses. For example, businesses with very specific payroll requirements or prefer a more hands-on approach may find that these solutions are not the best fit for their needs.

Compliance tools

One of the main challenges with managing global payroll is ensuring compliance with local laws and regulations. Fintech companies have developed tools that can help businesses stay compliant, regardless of where their employees are located.

These tools often include features such as automatic tax calculations and withholding, currency conversion, and reporting to ensure compliance with local requirements. They also offer additional features such as real-time tracking of payroll expenses, alerts when employees exceed set thresholds, and comprehensive reporting to provide businesses with an overview of their finances.

Final Thoughts

As we've seen, the world of payroll management is rapidly evolving and becoming more digital every day. With fintech solutions leading the way, businesses can streamline their payroll processes, offer new and innovative ways of paying employees and stay ahead of the curve in the increasingly digital world.

But, as with any new technology, there are challenges to be addressed before digital and crypto payroll solutions become the norm. If you're thinking of making the switch, here are some key takeaways to help you make the most of your fintech solution:

• Thoroughly research fintech solutions.

• Ensure seamless integration with existing payroll systems.

• Focus on data accuracy.

• Prioritise security.

By following these best practices, you can ensure a successful implementation of a fintech solution for your payroll process and take advantage of its benefits, including increased efficiency and accuracy.