Having a stable payroll process that you can be confident in is the foundation of running a successful business, but lately this has become a lot more complicated.
With a financial landscape that is changing rapidly, it's difficult for even financial specialists to feel prepared for the year ahead. From Brexit to Trump's tax reform and the ongoing threat of data security highlighted by the General Data Protection Regulation (GDPR) that will soon come into force, there's plenty of uncertainty that will affect businesses of all sizes.
Here are four issues that will affect how companies conduct their payroll and how you can prepare your business for them:
1. Data Protection
Data security has been an issue that has refused to go away and for good reason. Phishing scams and professional hackers have put increased scrutiny on payroll practices. For those operating in Europe, the approaching deadline of GDPR will be the most significant legislation affecting them in 2018. All companies need to ensure they are compliant before May 25th 2018 and that the way they collect, store and delete information meets the required standards.
As well as regulating how businesses treat data from their customers, it also sets out requirements for how employee personal information is collected, deleted and stored. This means all companies need to ensure their payroll data is protected and that the right measures are in place to do so.
2. Gender pay gap
Although Gender Pay Reporting only applies to companies with at least 250 employees, even smaller businesses are likely to see an increased pressure to ensure there is diversity in their workforce. Payrollers need to be aware of how diverse their top-level and senior positions are and work with recruitment specialists and decision makers about what steps may need to be taken. It's important that this is a primary concern for all businesses when approaching promotions, development plans, and hiring new staff.
3. Global uncertainty
There are a lot of reasons for financial experts to be uncertain at the moment. President Trump's tax reform has moved the goalposts for many US businesses, while Brexit and GDPR is affecting the majority of Europe. Poor activity in the stock market has been caused by forecasts that central banks will hike up interest rates, which has pushed doubt into the minds of many business leaders. Geopolitical instability is perhaps the biggest challenge facing organizations, and there is very little individuals can do to safeguard against any potential backlash.
The global uncertainty can make it difficult for businesses of all sizes to make accurate forecasts for the future, as there are a lot of factors outside of their control. For example, UK-based and European-wide companies are tentative about making any large financial commitments before a strategy for Brexit is made clearer, while businesses in the US wait to see how President Trump's tax reform will impact them. The decreased corporation tax should be welcome news to many but economists are largely divided about what the long-term result of the tax reform will be.
An enterprise-wide payroll continues to be a significant challenge for organizations around the world but with globalization becoming an even more critical component, having a scalable payroll has become essential.
It's something that multinational companies have had to do for a long time, as paying employees in different time zones with the same accuracy and efficiency is a crucial part of their business model. But for smaller businesses it's a battle they are still fighting. The move to a decentralized model raises new challenges for companies, including finding the right balance of automation, integration, and ensuring there is visibility across the entire enterprise.