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Navigating compliant payroll management is tricky terrain — filled with ever-changing laws differing by jurisdiction and country. Failure to adequately comply can lead to punitive fines, reputational damages, and even legal repercussions.
According to a 2021 survey by ADP, 82 percent of the companies polled said the ongoing pandemic posed exceptional challenges in reliability and accessibility of payroll systems, accuracy, and timeliness of employee pay.
The new generation of payroll compliance is here. Is your Asia-Pacific company prepared? Check out these tips to future-proof your business against payroll challenges.
Get employee pay right
Entering center stage are employees – the number one asset for any company worth its salt. Prioritizing a fruitful employee experience and keeping them happy now determines continuity on the other side.
In a recent PANGEO panel titled, “Remote, Hybrid, or Office-Based: Key Trends Shaping the Future of Work in 2022 and Beyond,” experts discussed the absolute necessity of payroll compliance.
“Ensuring that your employees are paid accurately and on time is non-negotiable,” said Sachin Goklaney, Chief Commercial Officer, PayGroup.
Yet, according to a 2021 study by Ceridian, only 50 percent of APAC respondents said they were paid for overtime hours.
Additionally, the results revealed that employers struggle to build a positive employee experience —53 percent of employees said they wanted on-demand pay, reflecting a growing appetite for flexibility over finances.
Master multicountry payroll
As remote work continues to become a preferred choice, employers must match demand and understand how to compliantly pay workers regardless of their physical location.
“You have people working remotely all around the region, talking in a different payroll language and in different compliance terms — superannuation in Australia, central provident fund (CPF) in Singapore, and Jamsostek in Indonesia — then you mix in multiple currencies, multiple banking processes, and different cut-off times. That’s complex in itself when you’re sitting in a beautiful office environment, but now you’re sitting at your kitchen table,” continued Goklaney.
Don’t just think: Adopt digital
Goklaney emphasized that for successful digital adoption, a “people transformation” must enter the fold. Mindsets must shift and adapt to rely on technology to run core HR and payroll across multi-jurisdictions.
HR teams need to ditch manual processes and poor system integration to move toward a singular source of truth. Everything from payroll and recruiting to benefits and resource planning needs to be on one consolidated platform.
Piecemeal systems often require manual HR data entry and are less likely to transfer data back and forth seamlessly.
Creating a consistent employee experience on multiple platforms is tricky business. It’s also more costly and provides limited visibility on data — a dangerous trade-off when analytics are no longer a nice-to-have but a need-to-have.
Factor in the gig economy
Today, the gig economy has provided millions of lifelines that keep dismissed individuals afloat.
According to Payoneer, the five fastest-growing freelancing countries are in Asia-Pacific: The Philippines, India, Japan, Australia, and Hong Kong. Furthermore, the global gig economy is expected to hit USD 455.2 billion by 2023.
But gig workers don’t operate on a fixed salary. Accurately calculating their pay can be challenging, primarily when tracking hours worked.
“How much time did the person work? What is their timely rate? Did they have to work overtime because their internet crashed at home and they can’t access it? So they’re working at midnight — I’ve got to pay a different rate at midnight,” said Goklaney.
Employers must enact a robust crisis recovery plan that accommodates this burgeoning sector of employees and the payroll challenges that come with them.
The “no-choice” mantra
As employers enter the recovery phase where they rethink, restrategize, and reboot their companies from the inside out, Goklaney believes a pivotal step is to embrace a “no-choice” mentality, not only for HR teams but also for employees themselves.
In the past, people were averse and even nervous to adopt and adapt alongside technology, but there has been a significant shift in attitude in recent years.
According to Mckinsey, digital adoption in Asia-Pacific took a quantum leap, more so than in any other geographic area — a promising direction for a region that has already actively adopted digital banking.
Learn how we can help you grow in Asia-Pacific
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