The globalisation of UK businesses, and the requirements this brings is highlighting limitations within the international payroll market. A recent survey conducted by Payroll World, in association with Equiniti International Payments, reveals 57% of payroll managers experience at least one returned or failed payment each month.
With 22 per cent of UK businesses having more than 1,000 oversees employees to pay each month, it is more important than ever that employers can rely on their international payments provider.
The survey of 353 payroll and HR professionals found expansion of companies into different markets is adding to the complexity of the payroll process. The survey reveals UK companies actively manage payments in up to nine countries on average, with Europe and Asia identified as the largest markets, but with a significant proportion of payments going to developing markets like Africa (33%).
Andy Brown, Managing Director, Equiniti International Payments says: “Companies expanding into new markets can cause a logistical headache for payroll departments. Many organisations find these payments complex and costly to manage and prone to errors and delays – but paying employees the correct amount, on the right day and to the right destination is hugely important for ensuring employee satisfaction and confidence in the organisation”.
The areas in which global companies based in the UK see the most frequent day-to-day issues are within local payment requirements (56 per cent), intermediary bank charges (30.5 per cent), late arrival of payments (26 per cent), and with the confirmation of credit (17 per cent).
Many of these issues are linked to a proliferation and use of outdated wire technologies and low take up of the Automated Clearing House (ACH) payment network. The findings show 81 per cent of payroll managers use wire technology to facilitate international payroll payments, while only 35 per cent use ACH payments.
Andy Brown adds: “While wire payments fulfil an essential need and may be the only option for some currencies, they can be expensive and lengthy. ACH payments on the other hand remove the involvement of intermediary banks, which in turn removes additional and sometimes unknown charges from the payment process. Where possible, organisations should look for a service provider which can access the ACH networks in their selected destination countries.”
On average, UK based global businesses are only “mildly happy” with both the service and assistance they receive from their payments providers. Additionally, those businesses feel they are only kept “averagely well informed” about local payment requirements by their providers.