Edu BlogJanuary 27, 2023

Global localisation and Payroll

What is global localisation, and what does it have to do with HR and payroll?

First coined in the Harvard Business Review in 1980 by sociologist Roland Robertson, the term global localisation is rapidly gaining traction in the 21st century business landscape, and especially in the human resources and payroll space. The practice of global localisation has led to the creation of the term ‘glocalisation’ – a combination of the two words.

Global localisation, or glocalisation, can be defined as the global distribution of a product and/or service which has been adapted to suit the specific requirements of the various local markets in which it is offered.

But what does this have to do with HR and payroll?

When it comes to human resources and payroll software, this means tailoring the solution to align with each country’s labour and compliance legislation and regulations.

Nowadays, having a global workforce is about more than just its geographical location. It’s also about storing employee records in every country in which the company operates, and ensuring that the company complies with employment legislation, wherever in the world their employees work.

Expanding your company’s presence to different countries also means having to consider different languages, currencies, time zones and cultures, all of which impact the organisation’s global human resources and payroll in one way or another, and can become a minefield to navigate if not managed correctly.

Human resource and payroll systems are therefore integral in the support of global localisation best practices, and a glocalised solution is significantly beneficial to the end user.

What to look for in a glocalised HR and payroll solution

For a human resources and payroll solution to truly claim global localisation capabilities that enable companies to successfully manage their international workforces, several must-have features are called for.

Local legislative compliance

Human resources legislation sets out the rights and responsibilities of employers and employees, and is geared to protecting both parties from poor business practices and unnecessary legal action. But what’s considered standard labour practice in one country is not necessarily the same in another.

For example, what one country regards as employees, another considers independent contractors. And while some countries regard a work-from-home allowance as taxable income, others don’t. Employment matters such as minimum wage and maximum weekly working hours also vary by country, and sometimes by employee, depending on the employee’s qualifications and the job they are hired to do.

A glocalised human resources and payroll system must therefore be capable of collecting the relevant data, making correct calculations and submitting it to the relevant government authorities in the required format for each country.

Support for multiple languages

Payroll processing is a highly complex process, and even more so if that payroll is for a global workforce. It requires the payroll team to deal with people working in a variety of countries, all of whom may not share a common language.

Consequently, the human resources and payroll solution must be available in the language of their choice to mitigate risks around misinterpretations and ensure effective communication on matters such as leave, employee benefits and other payroll-related functions.

Besides supporting numerous languages, a glocalised human resources and payroll system should also support numerous variations of those languages. For example, English spelling in the United Kingdom is vastly different to that of the United States. Language support should therefore be pervasive through the system and apply not only to content but also to processes and help text.

Localised data fields and formats

Every company, regardless of the product or service it provides or where in the world it operates, has to capture the same employee-related data points.

All companies hire new employees. All employees have an address, a date of birth and some sort of unique identification number. But the format of this universal information varies from country to country. In South Africa, for example, the postal code field for addresses only needs to allow for four numeric characters. But if your organisation also has a presence in Canada, the postal code field must allow for up to six alphanumeric characters.

A globally localised human resources and payroll system must support the correct country-specific data field formats for universally required information such as names, addresses, birthdays and bank accounts. Additionally, it must incorporate requisite validation algorithms to ensure the accuracy of the employee data.

Conclusion

Whether your company is considering international expansion or already has a global footprint, a true globally localised human resources and payroll solution is not a nice-to-have but an absolute necessity.

The CRS Technologies suite of end-to-end modular software encompasses all aspects of the human resource and payroll functions. Leveraging the best benefits cloud computing has to offer, whether SaaS, hybrid or on-premise, the system is fully legislatively compliant and incorporates robust security features. Click here to request a free demo of the Engage™ integrated human resources and payroll suite.

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