Between 2019 and 2023, the use of payrolling exploded, increasing to 71% from 54% of organizations surveyed by SIA. With Covid-19 forcing much of the global workforce into remote work, organizations had no choice and little preparation for the shift.

Through the chaos came an unexpected benefit — organizations now had the opportunity to find highly skilled talent across the globe. Consequently, an opportunity to expand your labor pool in a way that wasn’t previously possible emerged, from local and often homogenous to global and diverse. Engaging contract workers in remote locations enabled companies to fill more roles quickly, bringing in top talent including those requiring specialized skills from anywhere in the world.

This led to a different need: a way for companies to ensure they could pay workers in this new model quickly and accurately, even as their payrolling teams shrunk due to illness and attrition. They also had to find ways to collect timesheets and other payroll information from workers no longer physically located in an office.

However, as firms expanded their geographic reach, new headaches emerged. Regulations and laws — which can vary greatly by country and locality — must be complied with in order to avoid penalties and to retain workers, and some changes came swiftly.

Payrolling services provided a solution to this problem and became widely embraced. Organizations can now use a third party to manage payroll in any country to give them access to top talent. Through expertise and often physical presence in local markets, they use geographic-specific expertise to assume the administrative burden of paying contract workers, ensuring compliance with local laws and regulations.

The landscape of payrolling suppliers has expanded rapidly, with each offering its own unique suite of services designed to address these problems. Common to all, however, is the goal of reducing risk.

Reducing Risk and Expanding Reach

A payrolling provider reduces risk because it assumes responsibility for the majority of a company’s contingent worker management.

“Companies benefit from reduced risk through improved compliance and bring immediate cost savings,” says Anju Abel, CEO of LanceSoft, a global payroll solutions and services provider. “Payrolling firms become the EOR or AOR, depending on a company’s needs. And they can provide robust legal compliance, support with IRS and other agency audits, tax issues, country laws, benefits and, in some cases like high-risk labor categories, accept the risk on your company’s behalf.”

In addition to simplifying the process, payrolling increases efficiency through technology that automates processes, adapts to changes in real time and enables programs to scale, even those with small numbers of workers in any given geography.

“Taking advantage of third-party global contractor payrolling is a major benefit for organizations because it streamlines processes, effectively giving them one invoice to process and ensuring compliance,” Abel says.

For example, LanceSoft’s clients can hire workers — even a single contractor — in 27 countries. LanceSoft’s cross-border payrolling enables companies to pay their workers in the currency of their home countries while paying the payrolling provider in US dollars. Alternatively, clients can run payroll from a global location, like the European Union, and pay workers in multiple currencies. Contracts can be consolidated, and exchange rates are agreed upon for an entire contract period.

Another benefit of payrolling is the opportunity to meet your organization’s diversity spend goals. Working through a certified minority business enterprise (MBE) such as LanceSoft enables companies to immediately claim diversity spend, an increasingly critical area for many organizations. Payrolling is an efficient means to claim large diversity spend by simply using a certified MBE as the payroll service provider. Additionally, when working with a NMSDC-certified provider like LanceSoft, companies receive diversity spend benefits from the US government.

Payrolling can also improve brand image through better worker experience and reliable paychecks, often critical factors in contingent worker surveys. In a tight labor market, anything that enhances an employer’s brand has the potential to create a competitive advantage.

Empowering Workers

While each payrolling firm offers a unique range of services, some, such as LanceSoft, have invested in tools and technology empowered by AI that provide direct lines of communication for workers through emails, live chats, self-serve portals and customer service centers to ensure easier hiring and onboarding processes. Additionally, LanceSoft extends these by providing ongoing, direct support to workers through its Human Asset Management Group (HAMG).

For example, workers can turn to the payrolling support team for basic matters like timesheets, requisitioning and repairing computers and equipment, software access, documentation and certification, and paycheck questions.

Further, highly skilled workers who do not carry required business insurance policies can receive coverage through a payroll service provider.

Some payrolling firms also offer support for workers when an assignment turns out to be a poor fit. The firms often maintain various talent pools, which can help the worker find a more appropriate role while providing its client with secure workers to fill that role.

Maintaining Compliance in a Global Market 

Companies seeking a payrolling partner need to pay special attention to how providers stay current with all of the regulations in every country where they provide support.

Many payrolling firms partner with local attorneys, accountants and HR organizations to support their efforts; some establish their own offices in each location staffed with the necessary personnel.

“It isn’t easy,” Abel says, “but it is essential, so we have a legal and compliance team in each of the 27 countries we support to manage compliance rules and regulations. Each country has HR, accounting and an HAMG group set up to ensure that payroll is run in compliance with their specific laws. We have invested so our clients feel secure that they are not at risk. In each country, we have multilingual staff, so our clients and consultants can interact in their native languages, which removes a barrier for them.”

The Growing Impact of Technology on Payrolling 

The impact of digital transformation has made itself felt in payrolling, effectively reinventing through automation and integrated AI what once was a highly manual process. This technology analyzes all manner of data, provides self-service features that empower workers, integrates with existing platforms, offers customizable tools and much more.

“The world of payrolling technology continues to evolve,” Abel says, “with providers offering fully automated systems, configurable workflows and natural language processing. Since the technology reaches across departments and teams, it has to integrate with existing VMS and HR technologies.”

Selecting the Right Payrolling Provider 

Companies of any size can benefit from partnering with a payrolling provider but need to ask the right questions across key dimensions on topics such as:

  • Spend
  • White-glove service
  • Cost savings
  • Compliance
  • Diversity
  • Technology
  • True partnership

Perhaps the most important attribute of a payroll provider is partnership. “Every company looking for a payrolling provider deserves to work with someone who’s willing to invest in them. They should feel that a burden has been lifted and see results,” said Abel. “We value our relationships — we work with our clients to meet their immediate needs and set them up for future success.”

To learn how your organization can benefit from LanceSoft’s payrolling services, contact Anju Abel at today.