By Jared M. Mondschein
Organizations need to invest the necessary resources to be prepared to process payroll globally, a payroll executive said Sept. 24.
Brent Gow, global payroll director for Starbucks Coffee Co., detailed some of the lessons he has learned after many years of conducting global payroll operations for thousands of employees around the world.
Proper preparation, including developing a detailed strategy, engaging in cultural training and identifying governance, is essential in conducting global payroll, said Gow, who spoke at the American Payroll Association's Fall Forum in Orlando, Fla. Although payroll professionals generally may find it difficult to begin international operations, the process becomes more challenging if not done correctly from the start, he said.
Gow, who serves as chairman of the Bloomberg BNA Payroll Library Advisory Board, said that adequate preparation before entering the market in Brazil, for example, would allow a payroll professional to understand that the country's tax system is exceedingly complex and would be best handled in a local manner instead of through a regional payroll model.
Even in developed nations such as the U.K., some may assume that it would be easy to implement a U.S.-style payroll system because of similarities in culture, language and business. However, the U.K. has its own government regulations and payroll processes that may not be ignored, Gow said. Many organizations learn this lesson after mistakes and penalties, he said.
Becoming partners with a large and experienced payroll company or a consulting company may help give a global payroll department the tools to eventually take on payroll functions in certain countries themselves, Gow said.
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