In today’s digital economy, distributed teams are common. Many organizations, including the majority of companies doing business online, have anywhere from a few to a few hundred employees who rarely, if ever, come into the office. This brings countless advantages for the employer as well as the employee, but one of the new challenges it introduces to businesses is how to manage payroll. We have some experience in this area, and we’d like to pass on our expertise!
Working remotely is not a new concept, but the idea of working remotely was often thought of as a carrot to be dangled in front of workers – a “perk” that few could hope to gain and that, frankly, didn’t make much sense for the employer. Or so it was believed until remote labor pioneers such as Dell and IBM experimented with distributed workforces and discovered that not only did expenses go down, but productively actually went up! Organizations saved the overhead costs of office space, computers, building maintenance, phone and travel allowances, while employees became happier, more flexible, and, surprisingly, more productive.
Naturally, as remote labor became more common, businesses realized that they no longer had to hire the most qualified person within commuting distance of their office, they could now hire the most qualified person, period. Today, some companies don’t have an office at all, operating instead as a fully distributed team. These companies use a slew of specialized apps and cloud technologies to collaborate from all corners of the world.
How do you manage payroll for a distributed team?
Though managing remote employees in other countries is entirely doable, it does require a different set of tools and practices. Communication and access to the cloud is not limited by location, but the ability to pay employees, contractors and affiliates may be.
Businesses now need to consider several new issues including:
- International legal and compliance issues
- Security and reliability of regular payouts
- Risk of currency fluctuation (and whether the company or the employee absorbs that risk)
- Payroll account management and reporting
For startups and small organizations, these concerns can add a great deal of expense and man hours to a business that already operates on small margins and with small teams.
Because of these factors, most companies with a distributed workforce opt to outsource their international payroll. There are two main ways to do this: using payroll cards, or consolidating payouts using a global payouts platform.
An alternative to direct deposit or paper checks, a payroll card is a reloadable prepaid card onto which an employer loads a worker’s earnings at the end of each pay cycle. Typically issued by major credit card providers or payment processors, workers can use them anywhere credit cards are accepted, including ATMs and cash-back transactions.
The advantage of payroll cards is that employers can deposit money directly onto the card without having to pay the high bank fees for international money transfers, and workers aren’t required to have a bank account. The downside is that payroll cards do still come with fees, similar to those charged on traditional debit cards, which vary depending on the issuer. It’s import to inform workers of these fees before they agree to this payroll method.
The most convenient option for businesses with distributed workforces is to consolidate all of their payroll needs into one place. This is made possible using a global payment platform. International payroll services allow businesses to eliminate the labor required to execute and manage multi-currency payouts. These platforms also remove the need for businesses to have full banking services in every country where they are employing workers.
Payment platforms consolidate payroll into one place. This allows a business to keep their total salary expenses organized and ensures secure and reliable delivery of payments to employees, contactors, and affiliates, regardless of location. Payroll specialists utilizing cutting-edge payment technologies can provide these services more efficiently and affordably than traditional banks and can reduce or eliminate the costs of accounting, legal, HR, and compliance associated with international payouts.
Consolidating payments with a global platform also benefits workers. International payroll providers can deliver payments in a more timely manner and can pay workers in local currencies, saving them the currency conversion fees. This also allows the company to pay a fixed salary in the local currency, which safeguards workers against currency fluctuations.
By using Payza’s global payment platform to consolidate payouts to your employees, contractors, and affiliates around the world, you can rest easy knowing you’re in the hands of the most secure, reliable and affordable payout provider you can find. Payza’s highly secure payment processor is easy to integrate into your website and supports a wide range of payment options, such as credit card, Bitcoin, and e-money transfers. Payza’s Mass Pay feature lets you easily send payouts to all your recipients in one action, saving you time and trouble.
A Payza Business account makes it easy to complete your payouts with just one click. Send money to employees, freelancers, contractors, affiliates and suppliers and keep track of your payments with Payza’s detailed Transaction History. Just upload your payroll spreadsheet and send money to anywhere from a few people to a few hundred, instantly!