The challenges of multi-country payroll in Eastern Europe

Managing payroll across multiple countries in Eastern Europe presents a number of challenges, some common to any multi-country payroll project, others unique to the geographical environment. Using a proprietary research model that enables us to drill down into the individual challenges and concerns of participants, Webster Buchanan Research interviewed 11 senior managers with regional or global responsibility for payroll in Eastern Europe and discussed the issues they face and the way they have set out to tackle them. The participants work for multinationals of various sizes, from mid-sized to Fortune 500, and were drawn from a range of industry sectors.

The research uncovered a number of challenges for companies looking to implement a standard, centralized multi-country payroll model in the region, with issues ranging from language and culture to compliance, making payments and managing vendors and systems. We grouped these challenges according to different stages of the payroll cycle and found common concerns around:

  • HR administration Employee administration teams are often required to carry out additional HR admin tasks such as contract and vacation management that do not typically fall under payroll’s remit
  • HR records management Bureaucratic requirements (e.g. for paper records keeping) are onerous in some countries
  • HR/payroll interface Additional complications with HR admin can cause problems for payroll, not least in keeping to the payroll calendar
  • Disbursements Companies need to cater for restrictions around payments
  • Reporting (pay slips) Pay slips and reports can be excessively manual
  • Employee service It can be difficult to provide local language support for complex payroll queries

In response to these challenges, multi-country teams adopt a mix of approaches, including:

  • Maintaining in-country teams (which raises questions as to whether multinationals are enjoying the full benefits of centralized multi-country payroll)
  • Implementing regional hubs, creating a controls environment to oversee local activity
  • Outsourcing payroll activity through a variety of service delivery models

Each of these approaches brings its own benefits and challenges, which are discussed in more detail in this report. You can read the full report by clicking here or following the relevant link on the left (GPRN membership required).

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