From good to great: What to look for in a global payroll provider

In this article, we chat with Vistra experts Allan Harness, Global Employment Solutions Director, and Saul Howerton, Head of Global People Advisory. Hot on the heels of significant recognition in the payroll industry, they share their insights on key considerations and emerging trends in global payroll, drawing from their extensive expertise of serving clients across multiple industries and jurisdictions.

Distinctive approaches among global payroll providers

Question: What are some key differences in how global payroll providers operate?

Allan: Global payroll isn’t a one-size-fits-all solution. At Vistra, we can adapt our approach to fit each client’s unique needs, taking into account factors like regional headcount and operational complexity.

Adapting by leveraging local payroll teams, our proprietary technology and wider inhouse capability. This allows us to provide tailored end-to-end solutions, ensuring comprehensive support from payroll processing to HR consulting and tax advice.

Core factors to consider

Question: What essential aspects should companies evaluate when choosing a global payroll provider?

Allan: Companies should consider several key factors. First and foremost is compliance expertise – staying updated on local labour laws is essential to avoid penalties. Even small missteps in areas like tax remittance or benefits compliance can pose significant risks, which is why timely communication about these changes is crucial.

Saul: And let’s not forget about technological integration. Effective payroll systems need to seamlessly connect with HR and finance platforms to boost efficiency. The right technology really keeps everything running smoothly, from payroll processing to compliance monitoring.

Allan: Client support plays a vital role. Organisations want responsive, high-quality support to help navigate complex regulatory landscapes. Plus, providers must demonstrate flexibility and adaptability to meet changing operational demands.

Allan: Lastly, it’s worth remembering that choosing a payroll provider is a long-term decision. The global payroll landscape is always evolving, with new players entering and others exiting. So, as you evaluate your options, ask yourself: will this provider be around in five years? A partner with a long-term commitment gives you added assurance of consistent support and minimises potential disruptions in your payroll operations.

Evolving metrics of success and addressing key challenges in global payroll

Question: How has success in global payroll evolved, and what are the key challenges providers face?

Saul: Today, success in global payroll isn’t just about offering services in multiple countries. Companies expect their payroll providers to deliver integrated data insights, ensure real-time compliance and seamlessly connect with broader business systems.

Allan: Absolutely. The bar has definitely risen, and it’s now about empowering clients with actionable insights. At Vistra, our investment in analytics tools and advanced middleware help clients make strategic decisions while keeping pace with evolving regulations.

But global payroll is far from simple. The continuous evolution of tax and labour laws across different regions adds layers of complexity. Effective providers need a mix of deep local knowledge combined with responsive systems to stay on top of these regulatory changes.

We turn these challenges into opportunities, through ongoing client feedback, regular compliance updates and proactive support. Our approach allows us to quickly adjust to regulatory shifts, ensuring our clients remain compliant and well-supported.

The strategic role of technology and integration in global payroll

Question: How has technology transformed payroll and what should companies consider regarding migration and system integration?

Allan: Technology has really changed the game for us all. Payroll has evolved from a basic processing function into a fully integrated, strategic solution. Modern payroll systems prioritise seamless integration with Human Capital Management (HCM) platforms, real-time compliance monitoring and robust data analytics, allowing companies to make confident, data-driven decisions. At Vistra, our investment in middleware boosts automation, ensures compliance and provides actionable insights across different regions.

So, if you're thinking about switching providers, migration and integration are key considerations. Here are some important questions to keep in mind:

• How is data accuracy ensured during migration?
• What is the transition timeline, and how will disruptions be minimised?
• How will the new system integrate with existing HR and finance platforms?

Here at Vistra, we focus on rigorous data validation and tailor our integration planning to each client. Our aim is to provide a thorough approach that minimises disruptions, maintains data integrity, and ensures a smooth transition to an optimised, tech-driven payroll solution.

Understanding local payroll vs. employer of record models

Question: When expanding internationally, establishing a local payroll is often a necessity, but there are other options like using an Employer of Record (EOR) or Non-resident Employer (NRE) model. What should business leaders know about these choices?

Saul: When hiring staff in a new country, it’s crucial to ensure employees are compensated accurately and on-time while meeting local employer obligations like tax contributions and withholdings. You have a few options for managing this:

• Employer of Record (EOR): In many countries, an EOR provider can manage indirect employment and payroll through its own legal entity, handling all compliance and payroll functions
• Non-Resident Employer (NRE): Where EOR isn’t allowed or direct employment is desired, the NRE model lets companies manage payroll without setting up a local entity
• Direct Payroll Setup: This traditional approach involves establishing your own legal entity to employ and run payroll locally

Each model has its own obligations based on local regulations and your business activities. Choosing the right one can be complex, but compliance is key—any failures can lead to significant financial penalties.

Expansion implications beyond payroll

Question: When clients need to set up a local payroll in a new country, what expansion implications do business leaders often overlook?

Saul: Before expanding, it’s important to discuss both short- and long-term plans, including hiring needs and operational goals for the next six, 12, and 18 months. This ensures that your payroll structure is compliant and aligns with your strategic objectives.

One common oversight is the tendency to hire independent contractors at first. However, misclassifying these workers can lead to significant penalties. It’s crucial to understand local regulations that could classify them as employees.

Additionally, companies should consider local compensation norms, including benefits and stock options, as these are key for attracting and retaining talent. If considering expatriate employees, there are additional costs and tax obligations to manage, which may include setting up a shadow payroll. While these aspects can be complex, navigating them is essential for successful international operations.

Integrating payroll with other HR functions

Question: How do payroll and other HR areas, such as compensation planning, benefits, and talent acquisition, overlap? Should these areas be managed together or separately?

Saul: Payroll and HR functions are closely linked, but whether to manage them together or separately often depends on the size and structure of the organisation. Payroll is primarily operational, focusing on accurate salary calculations, withholdings, and compliance. Getting payroll right is crucial for both employee satisfaction and regulatory adherence.

On the HR side, companies need a strategic approach to design competitive compensation packages, implement performance management and comply with employment laws. While many multinationals keep HR and payroll teams separate, it's vital that they collaborate. This ensures that nothing is overlooked, especially shared responsibilities like reporting taxable benefits or tracking holidays and work time.

Bringing HR and payroll teams and systems together helps align compensation with organisational goals, reduces compliance risks and creates a smoother experience for employees that ultimately minimises potential liabilities.

Industry recognition and its importance

Question: Recent rankings from Everest Group and NelsonHall recognised Vistra as a “Star Performer” and “Leader.” What do these rankings assess and how should organisations interpret them?

Saul: These rankings look at factors like scalability, compliance, client satisfaction and technology capabilities. They serve as third-party validation of a provider's strengths, making it easier for organisations to choose reliable partners.

Allan: This recognition highlights our commitment to innovation in global payroll and high service standards. For our clients, it confirms that our investments in technology, like our Overseas Connect platform and API integration, deliver consistent, top-quality service, no matter where they are.

Conclusion

Choosing a global payroll provider is more than just comparing costs and features; it’s about finding a strategic partner that aligns with your operational and compliance needs while supporting broader HR goals. At Vistra, we combine deep expertise, innovative technology, and a flexible, client-focused approach to empower multinational businesses to achieve seamless and compliant payroll delivery worldwide. For companies expanding globally, selecting the right payroll provider is key to operational success.