Multi-country payroll operations in the Middle East and Africa (MEA) present complex challenges that often lead to unexpected costs. Understanding these hidden costs is crucial for organisations who might be looking to expand their operations within the region.
What are hidden costs and what factors contribute?
There are three key areas that organisations must consider when evaluating hidden costs in their multi-country payroll operations:
1. Cost of cross-border transactions
The complexity of cross-border transactions introduces additional operational costs, as these transactions can be large in number, and need to be accurately processed and delivered based on different deadlines across countries.
In addition, according to the Bank for International Settlements, international banking fees and currency conversion charges in the MEA region can account for up to 5.5% of total payroll costs. Many organisations initially overlook the administrative overhead, which compounds these costs as there’s often a need to maintain multiple systems in order to coordinate payroll across multiple jurisdictions.
2. Compliance considerations
Adhering to compliance requirements across the region can mean a substantial investment in both systems and expertise. For example, organisations need to:
- Regularly update processes to align with changing regulations
- Maintain comprehensive documentation
- Implement risk management protocols
- Establish audit provisions and emergency response systems
3. New technology implementation & integration
Successfully implementing new HR and payroll technology requires adapting to different infrastructure and regulations in individual countries across the region.
Companies need to consider how to achieve a balance between consistency with global standards, and local market needs. This will often require specialised or tailored solutions, and the right expertise that can integrate these solutions with the organisation’s proprietary systems.
How to manage hidden costs
Different organisations use their own unique approaches to manage the hidden costs of their payroll operations. Based on research from the Global Payroll Alliance (GPA), the following are four of the recommended strategies that should be explored to effectively manage costs:
- Consolidating payment processing systems
- Building strategic banking partnerships
- Implementing automated reconciliation processes
- Developing integrated compliance monitoring systems
What does the future hold for MEA payroll operations?
The MEA payroll landscape continues to evolve with new emerging technologies and an ever-changing regulatory environment. Digital payment systems, improved banking infrastructure and payroll payment partners present new opportunities for cost reduction and operational efficiency. Staying informed about the best practices and technologies for multi-country payroll is essential for running payroll operations smoothly, and maintaining a competitive advantage.
How Trans Skills supports businesses with multi-country payroll
Trans Skills specialises in helping companies navigate the complexities of multi-country payroll in the Middle East & North Africa. Our services are designed to support businesses at every stage of their payroll journey, ensuring that employees are paid compliantly and on time, every time.
