Understanding the hidden costs in multi-country payroll
Multi-country payroll operations in the Middle East and Africa (MEA) region 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 these markets.
What are hidden costs and what factors contribute?
There are three critical 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 multiple 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 administrative overhead, which compounds these costs as it becomes increasingly necessary to maintain multiple systems in order to coordinate across various jurisdictions.
2. Compliance considerations
Adhering to regulatory compliance requirements across multiple MEA jurisdictions 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 & Payroll technology in MEA requires adapting to different infrastructure and regulations across the region. Companies need to consider how to achieve a balance between consistency with global standards and the local market needs. This will often require specialised or tailored solutions, and the right expertise to be able to 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. According the Global Payroll Association:, 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 as new technologies emerge and the regulatory environment changes. 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, but also to help maintain 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 in order to ensure employees are paid on time, every time compliantly. Our comprehensive services are designed to support businesses at every stage of their payroll journey.
Let’s start a conversation
Get in touch with our team if you would like to discuss your HRIS needs and how Trans Skills can help you.
